(Yicai) Sept. 15 -- Cloudpick Technology, a Chinese developer of unmanned store solutions, has survived the bursting of the bubble in the staffless retail sector by pairing technological innovation with unmet market demand and has emerged stronger as a result, according to its founder and CEO Jeff Feng, who pivoted the company away from consumer-facing retail stores to focus on providing solutions to retailers.

"Many early 'staffless' pilots relied on self-scan or QR codes and basic radio-frequency identification systems," Feng told Yicai in a recent interview. “In live operations, their transaction effectiveness was severely limited due to missed scans and inventory shrinkage, which ultimately prompted the industry's shift toward AI-powered computer vision and spatiotemporal perception technologies.”

A report by Dongwu Securities showed that RFID technology faced significant compatibility issues with metal containers, liquids, and aluminum-lined packaging, while QR code systems delivered cumbersome shopping experiences that provided minimal advantages over traditional retail formats. Additionally, RFID tag costs—estimated at 0.5 yuan per unit—posed a substantial financial burden for low-margin convenience stores.

Cloudpick uses artificial intelligence-powered spatiotemporal computing technology, which employs three-dimensional sensors to reconstruct physical retail spaces in real time, track customer movements, analyse behavioural patterns, and recognize product categories with 99.9 percent accuracy, Feng said.

Thanks to China’s manufacturing and supply chain advantages, Cloudpick’s deployment costs are only one-quarter to one-fifth those of competing solutions, Feng added.

Cloudpick also avoids fiercely competitive mainstream retail environments and focuses instead on “corners and edges,” or niche spaces (ROI Challenged site such as office building lobbies, hospital cafeterias, school campuses, and transport hubs, where staffed retail outlets struggle to turn a profit due to high costs, Feng pointed out. Unmanned technology makes these market niches commercially viable.

Overseas alone, there are more than 100,000 potential sites suitable for unmanned retail, which offers new business opportunities for retailers, according to Feng.

Another important move was Cloudpick’s decision in 2020 to close its self-operated stores and switch to providing unmanned retail solutions as a service to third parties, Feng said, adding that this eliminated huge capital outlays and enabled the Shanghai-based firm to become a lighter operator and expand faster globally.

Overseas Expansion

Cloudpick's AI solutions were being used in more than 2,000 stores across more than 30 countries at the end of last year, with transaction volume exceeding CNY200 million (USD28 million) and overseas sales accounting for roughly half of the company’s business.

According to company disclosures, Cloudpick has successfully piloted and deployed solutions with leading Asian convenience chains including 7-Eleven, Lawson, and FamilyMart. This growth trajectory aligns with broader industry forecasts, as leading analysts expect AI-powered robotics and automation to drive the next wave of retail operations.

Its international success stems from labor shortages. Cloudpick has done particularly well in Japan and Singapore, Feng noted.

Singapore prefers to bring in highly skilled talent, leaving it short on basic workers and prompting government agencies there to actively promote retail automation. That has created fertile ground for Cloudpick's growth. In Japan, labor costs in major cities such as Tokyo and Osaka are high and rural areas face acute staffing shortages, prompting retailers to widely adopt unmanned store technologies.

"We’ve already gained a foothold in European countries, including Spain, Italy, France, Germany, Hungary, and Romania," Feng said. "Next, we're prioritizing North America and the Middle East, though progress in those regions has been somewhat slower.”

When asked whether unmanned retail will take jobs from ordinary people, Feng recalled working in a convenience store early in life. “That work was brutal -- harder than doing a PhD,” he said, adding that unmanned retail solves jobs that “people don’t want to do.”

Labor shortages in most Chinese cities have not yet reached a “pain point,” and cost increases have been relatively gradual. Early solutions, priced in the hundreds of thousands of Chinese yuan, equal to tens of thousands of US dollars, mainly served top-tier cities for branding purposes.

The diversity of overseas markets also brings its challenges. While the core technology requires minimal tweaks, payment ecosystems vary widely by country. “In China, we just integrate with WeChat and Alipay, but abroad, we have to adapt to each nation's dominant digital wallets," Feng pointed out.

Pushing Boundaries

Cloudpick is now extending its unmanned retail technologies into warehousing and has already secured multiple overseas orders for staff-free warehouses this year, Feng said.

But unlike retail, warehousing needs are more complex, involving non-standard processes, enterprise resource planning integration, and batch management, calling for customized solutions. "We still aim for standardized delivery, pre-installed equipment, and quick tuning," he explained.

Looking ahead, Feng has bolder ambitions. "We want to scale down the technology to supermarket carts and baskets for automatic recognition and checkout," he said. “It's entirely feasible. It’s just a matter of resources.”

He is also bullish on pairing AI and robotics, such as mounting a robotic arm on the chassis of automated guided vehicles for retail or warehouse automation. “The costs aren't prohibitive and coupled with large model algorithms, this will have a huge industry impact,” he said.

Editor: Futura Costaglione