Auchan to roll-out unmanned grocery chain stores in China

French retail giant Auchan said it will roll-out unmanned convenience stores across China this year, in partnership with state-owned home appliance company Hisense.

Europes eighth-largest retailer said it will open “several hundred” Auchan Minute stores and expects this number to rise quickly over the next few years.

“We are very ambitious,” said Ludovic Holinier, the executive chairman of Auchan Retail China. “With this world first, we are providing hyper-connected Chinese consumers with a solution that is in line with their buying patterns.”

The Auchan Minute unmanned convenience stores will measure around 18 square metres and carry about 500 products, including fresh products and non-food impulse goods (drinks, snacks and fruits). Hisense will be responsible for designing, developing and constructing these stores and will handle maintenance.

As with other unmanned stores, consumers will need to use the popular messaging app WeChat to enter a store by scanning a QR code at the entrance, which will be used to identify them. Once inside, all they have to do is to choose and scan the items they want, which will be automatically added to their virtual shopping basket. The payment will be made either through WeChat Pay or Alipay, two of the most popular payment methods in China, according to Auchan.

Analysts, meanwhile, were cautious in their assessment of this sector.

“Its still difficult to say if consumers really like these stores,” said Luo Xianfei, a retail analyst with Northeast Securities.

“But Alibaba and other e-commerce companies would be able to collect data on consumer behaviour through these unmanned stores, which could in turn be used to boost their online sales,” he said. “So they are obviously more motivated to be engaged with the business compared with traditional retailers such as Auchan.”

Others said Auchans is not a new concept and should not be difficult to achieve. “If you consider how small each of the stores are, they are not much bigger than a vending machine,” said Kitty Fok, the managing director at IDC China.

“Many Chinese people have been buying things through vending machines for years, so it shouldnt be that novel a concept for them.”

The French majors entry into this sector has coincided with other players too stepping up their operations. Guangdong-based start-up BingBox, which opened its first unmanned convenience store in Shanghai this summer, said in July it aimed to open another 5,000 such stores in the coming year through a franchise model.

In fact, Auchan collaborated with BingBox on a prototype in Shanghai this year up until the summer, when the pilot ended because of the companies “different strategic directions”, according to BingBox.

Other players include Chinese home furniture retailer Easyhome, which unveiled its “first unmanned convenience store” in Beijing in July, while Yonghui Superstores, the fifth-biggest mainland supermarket chain, also announced its entry into the sector this year.

The current players mainly fall into two categories – traditional retail giants such as Auchan, who have established inventory and delivery chains and a big customer base; and start-ups such as BingBox, which rely on their cutting-edge technology and seed funding.

The total investment in this sector amounted to more than 46 billion yuan (US$6.92 billion) this year, according to Chinese state media Xinhua.

2017-11-15 ||