---
title: "The New Retail Formats That Could Terrify Jack Ma in the Future: Why Super Species and LINE Theme Cafés Are Leading the Way"
description: "This article explores the emergence of new retail formats in 2017, such as self-service terminals, Yonghui's Super Species, and IP-themed cafés, arguing that they represent a rebirth of the industry driven by the disruption of old business models and the ongoing competition between brands and channels."
author: "海水很蓝"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2017-05-21"
language: "en"
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---

# The New Retail Formats That Could Terrify Jack Ma in the Future: Why Super Species and LINE Theme Cafés Are Leading the Way

> This article explores the emergence of new retail formats in 2017, such as self-service terminals, Yonghui's Super Species, and IP-themed cafés, arguing that they represent a rebirth of the industry driven by the disruption of old business models and the ongoing competition between brands and channels.

Source: New Consumption Insider (ID: cychuangye)

**[Introduction]** If we must define what the critical juncture of 2017 means for the entire new retail and new consumption landscape, I would use the word "nirvana." After nirvana comes rebirth. Any new thing emerges when old profit models and ecological relationships are disrupted and can no longer sustain themselves. It is no exaggeration to call 2017 the first year of new consumption and new retail. The birth of Yonghui's Super Species, Hema Fresh's entry into Beijing, the convenience store wars, the bloody battles in self-service terminals, and the explosion of NetEase Yanxuan—these signs may not have generated as much buzz as the dog-eat-dog bike-sharing PR battles or the capital wars over shared power banks, but they represent a milestone in China's new consumption and new retail.

**Explosion of Self-Service Terminals**

The Ubiox vending machine next to my office was quietly replaced by a karaoke machine called Uchang, just like that. Overnight, new self-service terminals have filled the streets and alleys.

Currently, there are two sub-sectors in self-service terminals:

**Self-service vending machines: Represented by Ubiox, mainly located in subways and office buildings.**

It is one of the companies with the largest number of terminals in this field and has been deploying for the longest time. In my memory, Ubiox has weathered the O2O war, the ride-hailing war, the bike-sharing war, and the shared power bank war. Now it finally feels like it has entered its own main battlefield.

However, Ubiox hasn't had long to celebrate, because a variety of self-service terminal players have suddenly emerged, with many variations.

**For example, self-service adult products, self-service alcohol, self-service ice cream, self-service yogurt, self-service coffee machines, and self-service boxed meals.**

Wait! Self-service boxed meals—didn't that die once before? How has it come back to life?

**But don't forget, Chinese internet entrepreneurs never learn from the past, after all, they're burning VC money, even if ultimately it's retail investors' money.**

In short, our Ubiox hasn't even harvested the fruits of victory when a wave of barbarians charges in from who knows where.

**Self-service entertainment systems: I didn't directly say self-service karaoke machines because this system also includes self-service claw machines.** Our Longmao Jun once wrote an article about claw machines, which was later shamelessly plagiarized by various parties, suddenly making the claw machine concept popular.

Today, let's further interpret claw machines and self-service karaoke machines; they indeed share many similarities. Their usage scenarios are extremely similar. **A veteran karaoke machine promoter told New Consumption Insider that karaoke machines and claw machines are products where channel and scenario are king.**

The quality of the product experience itself isn't that important, because typical consumers are mostly people waiting in line at a restaurant in a mall or waiting in the mall. Their current strategy is to deploy in large numbers at locations with the best business and the most queuing, and users prioritize convenience over price.

The operator further explained that even with two machines, one near a popular restaurant and one in a remote corner downstairs, the upstairs machine can charge more than double the price, yet people still queue upstairs while no one uses the downstairs one. Because this kind of entertainment consumption is impulsive, users aren't very sensitive to price or experience.

**In reality, whether you can secure the most critical locations in a mall doesn't depend on transparent price bidding, but on relationships with the commercial real estate leasing staff.**

The self-service terminal business is essentially a business highly dependent on resource development. If Wanda wanted to deploy claw machines one day, I believe they would do just fine; operating claw machines isn't complicated, it's just that the richest man might not look down on this business.

**Finally, I want to focus on the self-service adult products and self-service snacks businesses that New Consumption Insider recently discussed.**

In Longmao Jun's previous article on claw machines, he mentioned self-service adult products. In his view, the self-service adult product model is very difficult. However, this time New Consumption Insider has changed its mind. **Because with changing scenarios, some models have become viable.**

**The premise for this model to work is finding a good scenario.**

The new scenario is deploying in areas dense with factories and schools. It is said that the proportion of college students trying adult products is rising significantly. It seems our college students are indeed pioneers of the times in this regard.

With good privacy protection and product isolation zones, the experience is indeed much better.

And the self-service manufacturers use a method of giving away Durex condoms online for free to attract customers. This traffic generation method is indeed effective.

So, sometimes, by targeting specific groups and changing specific user scenarios, a business model that once couldn't get off the ground can come to life.

**Now, let's talk about the service of deploying self-service snack purchasing in companies.**

New Consumption Insider believes this is nothing new, and the logic is hard to establish.

**The reason it can't work is that snacks are a low-margin business, and relying on employees buying snacks at certain times won't cover logistics costs.**

**So, my definition of this business is: it's neither scalable nor economical.**

Unless you can build a dense delivery and restocking network, otherwise, labor costs alone are hard to cover.

These two cases illustrate one thing: self-service terminals will ultimately compete on channel density and supply chain cost control; it's a capital-intensive business. **In the end, this business will test financing capabilities and operational efficiency, because no industry emphasizes single-store sales per square foot more than retail.**

**The Emergence of Super Species**

Recently, many people have equated Super Species with new retail. So what exactly is the Super Species format? New Consumption Insider defines Super Species with five sets of keywords:

**1 Whose Super Species?** Yonghui's Super Species. Who is Yonghui? If we were to label it, it's a supermarket that excels in fresh produce, and a giant in China's supermarket industry.

**2 What exactly is Super Species?** Simply put, it's a new format that combines a future supermarket focused on fresh produce with dining. The initial operating area is 500 square meters, with over 1,000 SKUs.

**It includes eight innovative themed species: Salmon Workshop, Lobster Workshop, Beef Workshop, Wheat Workshop, Yongyue Club, Living Kitchen, Healthy Life Organic Pavilion, and Waiting for Flowers Flower Art Pavilion.** By combining different lifestyles in the same space, it deeply integrates dining with lifestyle, providing users with a better experience.

**3 The core is using content + consumption to engage users comprehensively and for a long time.** New Consumption Insider believes that first-generation consumption and retail brands engaged users through mindshare and functionality, while new consumption and new retail engage users through scenarios and content.

Among the eight main brands of Super Species, four are dining, while also introducing lifestyle brands like wine and flowers, engaging users comprehensively and giving them more reasons to stay and experience, breaking the traditional supermarket model of "browse and leave," guiding users from low-ticket consumption to higher-level services.

**4 Introducing a partnership system in the operating model.** This is not new in internet companies, but relatively rare in traditional retail. It can be understood as an innovation in internal incentives, bringing in true owners and operating entities for each individual species to motivate the management team. Each species operates independently with its own profit and loss, maximizing entrepreneurial vitality.

**5 Using technology and systems to improve efficiency.** Electronic labels, self-checkout systems, and electronic number callers significantly reduce user waiting time and optimize the user experience.

**In summary: it expands the traditional single supermarket model, turning the traditional supermarket into an experiential format of supermarket + dining, greatly optimizing the traditional supermarket service experience.**

Then, relying on a strong global supply chain, premium product lines, and high-end ingredients, it achieves consumption upgrades in the traditional supermarket format, bringing young people who had drifted away back offline.

**Here, let's do some extended reading analysis. At Green Safe in Shanghai, New Consumption Insider saw an exploratory new format where part of the restaurant space is used to sell fresh ingredients, such as steaks and other foods closely related to the restaurant's menu. This can be understood as a dining format + fresh ingredient supermarket.**

Nayuki Tea, which New Consumption Insider saw in Shenzhen, is also a similar cross-industry format. It focuses on tea + soft European bread, organically combining the two categories through a good experience space, deeply extending the original tea sales' average ticket price and raising single-store sales per square foot.

There are many such cross-industry combinations; in short, they are all interesting new retail crossovers. They are quite reminiscent of what was once called social e-commerce in the social networking era, or what is now called content e-commerce.

**Ultimately, it's about using super content and super products to attract user attention, then monetizing that attention in one go.**

**The Future of Unmanned Supermarkets Is Budding**

Unmanned supermarkets are already a mature format abroad, but they are just beginning in China.

Even domestic companies providing technical solutions for unmanned supermarkets are quietly serving foreign clients first, indicating that the domestic unmanned supermarket format hasn't yet emerged from its infancy.

Unmanned supermarkets have several advantages: saving labor costs and optimizing the checkout experience. Essentially, they are a larger version of self-service terminals, with a richer SKU selection to better meet consumer demands.

However, they also have disadvantages. In China, unmanned supermarkets may face unknown user moral risks, product shrinkage, and complex restocking management systems. Of course, rental costs per square meter are not cheaper.

**Looking at neighboring Japan, the most mainstream retail format is still convenience stores, so New Consumption Insider is cautious about the development of this new retail format in China.**

**Cross-Industry IP + Coffee Cultural Brand Spaces Are Booming**

In Beijing's Shibao Street, A Li has opened an A Li café, finally fulfilling the dreams of all the girls with youthful hearts.

On Madang Road in Shanghai, the Kumamoto Prefecture Promise Coffee Shop has also opened. Stepping into this narrow café, you're surrounded by adorable Kumamon bears.

Shenzhen has also opened a LINE-themed store to satisfy girls' hearts, with a tall LINE character at the entrance to control the flow, allowing girls and boys to enter one at a time for photos.

Comparing the three café formats, A Li and Kumamon are still somewhat traditional café formats, while LINE better fits the definition of new retail, and its popularity can't be compared to the other two cafés, which only have visitors browsing.

Having visited in person, New Consumption Insider found that the entire LINE-themed space includes a café (with booming business and long lines, comparable to the nearby Heytea queue), a themed clothing store with various T-shirt styles, and most impressively, a dedicated photo zone, finally satisfying the photo-obsessed who want to post on social media.

**Through the integration of three formats, users can enjoy the original café space functionality, buy various merchandise, and satisfy social needs** (boys no longer have to worry about where to take their girlfriends).

**The characteristics of this new cultural retail space format are:**

1 **It requires a fan base.** Without a traffic-generating IP, the death rate exceeds the probability of success. Spiritual and cultural consumption essentially materializes the scenarios and idols that users couldn't access in movies or anime, providing close interaction with IP characters offline. New Consumption Insider thinks it's not much different from attending a celebrity meet-and-greet.

**2 The format must have a clear main business.** Just because there are cultural products and loyal fans doesn't mean you can ignore that the essence of the service industry is still service and products.

New Consumption Insider visited the Kumamon café and found that the so-called café space didn't have the feel of a café. It was more like a professional Kumamon doll store that also sells coffee on the side.

**So, no matter how strong your IP is, if the coffee isn't good, users won't support you indefinitely with their spirit.**

**3 How to enhance interaction between fans and the IP is something every cultural space should consider when improving the experience.** Three Squirrels' feeding store is a good positive example, consciously designing the integration of product purchase and IP interaction, even incorporating game elements.

**The Critical Point for New Retail's Birth: Reconstruction of the Value System**

**Finally, New Consumption Insider wants to discuss the fundamental factors driving the transformation between old and new consumption and retail.**

We won't talk about explicit factors like labor costs and service experience; this time, let's discuss the hidden factors in business competition.

**In Michael Porter's book "Competitive Strategy," he describes the forces driving industry competition. He outlines five major forces:**

**1 Potential new entrants. 2 Substitute products and services. 3 Bargaining power of buyers. 4 Bargaining power of suppliers. 5 Rivalry among existing competitors.**

A new interest pattern emerges mostly from a temporary equilibrium reached after intense competition between new entrants and existing players.

**The driving force behind new retail comes from these competitive forces. Why seek new retail formats?**

In the past, commercial real estate, as the most important interest group in offline business, has been in a game with brand owners.

When offline real estate is strong, brands begin to shrink and seek new traffic channels, so brands start moving online in large numbers to escape the constraints of traditional channels. **Traditional brands trying to go online is a result of the offline business ecosystem game.**

**Brand owners quickly discover that all crows are black; when they aren't strong, they soon become laborers for Tmall, so they turn their attention back offline.**

But offline rent is still expensive, so to go back, they must find ways to optimize efficiency:

Either use fewer people to do more things.

Or use less space to sell more goods.

In short, efficiency must be optimized. So new retail formats have made many attempts, and no matter how hard they try, they can't escape two things:

**1 Getting users to come back, be willing to shop and experience, and continuously filling new commercial spaces with more experiential content.** After all, you can't play claw machines online. You still need to go to a restaurant to eat with your girlfriend, and you still need to go offline to get close to your idol.

**2 How to sell goods better and optimize the combined sales model.**

Just at this time, they caught the dividends of consumption upgrades and mobile payments. Convenience stores and self-service terminals with smaller areas and fewer staff have become new entry points for brands to renegotiate and reshuffle with channels.

Then online players also realize that some experiences and non-standard services can't be moved online. So, after a certain stage of the game, they reconcile; neither can kill the other, so they continue the game until equilibrium.

**This game will continue. Brands sometimes return online to grab dividends, and sometimes return offline to open stores for experiences.**

History and business advance through such continuous games. We also call this game competition.

This is the origin of new retail; it's essentially the sum of the ongoing game between brands and channels, these eternal rivals.

The game won't stop, so look ahead five years, and a new window will surely appear. This wave of new retail's profit redistribution game is indeed not to be missed.

Source: New Consumption Insider (ID: cychuangye)
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