Alibaba's self-service Tao Cafe takes e-shopping offline

HANGZHOU — There was a long queue in front of a cashier-less cafe opened by Chinese e-commerce giant Alibaba over the weekend, as shoppers waited to experience firsthand the company's new brick and mortar store.

Entry into Tao Cafe in Hangzhou, capital of east China's Zhejiang province, is through ticket gates similar to those at subway stations, however, customers scan their smart phones instead of tickets.

The 200-square-meter store offering beverages, fast food and snacks can accommodate 50 customers at a time. To enter and make a purchase, shoppers require only a smart phone with Alibaba's Taobao e-commerce app.

The store's e-shopping system developer is Ant Finance, a subsidiary of Alibaba. It has assigned assistants to help customers familiarize with how Tao Cafe works.

A woman surnamed Shao said she enjoyed the experience of buying a cup of coffee in the store.

"Your profile picture is shown on the screen after you place an order. It also shows the wait time. There is no hassle of waiting for your name to be called like in ordinary cafes," she said.

A tourist from South China's Shenzhen said assistants told him to slowly pick up goods from the shelf so the system has time to confirm his selection.

"We need to learn. It is a whole new shopping experience, this cashier-free store," said the man surnamed Wu. As he walked out of the cafe, his bill was automatically paid via the e-payment account on his smart phone.

Zeng Xiaodong, senior technical advisor at Ant Finance, said the cashier-free cafe combines automated visual sensors and facial recognition to reduce error rates.

He said all goods in the cafe are digitalized. Each commodity, its placement on the shelf and its purchase are subject to digital recognition.

"This store is our endeavor to explore new modes of brick and mortar retail combined with e-commerce," said Zhang Yong, Alibaba CEO.

The system has been tested by technicians pretending to steal commodities by placing them into trouser pockets or bags. The checkout machines recognized the selection of the products and processed the charge via e-payment.

Smart shopping has attracted attention after an unmanned 24-hour BingoBox convenience store opened in Shanghai in June. Customers must register in advance using WeChat, China's leading social media app, or Alibaba's mobile wallet app, Alipay, then scan a QR code to enter the 10-square-meter store.

The goods available in the store are around 20 to 30 percent cheaper than those in other convenience stores. Once customers have completed their purchase they scan another QR code to exit the store.

The company has raised $15 million in funding to expand its business. It said that only four staff members are needed to run around 40 stores.

The development of smart shopping has benefitted from the fast expansion of e-payment technology. China's banking institutions handled more than 25.7 billion mobile payments last year with a transaction volume of 157.55 trillion yuan ($23 trillion), according to a report by the People's Bank of China, the central bank.