On January 17, TalkingData's 2017 Unmanned Shelf Industry White Paper showed that, according to incomplete statistics, cumulative financing for dozens of unmanned shelf startups exceeded 3 billion yuan, and the market prospects are widely optimistic. Why is it so optimistic? The white paper provides data from several aspects. For example, in terms of corporate financing, many companies already have a very solid capital base. Miss Fresh leads the first tier with over 1 billion yuan in cumulative financing, while Xingsheng Bianli, Guoxiaomei, etc., are in the second tier with financing between 100 million and 1 billion yuan. Additionally, the unmanned shelf business is gradually maturing, with the "front warehouse" model favored; unmanned shelves are spreading across Beijing, Shanghai, Guangzhou, and Shenzhen, and continuously expanding to second- and third-tier cities. It can be seen that unmanned shelves, as a model of new retail reform, are developing into a relatively mature and commercially capable retail model through market feedback and self-improvement. However, fierce competition also exists. The white paper shows that based on the TGI index of mainstream unmanned shelf brands, the competition among Xingsheng Bianli, Miss Fresh Convenience Purchase, Guoxiaomei, Xiaoe Weidian, and Qizhi Kaola focuses on point quantity, average loss rate, weekly restocking frequency, and average daily revenue per shelf. This indicates that the game of unmanned shelves is no longer a single-point game but a comprehensive competition of overall strength. Under fierce competition, problems are naturally hard to avoid. For example, some players have recently been exposed to withdrawing from third- and fourth-tier cities and defaulting on supplier payments. Fortunately, these problems are not common; from the overall industry development trend and current situation, the unmanned shelf model is still worthy of recognition. The testing period for new models may be long, but the problems currently faced by some players are actually sequelae of blind competitive expansion in unmanned shelves. However, these sequelae are placed on some star individuals, making it seem like the entire industry has the same problems, but that's not the case. In other words, it's not too late to have problems at this stage. Many players are holding large financing while starting to improve their models, so the unmanned shelf industry we see is actually relatively healthy. By analogy, the current expansion period and some individual problems of unmanned shelves are almost identical to the development of group buying in those years. Group Buying and Unmanned Shelves: Different Players, Same Trajectory Some people always suffer from sequelae, but these sequelae are also an inseparable part of the laws of industry development. The various phenomena of unmanned shelves today are quite similar to the development of the group buying model back then. On one hand, players in the unmanned shelf field are currently splitting into differentiated operating models, such as simple unmanned shelves and intelligent unmanned shelves. Product selection is also taking a differentiated route, with some doing fresh food and others doing imported snacks. The group buying model began to rise in China in 2010, and the first domestic group buying website, Manzuo.com, was born that year. Subsequently, the popularity of group buying attracted many players, and the models began to differentiate. For example, Lashou.com, launched in March 2010, adopted a group buying + check-in model, while Taobao, then at its peak, launched "Juhuasuan" focusing on product group buying. Soon, portals like Sohu, Tencent, and Sina also launched comprehensive life group buying services. It can be seen that players in the group buying model had already realized the importance of differentiated competition. Why take a differentiated route? Whether it's unmanned shelves or group buying, differentiation is actually to meet the different needs of segmented scenarios. Unmanned shelves can differentiate based on the purchasing habits of different groups, while group buying can launch different group buying standards for different types of products. On the other hand, the logic of reshuffling in unmanned shelves is similar to group buying: either they took the wrong path, had volume issues, or cost problems. When the group buying model emerged, players flocked in. Data shows that in 2010, the number of group buying websites reached 2,612, and at the peak in 2011, it reached 5,058. The "thousand-group war" was real, but behind the savage growth, various problems kept emerging. For example, Nuomi.com was affected by the arcade incident and turned to local life services, while 1288 Group Buying was forced to sell itself after merchants ran away with money, becoming a target of public criticism. In addition to integrity issues, many group buying sites fell into the cost curse due to blind expansion, such as 24quan and Dida Group. The continuous reshuffling of the industry was devastating. By 2014, the number of group buying websites had sharply decreased to 176, with a mortality rate as high as 96.5%. Later, group buying entered the era of giants, with Alibaba investing in Meituan, Tencent investing in Dianping, and Baidu acquiring Nuomi. Thinking carefully, although the number of players in the unmanned shelf field is not as large as during the group buying war, the reshuffling warning line is still being triggered continuously because during rapid expansion, some players have expansion problems, while others are trapped by continuously expanding costs. In this way, the various sequelae currently exposed in unmanned shelves can be well understood. Just like the thousand-group war back then, it's entirely expected that some players got carried away and made wrong moves. But one thing worth noting is that after the thousand-group war, strong players gradually stood out, eventually forming the later pattern of giants dividing the market. Similarly, the continuous reshuffling in unmanned shelves actually indicates that in the near future, steady giants will emerge in the industry, and they will form faster than the group buying giants did. Three Solid Cornerstones Will Support the Continued Advancement of Unmanned Shelves Although unmanned shelves are currently in a rapid expansion period and industry reshuffling is common, we need to think about how unmanned shelves will develop in the future and where they will go. Before that, we need to consider what cornerstones support the advancement of unmanned shelves. 1. Giants Gather, Unmanned Shelves Become Capital Favorites Counting the giants in the unmanned shelf field, there are Alibaba, JD.com, Tencent, Suning, SF Express, etc. It's an open secret that unmanned shelves are recognized by giants. On one hand, the essence of unmanned shelves is retail. Under the current new retail reform trend, e-commerce giants need to go offline, and the emergence of unmanned shelves can serve as a good testing ground. On the other hand, unmanned shelves are a major entry point for giants to seize the opportunity in new retail. If successful, it can help them establish their leadership in new retail. Moreover, recent financing is not uncommon. For example, Miss Fresh's Convenience Purchase project completed an A+B round of $200 million, claimed as the "largest financing in the industry," at the end of last year, with investors including Tencent and CDH Investments. Hami completed an A round at the beginning of this year. Data shows that since the second half of last year, unmanned shelves have seen at least 3 billion yuan in financing. According to the current financing trend and the development stage of unmanned shelves, financing events will continue to emerge. With giants eyeing this market, the intensity of competition in unmanned shelves may not decrease. That is to say, the market will continue to move forward under the stirring of these giant players. 2. Excellent Genes: High Frequency and Rigid Demand The logic of unmanned shelves' operation essentially lies in hitting market demand. To be precise, in the new scenario of unmanned shelves, consumers are willing to pay, and the frequency is high. On one hand, unmanned shelves are a form of near-field retail. If we compare it to vending machines, unmanned shelves bring future-needed products to the forefront, and the product selection is generally highly targeted, so consumer purchase is just a matter of time. On the other hand, the transaction process of unmanned shelves is more convenient and freer, fitting many people's consumption habits. This feeding-style retail model breaks the traditional intermediary transaction model of retail, better stimulating and exploring potential retail demand. With the continuous changes in scenarios and the refined operation of product selection, the future potential of unmanned shelves is evident. 3. Large Space for Technological Iteration, Continuous Industry Evolution Looking at the current players in the unmanned shelf field, open shelves are still the main type. The advantage is that transactions return to the original state, making the purchase process simple and fast. Based on closed, high-integrity environments like offices, the loss rate can be controlled within an acceptable range. But if expanding to more public places, they will face greater loss challenges. With continuous technological improvement, unmanned shelves are moving toward intelligent routes, such as smart locks and positioning functions, to monitor shelf inventory and analyze consumer purchasing behavior. From a practical perspective, technology empowering unmanned shelves not only helps reduce accidental losses but also improves restocking efficiency. In the future, with more technologies such as artificial intelligence, big data, and AI, technological revolutions can bring better transaction experiences for consumers. When the number of points reaches a certain scale, technology-assisted restocking and logistics will gradually produce economies of scale, and the overall industry efficiency will also see a significant improvement. It can be said that achieving profitability for unmanned shelves is not a problem. This means that unmanned shelves, still in their growth stage, will derive more forms in the future. The goal pursued by unmanned shelf players is naturally to achieve profitability by continuously optimizing costs or increasing revenue, but before reaching the destination, they clearly still have a long way to go. The Future of Unmanned Shelves: Wash Out Impatient Players, Leave Reliable Giants It is widely acknowledged that the brutal reshuffling period for unmanned shelves is coming soon. As for when it will come and how fierce it will be, it doesn't actually matter, because a group of valuable players will eventually remain in the industry. Of course, rapid reshuffling can have several signals. First, the collective outbreak of sequelae among players, including some early head players. Second, the slowdown of competition within the field, with fewer blind expanders. Third, the obvious trend of player differentiation, believing that all roads lead to Rome. After rapid reshuffling, what remains may be relatively reliable giants. To become the ultimate giant in the industry, three points are key to determining victory or defeat. First, supply chain capability. Unmanned shelves are still a retail business. Without a supply chain, they are at most middlemen. Looking around at the players, Xingsheng Bianli, Miss Fresh, Convenience Purchase, Guoxiaomei, Feng e Zushi, etc., either rely on partners, build from scratch, or have logistics but no products. Among them, Miss Fresh Convenience Purchase has both a complete instant logistics delivery system and a full-category product supply chain. The significance of the supply chain lies in controlling logistics, product replenishment, warehousing, etc. Directly speaking, an excellent supply chain system can continuously optimize costs. Clearly, as the industry progresses, the quality of supply chain capability will determine players' cost optimization ability, front-end restocking efficiency, and product selection richness, which will determine the final fate of players. Second, capital capability. Unmanned shelves have a large demand for capital, and with the current windfall effect not yet dissipated, the competition will definitely be about the supply and allocation of funds. For example, some players have recently been exposed to capital problems, which is a typical example of not using money well. The path that unmanned shelves have taken so far is paved with money, but going forward, in the post-reshuffling battlefield, players should spend money wisely, such as optimizing point placement strategies. If they still can't spend money well, even if they have money, they will be eliminated. Third, ground promotion capability. Similar to the early development logic of shared bikes, unmanned shelves also emphasize area and coverage. The most important thing for ground promotion is maximizing the benefits of points. Currently, unmanned shelves can still rely on the large market space to spread to places others haven't noticed. But as time goes on, once the era of close combat arrives, point quality may become a hard indicator for measuring the scale of unmanned shelf companies. Strong ground promotion capability means high penetration, greater offline traffic, and is more conducive to feeding back into the company's competitive ability. Therefore, the reshuffling in the unmanned shelf field will continue and even accelerate. The subsequent competition points lie in the comprehensive strength of each player, such as supply chain capability, capital supply and transition capability, ground promotion capability, etc. In the continuous competition, impatient players will be washed out, and unmanned shelves may see the emergence of very strong giants, entering a period of oligopoly. In a word, the law of advancement for unmanned shelves is: wash out impatient players, leave reliable giants. Source: Liu Kuang, understanding the Internet through Zen, WeChat public account: liukuang110 Long press to scan QR code to follow more unmanned retail information -END-