China’s retail industry has seen some innovation this year as BingoBox deploys its unmanned convenience stores in major cities in China. However, two of its stores which were opened in partnership with Auchan and RT-Mart in Shanghai were closed down last month as the cooperation deals ended, local media is reporting.

National Business Daily revealed that one of the closed stores was earlier under investigation by the local inspectors from the city’s urban management and law enforcement department. Even though the shut down might not have a direct correlation with local regulations, Chen Zilin, CEO and founder of BingBox, told local media that the company faces hurdles from local regulations: regulations which don’t necessarily look at the locations of such unmanned convenience stores and meet the best interest of the company.

“We are making efforts to communicate with local governments in the hope of rolling out more cooperation and receiving a legal ‘identity’ to open stores,” Chen told local media.

BingoBox’s stores are designed to be flexible in terms of site selection, where the company can remove a store and reassemble it somewhere else. Currently, the stores can only be placed in the designated commercial areas based on local regulations, while the stores may see better revenue if deployed in residential areas. The startup mostly places stores in mid-to-high end communities for the time being by paying rental fees to real estate management agencies.


 

Watch: Video: We tested one of China’s unmanned stores and this is what we found


 

BingoBox is a 24-hour self-service convenience store, which is also developing its own AI tech “Fan AI” to enhance user experience. With a simple smartphone scan, customers are able to enter the store, pick the goods, and pass through check-out with RFID. Since launching last year, the startup has opened 158 stores across China, including in major cities like Shanghai, Shenzhen, Beijing, and will soon expand to Ordos in Inner Mongolia.