Some predict that unmanned shelves will become the next 'shared bikes', with massive capital inflows leading to extreme market expansion, but due to low barriers and lack of differentiation, they may easily fall into the same subsidy war, leaving a mess after the battle. Recently, many office buildings in first- and second-tier cities have added an office 'convenience store'. These shelves are stocked with a variety of snacks, including drinks, chips, biscuits, dried fruits, cakes, and more. Each product has a QR code attached, and scanning it allows for quick payment. Ma Yun never expected that his painstaking layout of offline supermarkets would be upstaged by office unmanned shelves. On January 5th, midday news reported that Suning recently announced its unmanned shelf, Suning Xiao Biu, officially launched in Nanjing, with plans to complete the deployment of 1,000 shelves in Nanjing by the end of this month. A person in charge of Suning's convenience stores revealed that the unmanned shelf plan aims to complete the deployment of 50,000 shelves in 2018. Such a large investment makes one curious: what kind of business is the unmanned shelf? With the 'sharing economy' and 'new retail' burning hot, unmanned shelves have naturally become the new favorite of capital. A small shelf, requiring not much cost, can cut into the retail market. The New Favorite of the Office Economy Unmanned shelves are technically simple: attach a payment QR code, a shelf (and refrigerator), stock daily drinks, snacks, and small eats, mostly unlocked, no storefront, small footprint (within 1 square meter), unattended, users take items and scan to pay, all based on self-discipline. Unmanned shelves target the 'office economy' and aim to seize the next trend. In fact, Suning is relatively late to the game. Since their emergence in 2015, unmanned shelves have been highly sought after. In first- and second-tier cities, there are nearly 100 million office workers, with the main demographic being post-80s and post-90s, who happen to be the mainstream consumers of snacks. An office worker said: "Now when I'm hungry in the morning or don't have time for breakfast, I go to the shelf to buy something, like cream puffs or chips, to fill my stomach." Indeed, urban young people often rush in the morning and skip breakfast. Additionally, unmanned shelves have coincided with the boom in mobile payments. This new consumption model of 'self-take, self-pick, self-pay' quickly spread, becoming the 'new favorite of the office economy'—a perfect combination of timing, location, and people. Capital Influx, War Imminent The emergence of unmanned shelves caught retail giants off guard. Who would have thought there was such a virgin territory in retail? So the big players quickly boarded the train. Before Suning, Alibaba, Tencent-affiliated Miss Fresh Convenience, Cheetah Mobile, JD Daojia, SF Express, and other giants had already entered the unmanned shelf space. On December 29, 2017, Miss Fresh Convenience announced its split and independent operation, having secured Series A led by Tencent and Series B led by CDH, with a total of $200 million in A+B financing. On December 19, Alibaba, together with Midea Group, launched 'Xiao Mai Gui', officially entering the unmanned shelf field. Cheetah Mobile, seemingly unrelated, also confirmed its layout in unmanned shelves that day, with its 'Bao Bian Li' operating since early November and having deployed 5,000 points. JD Daojia's unmanned smart cabinet has been upgraded to the second generation, and SF Express's unmanned shelf project 'Feng e Zu Shi' also announced official operation at the end of November. Currently, there are already multiple unmanned shelf startups, including Xiao e Wei Dian, Tiger Quick Buy, Guo Xiaomei, Hami Technology, Xing Bian Li, Snack e Jia, Ling Wa, and Seven Koala. According to the '2017 China Unmanned Shelf Market Prospect Research Report' released by China Commercial Industry Research Institute, as of September this year, at least 16 unmanned shelf companies had received investment, with total financing exceeding 2.5 billion yuan. Underestimated Human Greed, Overestimated the Quality of White-Collar Workers Some predict that unmanned shelves will become the next 'shared bikes', with massive capital inflows leading to extreme market expansion, but due to low barriers and lack of differentiation, they may easily fall into the same subsidy war, leaving a mess after the battle. Like many sharing economy projects, unmanned shelves will also face severe tests of consumer quality and trust. According to reports, the unmanned shelf project 'Yong Dian Xin Ba' found after deploying 64 shelves that, when comparing front-end and back-end data, the loss rate exceeded 20%, with the worst loss rate reaching 39%. Sometimes the back-end showed many products still on the shelf, but when replenishment staff arrived, they found the shelves empty. A founder of an unmanned shelf company said: "We often see people taking items without paying. Although they are white-collar workers in office buildings, they don't necessarily have high awareness or quality." High loss rates are one issue; on the other hand, the daily replenishment labor costs are also high. Under such severe conditions, it is difficult for unmanned shelf startups to achieve profitability. Just like today's shared bikes, even with millions of ofo and Mobike on the streets, investors are still troubled by monetizing traffic. Internet entrepreneurship often cannot achieve monetization through traditional business thinking. Whether one can innovate on this less-than-one-square-meter shelf requires the wisdom of entrepreneurs. Source: E-commerce News -END-