Deals | 7-Eleven of new retail era? Unmanned convenience store Xiaomaipu receives 1 million yuan investment

Convenience store is no doubt one of the buzzwords for the Chinese venture investment sector in 2017.

Writer: Zong Di

Xiaomai Convenience Store, one of the players in the field, has recently changed its name to the catchier “Xiaomaipu” and launched the 4.0 version of its convenience store solution.

Additionally, as the most favored unmanned convenience store start-up among investors, Xiaomaipu raised another 100 million-plus yuan in a Pre-A-plus financing round from Junzi Capital, bringing the total investment it received in two months to approximately 300 million yuan.

It’s learnt that the 4.0 version Xiaomaipu is about 20 square meters in size and carries more than 600 SKUs. The facility takes only four hours to install and can be put into service within a day, whether inside or outside buildings. It is movable, scalable and cashier free, enabled by technologies such as facial recognition and mobile payment.

Unlike its competitors, Xiaomaipu stresses both hardware performance and customer experience. Each of its stores is overseen by a keeper, whose job is improving customer experience, restocking as well as guarding against theft.

According to the information Kr-Asia.com has obtained, Xiaomaipu introduced three main changes to its 4.0 convenience store.

First, the solution is standardized and easier to scale up.

The facility is broken down into basic units and can be assembled like Lego bricks, making the stores easier to move and install. A design like this is reminiscent of IKEA and aims to ensure consistency in the quality of deliverables, reduce installation time, from 35 days to less than four hours, and facilitate expansion.

Specifically, the 4.0 version Xiaomaipu has five basic modules, including the standard merchandise section, fresh food section and equipment (such as coffee maker, heating oven and refrigerator). On top of the basic modules, additional units (for example, laundry section) can be customized to cater to varying needs in different communities, said Quan Bin, Vice President of Xiaomaipu.

Second, the new version of Xiaomaipu convenience store offers a significant proportion of non-standard merchandise.

Non-standard items, primarily fresh food, have long been the largest profit contributor for convenience stores (7-Eleven being the prime example). According to Quan, Xiaomaipu has acquired a controlling stake in a fresh food factory and established an R&D team dedicated to updating the stores’ fresh food offerings. The company expects to bring the proportion of its fresh food SKUs to more than 50% in the future.

Third, Xiaomaipu has enhanced cooperation with technology firms. Xiaomai Commune teamed up with the facial recognition firm Face++ to enable features like member recognition and membership service activation as well as improve its routine operation, security level and loss control.

Take routine operation for example. The new stores are able to collect and process information such as consumers’ gender, age and lingering time to optimize product mix in different regions and assist the changing and replacing of SKUs.

Xiaomaipu’s short-term focus will be on the regional market in Beijing, with the goal of expanding its presence to a level where there is one Xiaomaipu store for every 300 people. It’s expected that Xiaomaipu stores will be found in approximately 1,000 residential communities in Beijing by the end of the year.

Xiaomaipu has started recruiting franchisees. The company will let the franchisees collect most of the profit at the beginning. In fact, the money raised in the latest funding round will be used for not only product mix development, supply chain establishment and operating system upgrade, but also market expansion and the building of a franchise system.

Xiaomaipu’s core team is made up of people with backgrounds in internet business (O2O and e-commerce), retailing (traditional convenience stores), logistics and real estate, and its technological team consists mainly of people who had previously worked at Baidu, Alibaba or Tencent. The company’s offline operation is overseen by people from major convenience store brands like 7-Eleven and Family Mart. Xiaomai Commune, founded by Liu Zexuan, who is also the CEO of the company, was once the largest campus-based O2O courier service in China.