Vending machines boast high technical content, novel sales methods, vast market potential, and genuine products, which determine their broad development prospects. Moreover, they align with new consumption patterns such as electronic shopping, creating enormous business opportunities. Vending machines are often called "super salespeople who never clock out."
Convenience: Some people may never go to a supermarket just to buy a drink, but they are more willing to pay when they see a vending machine, satisfying consumers' immediate needs.
Natural monopoly: In a relatively small space, the market cannot accommodate two vending machines, leading to a natural monopoly. Thus, vending machines gain a certain degree of pricing power.
Market capture: For Chinese consumers, the vending machine sector is still immature, but areas with high foot traffic such as commercial centers, office buildings, and communities are highly sought after. Whoever occupies this cake first will own the market.
Labor savings: Vending machines greatly save labor, and for managers, with an app at hand, they can clearly see daily and monthly sales, revenue composition, and inventory levels in the machines.
As is well known, the domestic vending machine industry has undergone earth-shaking changes in recent years. These changes can be understood from the following perspectives.
1. The domestic vending machine industry has entered a rapid development stage, driven by both internal and external factors.
In recent years, due to changes in the external economic environment, many industries, especially the retail industry, have undergone profound changes. Facing high rents, high labor costs, and limited room for price increases, vending machines have gradually stepped onto the historical stage, and more people have begun to pay attention to this field. In fact, before this, some special domestic industries, such as production enterprises, had already begun transformation and upgrading. The rise of the industrial robot market itself is very illustrative. Industry has industrial robots; what about retail? What solution can solve the problem? Currently, vending machines are the only relatively stable solution. Working 24 hours, low cost, simple and reliable, and easy to operate and maintain—these are probably what all retailers dream of. Therefore, the development speed of the vending machine industry in recent years has been significantly faster than in the past.
As of 2015, the number of vending machines nationwide was approximately 150,000, a 15-fold increase in five years. In the United States, the ratio of vending machines to convenience stores is 30:1. If the development of vending machines reaches the U.S. level, the total number of vending machines nationwide would approach 1.38 million.
In the past five years, the average annual sales growth rate of the vending machine channel has exceeded 100%. The average monthly output per vending machine has gradually increased with rising economic and living standards. It is estimated that by 2020, a vending machine's monthly sales will reach 6,000 RMB, and the annual sales of the vending machine channel will approach 100 billion RMB.
2. Technological revolution has promoted the upgrade of self-service vending equipment, and the content and fields of industry services are expanding.
Industrial technology and internet technology have promoted the upgrade of self-service vending equipment. Early domestic vending machine manufacturers mainly introduced and imitated foreign models, but over time, especially after the introduction of internet technology, we have seen significant changes in the past two years. The iteration of equipment in the entire vending machine industry has accelerated, and more functional vending machines have been developed, such as lunch box machines, vegetable vending machines, and advertisement distribution machines. The service fields of the entire industry are continuously expanding, and the market width is further broken. Today I sell water; tomorrow I might sell lunch boxes.
3. While more high-quality resources enter the industry, competition in the entire industry market has intensified.
Now, whether it is media, FMCG companies, internet companies, or financial service units, they have basically appeared in the industry. Compared with the past, competition in this industry today may be unprecedentedly fierce.
This time, we mainly analyze the latest developments of FMCG companies (beverages) in the vending machine industry for your reference.
Nongfu: Comprehensive Upgrade of Equipment Cashier System
On December 15, CPI, a globally renowned cashier system service provider, announced a strategic cooperation with Nongfu Spring, a leading domestic FMCG company. Subsequently, CPI brand paper and coin acceptors for vending machines will be fully installed on Nongfu Spring's vending machines.
It is understood that since entering the vending machine field in 2013, Nongfu Spring has deployed and operated more than 20,000 vending machines nationwide, making it the largest FMCG company in China in terms of deployment and application scale in the vending machine business. However, with the development of business scale, the stability requirements of cashier system equipment have become increasingly prominent. In view of this, Nongfu began a comprehensive upgrade of its equipment cashier system. After long-term testing and overall evaluation of CPI's recognizers, Nongfu Spring officially decided to cooperate with CPI. According to this plan, Nongfu's equipment will be fully equipped with CPI's paper and coin acceptors, including replacing the recognizers on machines still in the warehouse of vending machine manufacturers awaiting shipment.
Wahaha: 2 Billion RMB Continued Investment in Vending Machine Field
It's a long story. As early as March 2015, Wahaha attempted to cooperate with Ubox to explore smart vending machine offline deployment and sales channel construction, but unfortunately it came to nothing. However, at a recent important business meeting of Wahaha, not only was the news clearly conveyed that it would fully attack the vending machine field, but sources also confirmed that the vending machine business company invested in by Wahaha founder Zong Qinghou and his younger brother Zong Zehou—Zongsheng Intelligent Technology Co., Ltd.—has been officially registered and established.
Moreover, within the next three years, Wahaha will invest a huge 2 billion RMB to develop the vending machine business, planning to deploy a total of 100,000 vending machines to build Wahaha's own national intelligent retail terminal network. Zongsheng Company will uphold the concept of "co-creation, win-win, and sharing" of founder Zong Qinghou, actively build an open industry platform, and enable all parties to "do their best and take what they need."
Huiyuan: Cooperation with Aucma
Domestic juice giant Huiyuan has recently been reported to have officially begun testing the vending machine business, with supporting teams currently working in an orderly manner. Insiders also revealed that Huiyuan's first batch of equipment will cooperate with the vending machine brand Aucma.
Ms. Sun, head of the market analysis center of China Vending Machine Industry Network, stated that with the rapid changes in the domestic retail market environment, the basic trend of FMCG companies as upstream industrial capital entering the vending machine industry has formed. Huiyuan's recent entry into the vending machine business is not without warning. Its earlier acquisition of Suntory brand-related business may not exclude considerations for the vending machine business. Suntory has long been cultivated in the vending machine industry, with many products being classic in the industry. Suntory executive Li Fengqi is also one of the earliest experts in China to study the vending machine product supply chain. In many aspects, Huiyuan has unique advantages. On the equipment supply side, Aucma, which has frequently appeared this year, is undoubtedly a beneficiary of this wave of market.
In addition to the above companies' recent significant actions, other beverage companies such as Coca-Cola, Master Kong, Uni-President, and Jinmailang have not been idle either. They are rumored to be quietly training and forming "vending pilot troops." In China, vending machines are accelerating their popularity with strong momentum.
According to Nikkei Chinese on December 21, as the largest manufacturer in China, Japan's Fuji Electric has doubled production of related models. On the one hand, local Chinese companies are also rising, while simultaneously advancing high-tech features such as instantly grasping sales information of each model and utilizing it. As obstacles to popularization such as malfunctions caused by paper money and theft are cleared, the supply of vending machines in China is expected to surpass that of Japan, the "vending machine powerhouse," by 2020.
▲ China's vending machine market size (Nikkei Chinese)
On the other hand, as local large beverage manufacturers such as Nongfu Spring, which sells bottled water, begin to add vending machines, the strength of local vending machine manufacturers is also increasing. Refrigerator manufacturer Aucma and Qingdao Yichu Digital Technology, which specializes in automatic vending equipment, have both started increasing production, wanting to share in Fuji Ice Mountain's market share in China.
Beijing Ubox Online Technology (Ubox) is the largest domestic company operating 60,000 vending machines. On the China map displayed on its sales management system, images of currently popular products appear and disappear at a flash. The displayed sales numbers change as rapidly as a slot machine screen, increasing in an instant.
The company's chairman and CEO Wang Bin confidently stated that in terms of technology, they have already surpassed Japan.
Wang Bin developed a system that can instantly grasp the sales and inventory of all vending machines. By accumulating big data to analyze the relationship between weather, day of the week, and sales of various products, the system automatically decides the replenishment of various products for each vending machine and even the delivery truck routes, issuing instructions to drivers every morning.
Including the prices displayed on the vending machine's LCD screen, product information can be changed at any time from the headquarters, and flexible promotions such as price reductions can also be conducted. The screen can display advertisements from financial institutions, and it is expected that advertising revenue alone will reach 250 million RMB in 2016. Wang Bin is increasingly confident about high-tech vending machines, stating that by 2020, the number of machines in use will increase to 500,000.
Summary
The past five years have been the most turbulent period for domestic retail industry enterprises. Large supermarkets have been severely impacted by e-commerce, while convenience stores have shown strong growth momentum. In the next 16 years, online and offline integration will accelerate, and new business models and concepts under big data, O2O, and B2B will emerge endlessly. Driven by capital, the retail industry will become more concentrated. With the emergence of mobile payment and the introduction of intelligent vending machines into market operations, the popularization of vending machines is only a matter of time. 2016-2017 are two crucial years for the vending machine industry. In the era of the internet, everything is changing, and it is the general trend. For distributors, whether to change or not is no longer a matter of their own will. The wind is coming; before the blowout, distributors deploying vending machines may be a good opportunity.
This article is compiled by
References: Kuaiyidian, Vending Machine Industry Network, Reference News, etc.
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