As the pace of life accelerates, buying groceries and cooking has become a luxury for many, prompting entrepreneurs to try offering more convenient fresh food shopping experiences through vending machines or self-pickup lockers. Modern commerce always strives to make life more convenient. With the quickening pace of life, buying groceries and cooking seems to have become a luxury, so many entrepreneurs are attempting to provide more convenient fresh food shopping experiences through vending machines or self-pickup lockers. However, fresh food e-commerce itself still has many unresolved issues. Will this model become another example of new retail? 1 Fresh Food Smart Terminals: A Succession of Players Not long ago, Shanghai City Supermarket, which specializes in imported high-end food, began piloting a fresh food vending machine called "City Box" in Zhangjiang, Shanghai. The products sold are mainly beverages, which is not new. Interestingly, the vending machine also contains fruits such as bananas supplied by Fruit Day, which had recently invested in City Supermarket. ▲ Different forms of fresh food smart terminals, from left to right: City Box, hairy crab vending machine, banana vending machine This type of vending machine primarily selling fresh food is not new. As early as 2010, hairy crab vending machines appeared on the streets of Nanjing; in 2014, vegetable vending machines appeared in Wuxi metro stations; and abroad, there are interesting forms like banana vending machines. In addition to vending machines, fresh food self-pickup lockers have also appeared in residential communities across various Chinese cities. Compared to vending machines, self-pickup lockers have a higher scale and penetration rate. These fresh food smart terminals provide convenience for specific groups, but is this technology and model truly viable? This requires consideration from multiple dimensions: revenue, cost, turnover rate, loss, experience, and demand scenarios. 2 Analyzing Fresh Food Smart Terminals: Five Dimensions, Four Models Cost: machine manufacturing cost, maintenance cost, electricity cost, site rental cost, and depreciation. (Note: restocking cost must also be considered, as fresh food has a short shelf life and requires precise inventory management.) Revenue: direct sales revenue, advertising and promotional effects. Fresh food smart terminals are usually placed in high-traffic areas, so they can serve multiple functions: sales, promotion, and experience. Turnover rate: daily sales turnover rate of products. Loss: The loss of fresh food must be considered, including machine maintenance caused by spoilage. Demand scenarios: Fresh food smart terminals are a new retail terminal that must align with different consumer demand scenarios; incorrect alignment can be counterproductive. Using these elements as a reference, we can analyze the feasibility of different fresh food smart terminal models. When analyzing models, we classify the current market formats into four categories based on two types of terminals (vending machines/self-pickup lockers) and two scenarios (public spaces/residential communities). 1. Public Space Fresh Food Vending Machines City Supermarket's City Box, Wuxi Metro's automatic vegetable vending machines, and Nanjing Tieliu's fresh food vending machines all fall into this category. ▲ Nanjing Tieliu fresh food vending machine at a Nanjing metro station Public spaces mainly refer to non-residential public places such as metro stations and shopping malls. Different regional attributes bring different demand scenarios. In these public spaces, consumer demand is immediate and impulsive; they often want to quench thirst or satisfy hunger right away. Therefore, public space fresh food vending machines mostly contain various beverages and ready-to-eat foods. If ingredients are sold in these areas, they cannot meet the needs of most people, leading to low turnover rates and consequently low sales. From past examples, vending machines primarily selling beverages and snacks have limited profit margins, and with the characteristics of fresh food, profitability becomes even more difficult. Thus, we can see that whether it's Wuxi Metro's automatic vegetable vending machines, Nanjing Tieliu's fresh food vending machines, or various hairy crab vending machines placed in metro stations and shopping malls, these projects ultimately fizzled out. ▲ Hairy crab vending machines at metro stations and on streets There are suitable products for public space fresh food vending machines, but not many. For example, bananas and citrus fruits are easy to store and convenient to eat—just peel and eat. In contrast, other fruits that require peeling and may cause juice to spill are less popular. 2. Public Space Fresh Food Self-Pickup Lockers Unlike vending machines, fresh food self-pickup lockers do not have the characteristic of immediate selection. Consumers at vending machines want to freely choose products, while self-pickup lockers typically require placing an order in advance and then picking up the goods at the locker. The now-defunct fresh-cut vegetable e-commerce company "Qingnian Caijun" once adopted this model: consumers ordered various fresh-cut vegetables in advance and then picked them up at designated lockers at specified times. In its early days, Qingnian Caijun set up self-pickup lockers at Beijing metro entrances, presumably to cater to the busy lives of "Beijing drifters," allowing them to pick up fresh vegetables on their commute. However, for a mega-city like Beijing, with hundreds of metro stations, such a layout requires substantial investment, and the turnover rate of self-pickup lockers is very low. Without external resources, it is naturally difficult to sustain. 3. Community Space Fresh Food Vending Machines Community spaces refer to residential areas, where consumers primarily need household grocery shopping. In China, some people tried placing automatic vegetable vending machines in residential communities years ago, but few achieved scale or persisted. Shanghai's Chuyi Shidai is one of the few that has persisted, using a combined model of community vending machines and self-pickup lockers. As shown in the figure below, the left side is a vending machine, and the right side is a self-pickup locker. The biggest challenge for fresh food vending machines is restocking, because the machine needs to increase turnover to boost sales and offset site rental and maintenance costs. For example, Chuyi Shidai's vending machine has 30 windows, and generally, each window can hold 4 additional units in reserve. If everything sells out perfectly, that's 150 units. But selling only 150 units is hard to offset various costs like site rental (for convenience, each packaged ingredient averages around 10 yuan). This requires increasing turnover and doing sales forecasting to prevent unsold items from causing losses. 4. Community Space Fresh Food Self-Pickup Lockers Self-pickup lockers do not require sales forecasting, eliminating restocking and loss issues, but they bring the challenge of low turnover. ▲ Puyang Caibangzi's community fresh food self-pickup lockers Typically, a community's fresh food self-pickup lockers have 20-30 compartments, and can usually achieve two pickups per day, meaning 40-60 portions can be stocked daily. This requires high average order value and high gross margin to offset costs like site rental. However, increasing average order value and profit margins will limit usage by some consumers, creating a dilemma for operators. 3 Overall Market Conditions From the analysis of models, we see that fresh food smart terminals are constrained by many factors, and the outlook is not optimistic. The current performance of the domestic market reflects this: automatic vegetable vending machine projects in various public places have mostly fizzled out, and various fresh food self-pickup lockers are also struggling to sustain. The following is an incomplete tally of the current status of fresh food self-pickup locker projects:
Puyang Caibangzi: ceased operations;
Qixian Xiangbala: ceased operations;
Handan Baishuyuan: ceased operations;
Aotian Farm Smart Vegetable Basket Project: phone unanswered, official website invalid;
Nanchong Lübang Tiantian Maicai: undergoing business adjustment;
Wuhan Jiashiyi: self-pickup locker project ceased, switched to wholesale business. Projects still operating: Huainan Caizi; Nantong Caicai; Zhengzhou Yun Chufang Dianchichi; Heyuan Chuniang Kuaixian. However, the official website traffic, app downloads, and WeChat readership for these projects are not optimistic. Three companies have sustained operations and reached a certain scale: Jiayile (Changshu), Chuyi Shidai (Shanghai), and Shixing Fresh (Suzhou/Shanghai). What is their profitability status? Previously, a Jiayile executive said in an interview with China Business Journal: "Including government subsidies, we can achieve break-even." Chuyi Shidai had 7 community sites in 2013 and has grown to 10 so far. Among them, Shixing Fresh has the most outlets and the largest scale. Founded in 2014, Shixing Fresh has received a total of 474 million RMB in venture capital, has not yet turned a profit, and suspended its Beijing operations at the end of 2016. Shixing Fresh's founder Zhang Hongliang previously said in an interview with Tianxia Wangshang that they would achieve profitability in some cities within the next two years. Whenever fresh food e-commerce is involved, problems become more complex. Fresh food smart terminals currently have limited application scenarios in China, few suitable products, and profitability requires support from a series of factors. Finding a new retail path for fresh food e-commerce still sounds somewhat difficult. Can we think differently? Are these difficulties necessarily due to problems in the distribution and retail links? In any case, pioneers are still striving. Perhaps one day they will overcome the aforementioned problems and bring a truly convenient solution to people's lives. Source: Field Observation AgriReview -END-