image credit: Bamboo Works
Key Takeaways
Fengyi Technology has filed for a Hong Kong IPO, after building China's largest smart retail cabinet network with nearly 184,000 cabinets and 2 billion yuan in annual revenue
The company's business metrics are all moving in the right direction, but its thin margins show the difficulties of wringing profits from thousands of low-sales cabinets
In office buildings, factory rest areas and campus corridors across major Chinese cities, a familiar ritual is playing out. A worker or student scans a QR code on a glass-fronted cabinet, which unlocks the door. She then opens the door, takes a bottle of tea, packet of biscuits or other drink or snack of choice, closes the door and walks away. The machine uses sensors to detect what was taken, and payment happens automatically.
Now, one of the biggest operators behind those cabinets, Shenzhen Fengyi Technology Group Co. Ltd., wants public investors to take the same "help yourself" approach with its stock. The smart cabinet operator filed for a Hong Kong IPO last week, unveiling a business that is thriving in a sector written off by many. Its menu includes some healthy growth, led by top-line revenue that rose to 2.01 billion yuan ($300 million) last year from 1.24 billion yuan in 2023. But the filing also shows why unmanned retail remains hard: Fengyi sells mostly cheap drinks and snacks, while managing a vast network of small retail points in lightly trafficked areas.
That makes the company less a hardware maker and more like a retailer whose stores happen to be tiny, unmanned and algorithm-managed. Nearly all of its revenue comes from selling goods through its cabinets, with advertising and other services still just small contributors. The company's pitch is that AI can turn a logistics-heavy retail model into a scalable network able to operate both reliably and profitably.
Rocky history
History hasn't been kind to this sector. China's original unmanned retail boom began around 2017, the same year Fengyi was founded, when venture money flooded into open shelves placed in offices and gyms. The idea was simple: put snacks close to consumers in a friendly help-yourself ...
