HANGZHOU: The willingness of Chinese consumers to embrace new technology, especially mobile payment platforms and artificial intelligence, is driving a quiet revolution in China’s retail sector where fully automated shops are taking off.
China’s largest e-commerce players – Alibaba, JD.com and Tencent – are all actively involved in rolling out automated retail services while Koubei, an Alibaba subsidiary, is especially focused on providing innovative solutions for restaurants.
In a special report examining how these new technologies are transforming the experience for Chinese consumers on the ground, Nikkei Asian Review visited the Wufangzhai restaurant chain, which worked with Koubei to introduce new systems.
Rather than relying on staff to serve customers during the busy lunchtime rush, Wufangzhai now uses dozens of automatic lockers that dispense hot food roughly five minutes after customers pay via the Alipay app on their smartphones.
According to the Nikkei report, Wufangzhai’s new automated ordering system has helped to halve its annual labour costs, while the added efficiency has increased customer turnover leading to a boost in sales of 40%.
Elsewhere, there is a shop in Hangzhou that uses robots to serve bubble tea at a third of the price of its competitors, while a hotel in Chengdu uses cameras to check in guests rather than having the expense of a manned reception desk.
According to research firm AskCI Consulting, the market value of automated shops in China is expected to rise to 950bn yuan in 2022, or 30 times more than the estimate for this year.
Koubei, for its part, is already busy tapping into this expanding market and has plans to open ten staffless shops, restaurants and bakeries this month alone.
The ease and convenience of mobile payments is certainly a driver of this trend, but Nikkei also pointed out that many consumers in China – a country not famed for its customer service – feel staffless shops offer them better customer experience.
Demographics play a role too, according to a recent Forbes report, with China’s slow-growing population putting pressure on the labour market.
In addition, Chinese youths are sometimes described as the “job-hopping generation” as they seek to secure high status careers, meaning that many are reluctant to make a living as a “shop assistant”.
Sourced from Nikkei Asian Review, Forbes; additional content by WARC staff