Following our previous interview with Ms. Angie Zhu from Microsoft AI & IoT Insider Lab, we invited Rosie Zhang, co-founder and General Manager of Cloudpick Technology, to talk about her ideas about working with the Microsoft team.
As a critical partner of Microsoft AI & IoT Insider Lab, Cloudpick Technology recently completed a Pre-B round of financing. Cloudpick is committed to providing customers with a “grab-and-go, pay-as-you-get” shopping experience in the retail industry. In addition, the technology is also applied to other sectors and scenarios such as government, education, finance, transportation, aged services, and real estate, matching different unmanned solutions to improve industry efficiency and reduce operational costs.
The empowering case of Microsoft AI & IoT Insider Lab and Cloudpick Technology gives us a reference to think about how to solve various problems in digital transformation.
Q: Ms. Zhang, could you please introduce yourself and your company a little?
Rosie Zhang: Yes. I’m the VP of Cloudpick Technologies, mainly responsible for the company’s operations and some investment, financing, and marketing work. Our company was founded in 2017, and our part-owners are all graduates of SJTU. Some are software engineers from Alibaba, and others are algorithm engineers from foreign tech giants like Intel, Google, etc. In 2017, we got our first funding from Xu Xiaoping of ZhenFund, and we started our business in Zizhu Science Park next to SJTU.
Now, we receive financing nearly every year, including funding from groups in France and Japan. We have a lot of ecosystem partners, like Intel, Microsoft, etc., that help us introduce solutions to the world. At present, we have over 300 stores. Domestic stores account for about 60% of the total, and the rest are overseas stores. Our stores are in more than ten countries, including the United States, Japan, Singapore, and Europe.
Unmanned retailing: emerging worldwide racing
Q: What is the current situation of unmanned retail in China and abroad? What are the differences and the difficulties of doing business overseas?
Rosie Zhang: Because of the COVID-19 pandemic, we have seen many “Key Accounts(KA)” overseas with growing interest in the solution of unmanned retail, and their decision-making speed is getting faster. Our orders are trending upward significantly, and these KAs are doing very standardized retail. For example, if the best operation refinement is 100 out of 100, maybe the domestic side is rougher and can achieve a score of 70, while the foreign side is probably pursuing a score of 90 to 100. So these KAs are more interested in a more refined, digital management of their entire process.
Our customers, especially in Japan, are doing an outstanding job with their convenience stores. Still, the major problem they encounter now is that the basis of this refinement is to constantly train their staff to have the quality to run the stores as required. However, because of the social trends of aging, childlessness, and the epidemic, there is a dilemma. There is not enough staff to run the 20,000 to 30,000 24-hour convenience stores across the country, which are unsustainable and have to shut down at night.
Technology has been the only way to help people achieve continuous 24-hour operation, so we can clearly feel the demand from the developed countries overseas, which is a significant opportunity.
Domestically, you can feel the aging problem emerging, which may be the trend in the future.
The technical solutions we use in the stores at home and abroad are similar, but we focus on different directions of market expansion, more on large KAs overseas, and more on specific scenarios for domestic customers—government and enterprise parks, schools, and hospitals.
Microsoft ecosystem: How startups work with Microsoft
Q: What kind of opportunity made Cloudpick Technology decide to join Microsoft AI & IoT Insider Lab? What are their core advantages compared to their peers?
Rosie Zhang: We started our relationship with Microsoft because we wanted to go overseas, and many of our overseas customers are using the Microsoft Cloud. Therefore, it is natural to have some association with Microsoft when we provide services to them. The selection circle of Microsoft AI & IoT Insider Lab alumni is very tough, as they have their own requirements, such as your products must have unique technological strength.
One of the core technologies of our company is that we can use AIoT devices in a physical space. We put these devices on the ceiling, walls, and shelves. When people walk into the store, these AIoT devices can be linked to digitize the entire physical space with people, goods, and scenes. When customers come out, we will use algorithms to bind the people and goods and settle the payment within 5 seconds.
Technology also needs to be advanced in the industry. Our solution has a very high accuracy rate of 99.7%, and there is no requirement for the number of people entering the store. The SKU in the store can reach 2,000, 3,000, or ensuring that people and products can be connected in the same physical space with very accurate interaction. We are one of the best in China regarding accuracy and algorithms.
In foreign countries, we are also very competitive. AmazonGo may be our benchmark, but we are even doing a little better than AmazonGo in some places. For example, in terms of cost performance, one AmazonGo equals 10 to 20 of our stores based on the data released online and the feedback data of customers who have been to AmazonGo. Amazon currently has about 26 stores, but we have over 300.
We have made more innovative attempts in the implementation process, such as the interaction of sound and light. All the shelves in our stores have a screen, a contact point with our customers offline. For example, suppose a customer goes to take a product or looks at it for over three seconds. In that case, there will be some intelligent advertising on display, with a voice shopping guide and some accurate interaction.
In terms of sound and light interaction, we have a lot of cooperation with Microsoft AI & IoT Insider Lab. They would send some engineers to help us complete the intelligent voice project, which is beneficial. And Microsoft has a XiaoIce and some other voice programs that can be very useful in our scenarios.
In fact, the above-used screens are all from a supplier partner of Microsoft. As a hub, Microsoft helps us hold hands with so many partners. Therefore, these innovative things are merged and become a more practical solution.
Nowadays, one company can’t do everything end-to-end. A perfect solution must be a collection of many startups' advantages, and then we can implement it on a particular platform. To innovate together with startups, we need a platform like Microsoft, which has a big brand, influence, and attraction.
Microsoft’s products and technical capabilities are converging and empowering our innovative products, while they have various acceleration camps to give us some communication platforms between startups and entrepreneurial knowledge. They regularly hold various online and offline events and exhibitions, bringing many companies together to participate in and share a great value.
Q: What aspect of Cloudpick Technology do you believe Microsoft AI & IoT Insider Lab values the most, and why did you decide to join?
Rosie Zhang: I don’t know how Microsoft came up with this order, but I think our technicality, algorithm engine, software system and engineering capabilities are advantages, and our whole solution is based on the combination of computer vision, the deep learning, and AIoT. With this integrated technology, we can completely digitize the offline physical space. Digitization, as a general direction, is the strategic direction of Microsoft.
Second, it is true that our technology can be implemented in a specific scenario to solve a particular industry problem, not just a pure technical theory. Finding the vertical scene and the customers to help for most technology startups is the first subject to face. Understanding the industry know-how is very important for startups, which is also the source of our innovation and uniqueness. I think the excellent depth of the scenario is also a point of consideration for Microsoft.
Third, both for domestic and foreign business, Microsoft’s international support is critical for us. On the domestic side, like our AI Smart Island in Zhangjiang, Microsoft AI & IoT Insider Lab has provided us with a space to display our entire store. Many customers and leaders have seen our solutions in the showroom, which is an excellent stage to help us expand our influence and marketing.
Overseas, Microsoft is an international company that introduces us to many foreign customers, including some of our KAs, B2C retailers, integrators, etc. Besides, Microsoft also has a lot of brand resources and customers, and they are highly collaborative with our business.
Q: Microsoft Lab has a series of cooperation initiatives with Cloudpick, including hardware, software algorithms, etc. Are they charging anything?
Rosie Zhang: I think Microsoft has a big picture as an international giant. It doesn’t charge us anything, but it’s also challenging to enter its circle. We have to match not one or two, but all four points. It is like a university in the Ivy League, and you have to have some unique talents to join. But as long as you are one of them, the school will spare no effort to help you, support you to grow in the field, and then bring some real change to the industry.
Q: How do you define this “big picture”?
Rosie Zhang: I think the picture is more synergistic with Microsoft’s vision, goals, and strategies. As a journeyman’s predecessor, Microsoft is helping us accelerate our growth.
Q: What are some of the changes that have impressed you before and after the joining?
Rosie Zhang: I think there are three changes, which are in the technology, local market support, and the branding aspect. Using some tools of them, such as its Azure Cloud, IoT, Speech, engineers of Microsoft will help us improve the accuracy of our customers’ behavior recognition and customer experience through our computer vision, deep learning, and sensor fusion technologies.
We carried out some AI voice shopping guides in our stores, and Microsoft helped us with that, including the connection delay of voice conversation, which was shortened from 10 seconds down to 40 microseconds. This means whenever the customer grabs some item, direct feedback comes to make our grab-and-go experience smoother. And other outcomes have also helped us promote our products on Microsoft’s platform both at home and abroad.
In addition, we have received tremendous support for our localization work. For example, when we release a solution overseas, Microsoft would help us connect with some local partners, including some hardware resources that could be carried in our stores but were not available for a while, such as a price tag screens. We can contact directly with their management very well so that we can raise a more proper priority.
In-depth working: The investment and financing logic behind the B-side industry
Q: Now, smart retail has encountered some financing difficulties because of the pandemic, but Cloudpick has been able to get financing smoothly. What do you think about that?
Rosie Zhang: Actually, our smart retail business is scorching right now, depending on what dimension you look at it. If you look at it from the domestic perspective, those companies founded in 2017 and 2018 are not retail technology companies to me, but maybe more like traditional retailers; the ones established in 2015 and 2016 are more like O2O companies, which needed to find a windfall back then. So, they made a lot of unmanned shelves, with some higher operation requirements but a few actual technical elements. About the real unmanned retail, the retail technology company must achieve unmanned and digital intelligence through AIoT, computer vision algorithms, and more innovative technologies, which are now very hot.
There are also a lot of retail technology companies doing some store digitization, and they are recently completing many extra rounds of financing.
In the post-epidemic era, online profits are exceptionally costly. Most brands and consumer industries are now paying more attention to how these offline stores can promote their online business and how to integrate and manage their membership and customers. So this is the part where everyone is more and more aware of the importance of attracting and organizing members through stores. This is a new growing point for brands and each store, which means upgrading and transforming the real economy.
To enhance the energy of the real economy, we must do some digital upgrading and empowerment. This is very much the consensus of everyone. So this business will get better and better under pressure from online and the pandemic.
Q: You have talked a little about your experience in smart retail or unmanned retail. Can you outline it in a few levels?
Rosie Zhang: The logic of getting financing is very similar to selecting alumni for Microsoft AI & IoT Insider Lab. First, the product must have certain hard-core technology content, which could increase your productivity. This is very important.
As a startup, you must do it first in a vertical scene and keep it. For example, we have been working in retail for nearly four years. Although we also do other industry scenes, our central theme has always been in-depth retail. You can only go deeper in an industry more patiently, put your feet in your customers’ shoes, and always remember that you are a B2B company. You have to understand the industry’s many pain points. The more you do, the more you will find and the deeper your business will be.
The whole chain-store business is ample. We just started even smaller, only in convenience stores, which are more standardized and the same, so our technology can be improved slowly and then copied to another store. After that, we chased into other convenience store-liked scenes, such as chain drugstores and chain beauty shops, and then scaled out the store. You have to find a good focus point, pick some market segments first, go in-depth, and slowly grow. That is where the know-how of your technology comes. That is how your solution improved. With such a killer punch, you can expand your business range further.
In fact, investment and financing, including entrepreneurship, are also the same. The key is to make the uncertain things more certain. That is what you shall show to investors. With rounds of financing, investors will have expectations for your profits and ask you to explore. As more money comes, you can do more things. It is such a slow “rolling” and “trying” loop.
Of course, you have to find some friends in the investment and financing process, such as Microsoft, Intel, and Nvidia. As you slowly get better and better, you will attract a lot of excellent platforms willing to help you, and they will serve as your business amplifier.
There will be a lot of challenges, just like the delivery delay because of the pandemic. But these are just bumps in our growth, and all can be overcome.
Q: Can you tell us about the plans for Cloudpick Technology? What is your next direction?
Rosie Zhang: The long-term direction is what we just talked about, and we may involve different industries later. Our company has a five-year and a ten-year vision to make all ten major industries happy. Our vision is still to reshape life with technology, but we know it cannot be accomplished in one effort.
So now, we are still focusing on retail, and we are improving our front-end data and the entire set of stores in terms of delivery and serving and making our front-end solution better in multiple dimensions. We have many SaaS services for store management, a combination of hardware and software. Store managers can use their APPs to control. Store operators can also check various daily reports and analysis tables and make real-time adjustments based on market needs. Besides, we will do some international expansion and localization of services.
This year, we want to focus on expanding our overseas business because we find the demand is very urgent. We just got investment from Japanese investors this year, Epson and Uzabase. Uzabase is one of the largest Japanese media, which can help us do some significant publicity. They are very interested in the sound and light solution inside our store, and we think it is an excellent media carrier to release our potential.
Q: Can you give some advice to managers of SMEs who are about to undergo digital transformation?
Rosie Zhang: The COVID-19 pandemic has probably made people more conservative. So the more practical advice is to pay attention to the cash flow and put the money to good use. But we should continue making the core investments in R&D, marketing, and product. I hope everyone will get over the epidemic, accomplish their goals, and receive more financing successfully.
Finally, I would like to take the words of Steve Jobs in the autobiography to express my feelings, “Years passed, kids came, good times, hard times, but never bad times. The journey is the reward.”
Words in The End
As the guest said in the interview, “Microsoft AI & IoT Insider Lab has seen more alumni grow, develop, and become successful, which is also the success of Microsoft. I hope we can hold our hands to win together.”
Indeed, in the era of the global economic downturn, Microsoft has implemented its philosophy of being an industry leader and actively releasing its energy to support the growth of small and medium-sized startups. Meanwhile, Cloudpick Technology’s dedication to hard-core technology, confidence in its own business, and the spirit of in-depth working as a practitioner in unmanned retail are precious too.
For enterprises, no matter how large or small, the road of growth and transformation is not a straight path. On this road, we believe many companies like Cloudpick Technology are fighting hard amid many challenges; we will also see the orderly transformation of traditional enterprises in the digital era and the active support from technology giants like Microsoft. We hope to bring you an in-depth interview from multiple perspectives in this series to focus on and promote the implementation and development of the global digital economy.
