Self-Service Convenience Store Overheats, Shuts Down
wechat_bg

2017-07-10 12:32:11

A week after earning over 100 million yuan ($14.7 million) from eager investors, BingoBox, one of China’s first responses to Amazon’s next generation of unmanned convenience stores, has witnessed one of its own being forced to suddenly shut down.

A sign posted to the door by Auchan, BingoBox’s French supplier, said that the store had been temporarily closed for “technical adjustments.”

Zhang Xu, a spokeswoman for BingoBox, told Sixth Tone that the store’s glassy exterior had affected the customer experience because of high temperatures last week. “We will improve our cooling system and scout more suitable locations. The closed store will reopen in the coming days,” she said, adding that the store’s other Shanghai location remained open.

Ever since the Guangdong-based pioneer of convenience opened its first test shop in Shanghai in June, the approximately 15-square-meter building has attracted numerous visits from investors seeking economic alliances and locals seeking a blend of convenience and innovation. However, when Sixth Tone’s reporter stood in front of the sealed shop on Monday, they observed that the refrigerator inside was nearly empty.

Cai Xingchai, 28, took her daughter on a 1.5-hour trip by subway just to experience the cutting-edge BingoBox location. She told Sixth Tone she was “so frustrated” when the door of the store wouldn’t open for her, and her 5-year-old daughter seemed equally vexed after the long trip, pressing her face to the glass and shouting, “Mom, I want to eat!”

According to a report on Chinese unmanned retail stores by market data platform iiMedia Research Group, 2017 sales will amount to 39 billion yuan by the end of this year.

“Currently, online retail has been putting the squeeze on offline businesses,” Guo Shimin, an e-commerce analyst at online consultancy iResearch, told Sixth Tone. “However, businesses like convenience stores are harder for the online giants to touch — the demand in this sector is irreplaceable.”

As investors seek partnerships with the unmanned convenience stores that have been springing up recently, BingoBox will not be able to rely on the advantages conferred by being the market’s largest player for much longer. Sinovation Ventures, a venture capital fund headed by former Google executive Kai-Fu Lee, injected 30 million yuan into F5 Future Store, one of BingoBox’s main competitors, in June.

Meanwhile, Swedish startup Wheelys began promoting Moby, an unmanned mobile convenience store that comes rolling when summoned, in China in March. And Chinese e-commence giant Alibaba launched its unmanned Tao Café, offering coffee and a limited stock of groceries, at the Taobao Maker Festival on Friday, beginning its own foray into the self-service industry.

“BingoBox’s current business model is primal, easy, and practical,” said Guo of iResearch. “However, it’s not comprehensive — improvements are needed to ensure a better customer experience. But as long as investors continue to see it as profitable, issues can be easily overcome.”

Correction: A previous version of this article said high temperatures had affected customer safety. They affected the customer experience.

Editor: David Paulk.

(Header image: Pedestrians walk past a BingoBox unmanned convenience store in Shanghai, June 10, 2017. Wu Yue/Sixth Tone)