Beijing’s First Unstaffed Coffee Shop Open for Business But Faces Several Challenges

An unstaffed coffee shop named Youhuan Bar (lit. Friends Bar) opened at the University of International Business and Economics. A reporter from Beijing Business Today (BBT) happened upon the coffee shop on the first floor of a building not far from the fields. The shop is about 10 square meters in area, and is equipped with two self-serve coffee machines, a snack vending machine, as well as a few tables and chairs, green plants, and books and so on. The shop is owned and operated by a Beijing based tech company primarily focused on the manufacturing of coffee machines. The company is taking a shot at offline retail by opening this unstaffed coffee shop. Upon interviewing the company, the Beijing Business Daily reporter learned that the company’s new retail planning is not only unclear, but is also facing several problems including unstable equipment, lack of store management standards and other operational challenges.

The First Unstaffed Coffee Shop

The unstaffed coffee shop is officially open for business on September 1^st this year at the University of International Business and Economics. A BBT reporter visited the shop and found that the shop isn’t big in size (about 10 square meters), and has two self-serve coffee machines. Customers can order according to their preferences from the panel selection menu of over 20 different drinks such as lattes, American0, tea, hot cocoa, etc. Consumers are also able customize their drinks according to their preferences such as setting the amount of sugar, the temperature, and then pay for their drinks using WeChat or Alipay at a price between 9.9-15.9 yuan. Once payment is complete, one can see the mechanical arms in the machine in motion and making the drinks. The whole process is easy and takes but a few minutes. No staff assistance is truly necessary.

In addition to the two coffee machines, there is also a vending machine that sells various snacks and fruits like Orion snack cakes, apples, grapes and so on. Apples cost about 8 yuan for two and grapes cost about 15 yuan for a small box. Furthermore, the coffee shop is also equipped with tables and chairs, books, green plants, etc., all for customers to use freely.

The reporter at scene witnessed a large number of students in line for the shop, many times the line even extended outside of the shop. Some students have expressed that they found the concept of unstaffed coffee shops to be very interesting thus they wanted to try it. But because of limited spaces, very few remain within the shop for a cup of coffee.

A representative from Youyin Bar told the reporter that the cost of a coffee machine is between 30,000 and 9 million yuan. And to build a 10-square-meter coffee shop such as this one costs about 10,000 yuan. The coffee machines need to be resupplied about once every 3 days or so.

New Retail or just a Gimmick?

Due to various problems such as technical difficulties and high management costs, unstaffed coffee shops has not yet been massively duplicated. However, it’s must be noted that although both are unstaffed, unstaffed coffee shops isn’t on part with unstaffed convenience stores technology-wise.

The BBT reporter reported that the shop is constructed using wooden frames and glass, and generally takes about 1-2 days for the whole establishment to finish construction. The two glass doors are fully open, and there are no monitoring equipment of any sort or any anti-theft security systems. Although the most valuable assets throughout the shop are the coffee machines themselves, there isn’t much concern over them being stolen. What’s more challenging to manage and avoid is the tables and chairs being damaged and the environment being unhygienic due to the lack of monitoring and management. The general manager of the operating company, Mr. Zhang said that the purpose of having unstaffed coffee shops is to provide consumers with a simple place for R&R and a different experience with using a coffee machine compared to the past. The building cost is also within an affordable range. Thus, it is unnecessary to compare the loss of losing a few magazines or furniture damage to the potential profit from the increase in sales.

Overall, unstaffed coffee shops are more like an establishment designed specifically for using self-serves. According to the representative from the coffee shop, this unstaffed establishment was a cooperation between the company and the university, part of the latter’s welcoming activities for new students, and will be removed shortly after a week. Fudan University’s rivaling unstaffed coffee shop is also due to open in September. GM Zhang also told the BBT reporter that the company will open up additional unstaffed coffee shops according to market feedback and permits from colleges, universities, and business districts. However, there are no specific plans in motion yet and the company is still facing technical constraints. The BBT reporter has also noted that because the machines are still facing technical difficulties and very unstable, technicians have to be on scene constantly for maintenance.

Operational Stability Remains under Testing

Although the coffee machines have been upgraded, the general consumption environment is still not on par with market standards; In fact, it is quite simple and lacking in many aspects. The BBT reporter expressed that it felt crowded to be in such a narrow space with no air conditioning or any temperature regulating equipment on site. For the weather in early September in Beijing, it gets rather hot to be in such a cramped coffee shop. Furthermore, one is yet to see how the shop will hold against violent weather conditions such as thunder and heavy rain.

Niu Haipeng, a professor from the Marketing Department at Renmin University of China pointed out that the current consumer demand for coffee is divided into two categories: those who are in pursuit of convenience and all about the purchase and those who are all about working and staying in the shop experiencing the whole social environment. It is hard to compare the taste between machine-made coffee and man-made ones. But on the front of environmental comfort, a simplistic arrangement of tables and chairs wouldn’t really attract much attention those who are in pursuit of the whole coffee shop environment. And to the on the go buyers, tables and chairs are even more unnecessary and insignificant.

Lai Yang, the Secretary-General of Beijing Business Economics Association believes that with the continuous decline in automation technology operation costs, the widespread of such technology is becoming the new trend. Unstaffed coffee shops reduces labour and rental costs, and provides a good amount of space for consumers to come in for a cup of coffee and chat and rest freely. As long as prices are relatively reasonable, it wouldn’t bring about problems of equipment damage and hygiene management. There is still a good chance for unstaffed coffee shops to survive and continue operating.

This article originally appeared in Beijing Business Today and was translated by Pandaily.

Click here to read the original Chinese article.