China embraces era of employee-free retail shopping

Source: www.ft.com

Like other convenience stores across China, the shelves of a BingoBox outlet in Shanghai are lined with instant noodles, beer, and bags of traditional snacks such as duck neck. But one thing is missing — the staff. Chinese retailers have taken pole position in a race to build unmanned shops, with more than a dozen in operation and hundreds more planned. Meanwhile, the unstaffed Amazon Go store has yet to open to the public. The entrance to the BingoBox in Shanghai, a single-aisle affair dropped Tardis-like into a parking lot behind a supermarket, is unlocked by the use of mobile phone app. Customers scan items for payment, with theft prevented by the use of real-name registration and video monitoring. Just as China’s rising labour costs — now higher than Latin America — pushed manufacturers to add robots to their production lines, retail in China is becoming more automated. “People are a big cost,” said BingoBox’s founder Chen Zilin. His company operates about a dozen stores, and plans almost 200 more by the end of next month, mostly in upscale residential districts, away from “hooligans and homeless people,” he said. Costing Rmb100,000 ($14,800) to set up, with monthly operating costs of Rmb2,500, the stores allow for wider margins than other stores. Labour costs make up about 10 per cent of monthly outlays for a Chinese supermarket, according to analysts. BingoBox benefited from an unprecedented wave of venture capital investment in China, receiving funds from GGV Capital and Qiming Venture partners. Rival staff-less shopping chain F5 Future Store, which has opened six outlets, received backing from Sinovation Ventures, the fund run by former Google China boss Kai-Fu Lee.