From a crisis environment to unprecedented technological innovation

From a crisis environment to unprecedented technological innovation

In response to the global crisis of infection, each country is undergoing unprecedented technological innovation. Looking at history, humankind, which has evolved over the crisis, has undergone major changes in response to the spread of infection worldwide.

"Non-contact business" that attracts a lot of attention due to the corona sickness Will it continue to grow even after corona?

The epidemic of the new coronavirus, which began earlier this year, has disrupted various industries in China while providing opportunities in some areas. "Non-contact business" is one of them. There is also a view that the renewed attention to non-contact business in this situation will be a turning point in the industry. But we should also look at the basic issues that exist in non-contact businesses here.

The fields and products included in the non-contact business can be broadly divided into three. The first is unmanned retail business such as unmanned convenience stores and unmanned product shelves. The second is a smart delivery locker. The third is delivery robots such as catering robots.

Reorganized unmanned retail business
Regarding unmanned retail businesses such as unmanned stores and unmanned product shelves, there was a boom in the establishment in 2017, but as a result, it was not accepted by the market, many have already fallen into poor management, and some companies are still alive. Very few.

In 2016, when the completely cashless payment "Amazon Go", which is often referred to as an unmanned supermarket, appeared, companies engaged in unmanned retail business were founded one after another in China. Known companies that were born in this movement include "Bingo Box," "Xingbianli," and "Guoxiaomei."

Unmanned convenience store "Bingo Box"

From 2017 to 2019, at least 50 companies were founded, and the top ten companies raised a total of 3 billion yuan (about 45 billion yen). In addition to major investment companies, major IT companies such as Alibaba and Tencent have also entered the industry. But the industry soon entered a restructuring phase. Kagami merged with "Fanqie Bianli" in the second half of 2017, and started reducing the number of staff and removing product shelves in 2018. Following that, a large-scale restructuring was also carried out in the unmanned product shelving business operated by the fresh EC "MissFresh" and Ryoko Sakka.

There are unmanned stores and unmanned product shelves that are still in operation, but in most cases only processes such as payments are unmanned. In many cases, they are backed up by large companies. Bianlifeng, an unmanned convenience store under Alibaba, is also "unmanned" only for payments, and since there are still staff in the store, it cannot be regarded as a successful example of unmanned retailing in a pure sense.

Unmanned product shelves for "convenient bees (Bianlifeng)"

Smart parcel locker struggling to monetize
Compared to the unmanned retail business industry, which has tended to be decentralized, the smart parcel locker industry, which has developed under the initiative of large companies, has a prominent tendency to be centralized. Leading companies include "Ching I Ching (sposter)", "Toyosu (Hive Box)", and "Tomitomo Treasure".

Companies that invest in China Post are the state-owned logistics giant China Post Group, Alibaba-affiliated logistics company Cainiao Network, and investment company Fosun Group. ) ”Is lined up. Behind Toyosu is the logistics giant“ Shunho Express (SF Express) ”, and behind Tomyu Treasure is the financial company group“ fuiou (fuiou), which focuses on online payments. ) ”Is waiting.

One of the major reasons why the parcel locker industry is backed up by logistics companies and financial companies is that it is difficult to monetize despite the large initial investment. The main sources of income from locker operations are advertising revenue from companies, revenue from delivery services, and revenue from temporary luggage storage services. Revenues from delivery services are small but relatively stable, but otherwise they are struggling to monetize.

Food delivery platforms such as "Meituan Waimai" and "Ele.me" are currently showing the most remarkable movements regarding non-contact delivery lockers. During the new coronavirus epidemic, Meituan sold 1000 smart food lockers for food delivery all over the country. Ele.me's head of logistics, Wu Xueyi, also announced that he plans to deploy 1,000 lockers in Shanghai and 3,000 lockers nationwide.

Non-contact delivery process by Meituan Waimai (data from the official website of Meituan Point Review and the Center for the Development of Public Securities)

The delivery locker has the same problem of difficulty in monetization as the delivery locker. Furthermore, since sterilization and heat retention are required, it is a big issue to balance user satisfaction and cost. In this area, it would be reasonable to leave it to the food delivery platform, which has accumulated experience in food delivery.

Serving robot at a crossroads
Due to the epidemic of the new coronavirus, the demand for robotic serving services, which had been fading for a while, increased. Serving by robots has come to be used not only in special places such as infectious disease endemic areas and medical facilities, but also in general restaurants as a powerful means of giving consumers peace of mind in terms of infection prevention. In addition to manufacturers specializing in catering robots such as "PuduTech" and "KEENON Robotics", IT companies such as "Cheetah Mobaile" are also entering this field.

Serving robots are two to three times more efficient than humans, and the monthly fee for one robot is 3,000 yuan (about 45,000 yen), which is much lower than the labor cost. If mass production progresses in the future, the usage fee may decrease further. However, the problem is that there are very few parts that robots can handle in the complex environment of restaurants at this time.

Furthermore, there are common problems in each field belonging to the contactless business. The contactless business was activated this year due to the special situation of the new coronavirus epidemic. Can these areas continue to develop even after society returns to normal?

Is a contactless business really needed?
Demand created under special circumstances will not last forever. In the long run, the market will return to its original supply-demand relationship.

In China, labor costs are gradually increasing due to the decrease in the workable population and the improvement of education standards. There are great opportunities for non-contact businesses that aim to reduce labor costs and improve operational efficiency. However, companies should carefully consider the balance between operating costs and revenue.

The biggest reason to prevent the unmanned product shelves from deploying is the possibility of theft due to the open shelves. However, adopting a closed-stack smart product shelf such as a convenient bee requires equipment costs and technical requirements. The hurdles are high for companies that have just been founded. In many cases, smart delivery lockers and the like cost 10,000 yuan (about 150,000 yen) or more per box. It also adds the cost of building and maintaining a link between the user management system and the electronic waybill.

Large, well-financed companies will be willing to accept these costs, but the rationality of new solutions needs to be considered. For example, unmanned convenience stores can reduce labor costs, but facility / equipment costs and maintenance costs will increase significantly. In addition, the cost of introducing an IC tag (RFID) will be incurred. Considering whether it can be more profitable than a conventional convenience store, it turns out that it should not be considered very positively.

Some companies are currently trying to improve their business conditions. Toyosu announced on April 28 that it will offer a free parcel delivery service for up to 12 hours and will collect 0.5 yuan (about 7.5 yen) every 12 hours after the excess. Subsequently, on the 30th, a paid membership service will be launched, and monthly members will be charged 5 yuan (about 75 yen) per month, and seasonal members will be charged 12 yuan (about 180 yen) each season. Although there was no limit on the number of times the service could be used and the luggage storage period was set to 7 days, users expressed strong dissatisfaction.

Real unmanned is still ahead
In the "Shanghai New Economy Development Promotion Action Plan (2020-2022)" issued by the Shanghai Municipal Government on April 13, "contactless delivery" is one of the priority areas for accelerating development. According to the plan, the city of Shanghai will reorganize and reorganize its logistics resources with high efficiency, work to make operations smarter and improve its coordination capabilities, and realize an all-weather logistics service that can handle a wide range of services. It is a policy that works in favor of companies involved in non-contact delivery.

However, looking at the market as a whole again, it seems that the labor shortage will not intensify rapidly, and at present it is more economically efficient to leave the work that can be handled by "unmanned" to human resources. The future of completely "unmanned" offline businesses will not come very soon.