May 25 (NBD) -- Chinese tech titan Tencent announced that it has signed a strategic agreement with MissFresh Bianligou (Bianligou), a cashier-free shelf provider, attempting to enhance cooperation in the smart shelf solutions, image recognition and cloud service fields.

The new cooperation came after tech giant Tencent's first investment in the Beijing-based company five months ago. 

In December 2017, Bianligou raised a total of 200 million U.S. dollars and one of the financing rounds was led by Tencent.

Later in February this year, the unmanned shelf provider reached an agreement with Tencent's social app WeChat, which signals Tencent's foray into the checkout-free shelf domain.

While the sector started to cool down early this year after a boom in 2017, Bianligou is one of the players that survive after the industry reshuffle. 

As an unmanned shelf project launched by e-commerce platform MissFresh in June 2017, Bianligou has expanded its presence to 25 cities in China. 

The new cooperation will combine Bianligou's abundant offline scenarios, supply chains and user base with Tencent Cloud's service system, ability of data mining and analysis as well as artificial intelligence technology. 

Starting this month, Bianligou has been deploying across Beijing smart shelves that are supported by technology of Tencent Cloud.

It is noted that Bianligou now is making all efforts to develop smart shelves based on visual recognition. By adopting solutions including goods identification algorithm, password-free payment, consumer purchasing behavior matching, the smart shelves are expected to provide consumers with new buying experience. 

Unlike the first generation of unmanned shelves that use code scanning for identity authentication and product sales, the second-generation shelves allow consumers to open the door by facial recognition, pick out the products and pay for the items when consumers close the door.

High damage rate of products, high costs and low efficiency are three pain points for unmanned shelves. The new smart shelves may provide solutions to those problems.

The business model of unmanned shelves hasn't been proved to be feasible, but how to reduce the damage rate of goods by leveraging technology and software is the key issue that needs to be addressed at the moment, Li Chengdong, a strategic analyst of e-commerce, said to NBD.

Apart from Tencent, e-commerce giant Alibaba Group also seeks to enter the checkout-free shelf sector. In April this year, Ant Financial, the Group's financial arm, is reported to invest in the checkout-free convenience store operator Xing Bian Li (meaning New Convenience).

Email: zhanglingxiao@nbd.com.cn