Deals | DeepBlue Technology Raises Hundreds of Millions of RMB to Build China’s AmazonGo

Scan your palm, open the gate, take and go.

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Deals | DeepBlue Technology Raises Hundreds of Millions of RMB to Build China’s AmazonGo

Kr-Asia is all about actionable insights for entrepreneurs. And through this post, you’re about to find out:

1. What opportunities do technologies of cashier-less shopping bring to different retail businesses?

2. How to build an AmazonGo that suits the local market?


DeepBlue Technology (深兰科技) announces that it has closed a Series A round financing worth hundreds of millions of yuan, which is led by Meridian Capital and followed by Desun Investment. According to the company, the fund will be used in R&D and marketing covering fields like retail upgrades, autonomous car, and intelligent robot, as well as team expansion and AI-based eco-system building.

Founded in 2014, DeepBlue rolled out its first self-service store in 2015, the intelligent retail system quiXmart in 2016, the check-out system TakeGo (co-developed with Ant Financial) in February 2017, an AI-powered vending machine in June 2017, and the office self-service store Xiaolan in early 2018.

As a To B technology provider, the company offers a series of self-service retail solutions involving technology and algorithm, software and hardware, which are mainly applied in following scenarios:

  • Upgrade of existing convenience stores
  • AI vending machine
  • Self-service shelves
  • Freezer

Upgrade of existing convenience stores: quiXmart intelligent retail system/TakeGo check-out system

Image credit to DeepBlue Technology.

Same as AmazonGo, DeepBlue has three core technologies: computer vision, deep learning and biometrics, which have been applied in quiXmart and TakeGo. The former is for self-service and the latter is for take-and-go.

With quiXmart and TakeGo, purchases can be simplified to two steps. First is registration. Users shall upload their palm print and agree on escrow agreement from Alipay. Second is purchase. Registered users can enter convenience stores by scanning palm, which is used for ID recognition in that palm print contains a large amount of data, and leave after purchase, with payment realized by Alipay. Thanks to that, convenience stores can improve their rate of survival.

In contrary to companies that aim at building new convenience stores, DeepBlue pays more attention to upgrading the existing ones. As the founder Chen Haibo said, “we are skeptical of there being a real need for self-service convenience stores.”

Vending machine: AI vending machine

Image credit to DeepBlue Technology.

The logic of upgrading existing products applies to AI vending machines as well

Chen Haibo said that AI vending machines were more intelligent and efficient than the existing ones due to the combination of quiXmart and TakeGo. It enables convenient purchases with three steps: open the gate by palm-scanning; select product; close the gate to check out.

Beneficiaries are not limited to customers; investors can also taste the sweetness of shortened payback period from six years to one. But this has put a challenge on developers for they have to improve per customer transaction volume and consumption frequency. The former requires the offering of more fresh food like yoghurt based on accurate recognition of products in various shapes and the latter requires convenience, which can be solved by DeepBlue’s TakeGo.

In-office self-service shelf “Xiaolan”

Image credit to DeepBlue Technology.

The in-office self-service shelf has witnessed a short-time flourish with 30 uprising startups in 2 months, while a high rate of damaged products seems to be clouding the industry.

In order to survive, Xiaolan develops refrigerator, shelf and cabinet to address the problem. The company reportedly received over 10,000 orders for Xiaolan refrigerator within the first week of its launch. DeepBlue said their next focus was on the combination of TakeGo and vending machine.

New growth in the convenience store market: Super Dalan double-door freezer

Image credit to DeepBlue Technology.

The freezers are scalable, allowing convenience store operators to explore more growth opportunities.

Hundreds of Dalan have been sold out to 30—40 business customers, which include Wahaha, China’s food and beverage industrial leader, Yili, a dairy company, and Laiyifen, a snack seller, allowing the company to gather hundreds of thousands of customer data entries.

Chen Haibo said he has outlined three priorities of DeepBlue Technology in 2018: upgrade self-service shelf; upgrade the vending machine industry; achieve mobility of retail.

 

Writer: Janine