Can Hong Kong Keep Up with the Self-Service Trends?

By Angelynn Yang and Kelly Chiu

A month ago, Hong Kong opened one of the first unstaffed store, a Japanese confectionary store “Okashi Land”. The self-service outlet was an experimental store lasting for 20 days in Gala Place, Mong Kok from September 5.

The shop adopted technologies created by EasyGo, a Guangzhou-based start-up operating over 100 unmanned convenient stores in mainland China.

To enter the unstaffed Okashi Land, scanning of a QR code with WeChat is required while the door will reopen after a payment has been done. Payments were made by means of radio-frequency identification (RFID) and its patent intellectual sensor. WeChat Pay was the only accepted payment method.

As the pioneer in introducing the high-tech unmanned store into Hong Kong, the founder of EasyGo Lin Lechang suggested that Hong Kong act as a gateway to expand its services to other SouthEast Asian countries. “As a start-up based in southern China, we want to leverage our advantages of being close to Hong Kong, Macau and Taiwan and seek cooperation with brands from these regions”, said Wang Fele, co-founder of EasyGo in an interview with the SCMP.

Before 2018, most people are familiar with self-checking out books in the public libraries, giving them much more flexibility in borrowing out books. But this year, AS Watson Group, owner of ParknShop and Watsons, has launched up to 500 self-checkout machines across Hong Kong to speed up customers’ shopping experience.

Although late on the self-service trends, their self-checkout machines are available both in English and Chinese along with various payment choices such as VISA, MasterCard, Pay wave, Hong Kong’s Octopus card as well as the trending Chinese mobile payment, Alipay.

With tens of millions of tourists visiting Hong Kong each year, these self-checkout machines help Hong Kong better accommodate them especially mainland visitors, accounting for almost 80% of tourists. The number is expected to rise with the launch of projects linking the city to mainland China this year.

The service sector dominates the Hong Kong economy. According to Hong Kong Trade Development Council (HKTDC), Hong Kong is the world’s most services-oriented economy, with service sectors accounting for more than 90% of GDP, while the World Trade Organization (WTO) recognized Hong Kong as the world’s 15th largest exporter of commercial services in 2017.

Hong Kong started to transform from an industrial-based economy into a service-based economy to create job opportunities in the 1980s, of which were created for middle-aged and/or unskilled or poorly skilled workers affected by the contraction of the manufacturing sector.

As the government started to recognize the future possibilities of the service sector on Hong Kong’s economy, a series of public service advertisements were propagating the “proper” way of treating customers. Below is a popular ad in 2002, featuring famous actor Andy Lau to raise standards of the service industry in Hong Kong.

This time, today’s attitude in attending to customers; Minibus/Taxi (Andy Lau) 2002

With Hong Kong’s history as a service-based economy, it is still debatable whether self-service checkouts can completely replace cashiers offering services.

As a spokeswoman at ParknShop and Watsons in Hong Kong stressed that the self-checkout machines are “reducing the workload of frontline staff and improving their efficiency” so recruiting of staff are still being carried out every day, as reported by the SCMP.

From the same article, an interview with the Retail, Commerce and Clothing Industries General Union raises concerns that the new system would affect employment opportunities of frontline cashiers in the following year when customers get familiar with the machines.

Shoplifting is another concern in the increase usage of self-checkout machines. Replacing high priced item bar codes with lower priced items might be some of the crime cases, easier to steal without close monitor by employees. There was a 270 per cent increase in shoplifting among elderly people in Hong Kong, a study by the Post reported by the SCMP has found, while the ageing trend of an increase by 62.4 per cent do not catch up.

Possible solutions have been applied to address this problem. In the case of Okashi Land’s experimental unmanned shop, CCTV were installed in stores to avoid shoplifting. Also, RFID technology has ensured the information of the products selected by the customers will be logged into the data base and linked to WeChat for payments, while AI facial recognition technology was also applied by EasyGo to avoid crimes.

However, such high technology comes with a price. The cost can be significant. The Co-founder of EasyGo Wang Mumu suggested the average cost of RFID technology is reasonable only when the products sold at the unmanned shops are high-priced imported goods.