Every convenience store has its hiring quirks. At Alldays, the cashiers are usually aunties in their 50s. At Family Mart, millennials, rarely past thirty. But one store has the quirkiest set of cashiers among them all: none.
Xing, a burgeoning chain founded in mid-2017 by tech executive Si Jianghua, is doing away with the legions of cashiers that now populate convenience stores in a gamble that the future will be self-checkout, and that staff (the stores still have 4-5 employees each) are better used to “guide customers” (being referred to as goudao, or “shopping guides” in Chinese) and keep the store in order.
Xing founder, Si Jianghua
Of course, self-checkout is not a new idea. The concept has been around for years in Wal-Marts, Boots and countless other retailers in the West. But not like this. For one, Xing does not have self-checkout kiosks with a bagging area and a dedicated scanner, like the above-mentioned chains do. Instead of just swapping the customer for the cashier, Xing swaps the infrastructure as well. The only tool needed? A mobile phone.
The process works like this. Customers enter the bright-yellow Xing stores and do their shopping. Once they have their items, they go to a counter in the front. At this point, if they haven’t already downloaded the Xing app, they do so. Then they open the app, using their phone’s scanning function to register the items they want to purchase. They pay via mobile platforms WeChat Pay or Alipay, and once they’ve completed payment, receive a QR code in return. At the store exit, a second scanner awaits, which confirms the purchase by scanning the QR code. Done.
For founder Si Jianghua, this is the future. A former supply chain director at Alibaba and regional head at restaurant review website Dazhong Dianping, Si sees unmanned shopping as the next frontier in retail. Though it only launched last June, Xing now has close to 20 stores and claims to have processed more than three million orders. Investors include the original CEO of Meituan, Wang Xing, and Zhang Tao, the original CEO of Dazhong Dianping, among others.
Though it only launched last June, Xing now has close to 20 stores and claims to have processed more than three million orders
On a recent visit to a location in downtown Shanghai, where the company is headquartered, the store was buzzing with curious customers of all ages, drawn in by the novelty but then persuaded by the premium product mix, which includes unique items like Patron tequila, dried mulberry snacks, and freshly prepared meals. A more advanced version of the store is currently being developed by Japanese engineers, according to a December 2017 speech by Si about Xing’s future development, though what that means is not yet clear.
For Si, it’s not just about convenience stores. He was inspired by a trip to Japan and an encounter with the country’s legendary network of vending machines, and has said that his company is in the “instant consumption” business, regardless of what the delivery of the product looks like. As such, Xing is also in a race to cover China in vending machines, one that Si believes will be won by whichever company is the first to 300,000 locations. He predicts the game will be won or lost by Spring Festival 2018, less than a month away. Some critics have charged that in his push to blanket the country in vending machines, Si has focused solely on numbers, with many machines in obscure locations.
Xing is also in a race to cover China in vending machines, one that Si believes will be won by whichever company is the first to 300,000 locations. Si predicts the game will be won or lost by Spring Festival 2018, less than a month away.
Si has pushed back by saying his retail concepts are based on the “15 minute circle” that young consumers tend to stick to — this refers to the idea that all of their consumption is done within 15 minutes of their work or home, and whether it’s the convenience store or the vending machine, being within that circle will be the key to winning the retail market.
The aunties of Alldays and the kids of Family Mart are probably secure in their jobs for now, but China’s staid convenience store sector is due for a shake-up, and Si’s new ideas are, hopefully, just the beginning.
