The unmanned shelf sector has seen a flurry of major moves recently: Xingbianli acquired 51 Snacks, Guoxiaomei merged with Fanqie Convenience, and Fugui announced business integration with Kaola Convenience... From the 'hundred-shelf war' to mergers and restructuring, unmanned snack shelves have gone from hot commodity to commonplace in just one year. After a year of fermentation, the once-questioned low-barrier positioning game has temporarily concluded, and new entrants can no longer rise through this basic play. At the same time, high loss rates and profitability challenges have been brought to the forefront, with 'more shelves, more losses' becoming a common phenomenon. As early as March last year, when Zinc Finance interviewed Lingwa, they predicted, 'By the end of the year or early next year, only a few regional players will remain.' Guoxiao 7 CEO Wan Xiaoli also felt that the wave of closures in the unmanned shelf industry is underway. Behind the prosperity, the industry's reshuffle has already begun. The Paradox of Scale and Profitability According to incomplete statistics, total financing in the unmanned retail shelf sector has exceeded 2 billion yuan. Well-funded players have pushed shelves and temperature-controlled cabinets loaded with snacks and drinks through the doors of countless companies. 'Here, these are coupons for you, everyone gets one.' On the second day after a certain brand's shelves entered Zinc Finance, the operations guy arrived with a stack of coupons offering 6 yuan off for purchases over 5 yuan. In addition to restocking twice a week, the operations guy would occasionally bring coupons, drinks, and other perks. Near Christmas, they even brought a two-to-three-meter-tall Christmas tree. These tactics are now standard practice in the unmanned shelf sector. At this stage, most shelf companies believe the focus should be on grabbing more points, and it's normal to subsidize. 'In short, it's burning money to cultivate user habits. ' An investor said, 'Everyone is thinking about recouping the money later through monopolizing points and precision marketing.' Under capital disruption, the risk control red line for loss has been forced lower. 'I can tell you this: our main competitors' loss rate is no lower than 20%, while ours is 10%.' Lingwa investor Lao Jiang once told Zinc Finance's Pan Yuefei. And this number was only 5% before the big financing wave. 'We insist that if the loss rate exceeds 10%, we must remove the shelves. Also, points with daily transaction value below 80 yuan are considered unsustainable.' Guoxiao 7, which also operates unmanned shelves, placed its first shelf in 2015 and has strict risk control. Their points are mostly in buildings rather than offices, not only because they cover a larger user group, but more importantly, cooperating with property management helps control losses. 'We have a profit-sharing model with the property, so we can impose certain risk control requirements on them.' Currently, Guoxiao 7 has deployed over 3,000 points, but only about 2,000 are in operation, 'mainly due to loss issues.' The scale of over 2,000 shelves is medium in the industry, and without capital backing or scale explosion, it's impossible to compete with giants. 'There's a strange phenomenon in this industry: the smaller the company, the longer it may survive. If you rapidly expand to 10,000 points, there are many uncontrollable factors,' Wan Xiaoli added. But the industry's dilemma is that loss-making points continue to lose money, while profitable points have limited revenue. These deployed points are more like bottomless pits, with high subsidies and continuous losses making profitability a pipe dream. On the Eve of Collapse, Transformation is Imperative 'Don't rush, let me show you this.' To persuade Zinc Finance colleagues to switch from Company A's shelves to Company B's, the operations guy, after offering coupons and small gifts, mysteriously handed over his phone. The screenshot was filled with chat records like 'Company A has collapsed, third-tier cities have withdrawn stations,' 'All shelves in companies with fewer than 50 people removed,' 'Heard they didn't raise money, capital chain broke.' The cash-burning point expansion strategy heavily relies on capital, and once unmanned shelves, which have yet to see profits due to high losses, lose capital support, collapse is imminent. Wan Xiaoli also said, 'For the so-called big players, unmanned shelves are just a supplement to offline traffic.' Other small players must transform to survive. Guoxiao 7 is a typical transformation case; they now prefer to define themselves as a technology company. Applying RFID to unmanned retail has precedents: Bingo Box, Easy Go, and Guoxiao 7's '7.7 Future Convenience Store' all use this technology. Although RFID technology has matured, costs remain high. An industry insider told Zinc Finance, 'Ordinary small RFID tags with adhesive backing cost about 0.5 yuan each, while anti-metal ones are much more expensive, possibly 5 yuan each.' The high consumable cost greatly limits the commercial deployment of unmanned convenience stores, and Guoxiao 7's visual code technology is a low-cost alternative, achieving about 5 cents per code. 'In short, we could have opened this convenience store a year ago, but we only did it now because we changed the consumable cost. Only then can it truly be deployed,' Wan Xiaoli added. Visual code targets unmanned convenience store scenarios, while another product, the smart cabinet, addresses office scenarios. Wan Xiaoli told Zinc Finance that this smart cabinet mainly uses gravity sensing and monitoring technology, achieving about 90% loss prevention. 'We are now applying for the first smart cabinet in the country that doesn't need electricity or internet, with batteries lasting a year. Traditional smart cabinets need battery changes at least once a month.' Besides Guoxiao 7, many other companies are also researching smart cabinet technology. However, regarding using smart cabinets to reduce loss rates, Gao Guanmin, who produces smart cabinets, believes the current technology hasn't reached an ideal state: 'The current equipment mainly uses gravity sensing, RFID, and other technologies for automatic detection during settlement. In practice, there are various situations like failure to recognize items or damaged surveillance cameras.' Guoxiao 7's technological transformation is just one event in the unmanned retail sector, but the underlying logic is that everyone is moving toward deeper development. On the eve of the traditional unmanned shelf model's collapse, they are making their operations heavier and deeper to build their own moats. Technology Upgrade or Model Transformation 'We had an awakening at the end of 2016,' Wan Xiaoli paused, 'Unmanned shelves should be Meituan and Ele.me's game; if we continued, we'd just be pawns.' In addition to increasing technology investment and actively developing new equipment and products, Guoxiao 7 also took a crucial step: partnering with Alipay. Guoxiao 7 and Ant Financial jointly created the '7.7 Future Convenience Store.' Wan Xiaoli told Zinc Finance that by using self-developed visual codes to replace RFID, they reduced consumable costs, making the commercial deployment of unmanned convenience stores truly possible. 'We have some core cutting-edge technologies that need mature commercial scenarios to land, and partners can quickly apply our capabilities to specific business scenarios,' Zhu Feng, head of intelligent retail at Ant Financial's industry technology department, told Zinc Finance. In implementation, Guoxiao 7 handles hardware and supply chain, while Ant Financial provides payment, real-name authentication, and Sesame Credit capabilities, jointly completing the retail loop. Guoxiao 7's future vision is to rely on its supply chain, smart equipment, and other supporting technologies to develop franchisees at a price of 68,000 yuan, transforming traditional community retail stores and mom-and-pop shops into unmanned operations. The unmanned shelf business, once jokingly called a 'box-moving' business, has entered deep waters, and the simple, crude cash-burning point expansion is no longer effective. Besides transforming into technology providers like Guoxiao 7 and building their own small ecosystems, other new plays have emerged. Just last month, 'the first office self-service fresh food store in the country'—Ant Fresh—also reached a cooperation with Alipay. Ant Fresh CEO Hu Zhong told Zinc Finance's Pan Yuefei that unlike the scale-effect model of snack shelves, the core competition for fresh food lies in the supply chain. Ant Fresh, which started with office group meals, has unique advantages in entering unmanned retail with fresh food categories like breakfast and lunch. 'Our food is developed based on our 2°C-8°C cold cabinet temperature and microwave heating. Take a meat bun, for example; its skin-to-filling ratio has been redesigned to suit the new office scenario.' Additionally, Ant Fresh cooperates with Youzan Mall to build its online store and drive traffic from offline cabinets. Hu Zhong introduced that the online store offers more categories, but all revolve around the theme of 'eating.' 'Because the online and offline products are strongly correlated, the traffic-driving logic can work.' In his envisioned typical scenario, office workers can scan codes at offline cabinets to buy boxed lunches for lunch, and if they have ample time for dinner, they can scan codes to enter the online mall to buy semi-finished clean vegetables and cook themselves. Of course, this also tests the operator's supply chain capabilities. Lingwa investor Lao Jiang holds a different view: 'Shelves cannot become traffic entrances; they are already the ultimate consumption scenario.' Whether it's Guoxiao 7 transforming into a technology provider or Ant Fresh entering the fray with fresh food, they are microcosms of the upgraded unmanned retail war. Facing the imminent collapse of unmanned shelves, whether through technology upgrades or model transformations, preparations for the second half of the war must be made in advance. Source: Zinc Finance (ID: xincaijing) -END-