Kiosk Market Fuels Investment Opportunities in China

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Category: Business in Asia, Economy & Trade, Regulations
Kiosk Market Fuels Investment Opportunities in China

The kiosk industry in China is one of the world’s largest producers of self-checkout systems with many investment opportunities open to domestic and foreign investors. And like all industries, there are various aspects to consider before investing in the kiosk market. Factors such as industry demand, professional assistance, and related preferential policies are major aspects of potential business openings in this area. The kiosk market is especially attractive to investors who want to profit from small business setups.

Take a look at our previous article about how Small Businesses Benefit from Reduced Tax Rates

Enterprises engaged in the manufacturing of self-service machinery come in the form of banking kiosks, vending kiosks, ticketing, patient-interactive, casino, and information for use in different industries such as banking and financial services, healthcare, retail, hospitality, transportation, etc. As such, the kiosk industry offers a viable option for business set up in China amid the growing demand of its market.

Kiosk-related policies in China

Cash collection and payment

Announcement No. 18 of the People’s Bank of China on regulating RMB cash collections and payments mentions the main specification of cash receipt and payment services involving self-service machine manufacturers and their role in the circulation of RMB in the form of cash.

According to the regulation, manufacturers of self-service vending machines and self-service ticket selling machines, and other machine and service providers must consider the demand for cash collection and payment upon developing and providing machines and services. The reason behind this is to provide a variety of payment options and tools that are still compatible with cash payment and the payment of cash cannot be entirely excluded from self-checkout machinery. Further, the PBoC encourages active cooperation among manufacturers and service providers of self-service machinery and tools to promote the use of cash and thus, optimize the cash flow environment of the economy.

Accelerating the development of new types of consumption driven by new business forms and patterns

In September 2020, China’s State Council released Order No. 32 concerning the development of new types of consumption. The order emphasizes the promotion of the construction and sharing of smart terminals such as express delivery service stations, smart express mailboxes, vending machines, and smart waste sorting machines.

On improving the network of commercial circulation infrastructure, the general office of the State Council confirmed the establishment and improvement of the digital commodity circulation system, speed up the layout of digital consumption networks especially in emerging cities, key townships, and the central and western regions, and reduce the comprehensive cost of logistics. Moreover, the government will also make further improvements in the level of e-commerce for rural areas.

Demand for different types of kiosk

Self-service machines (i.e. ATM)

One of the key drivers for the market of self-service machines and kiosks is the growing demand for ATMs (Automated Teller Machines). Consumers in China have an increasing preference for interactive and touch screen ATMs.

Recent years have seen a considerable growth of the global ATM market, in connection with an increase in bank system and automated bank branches’ penetration in developing nations. Moreover, advanced feature ATMs, rising per capita income, and convenient and time-saving ATMs have all contributed to this global demand. Among countries in the report, China has accounted for the largest share in the global ATM market (2017) because the country prefers cashless transactions. Mobile payments do not necessarily hamper the growth of ATM kiosks but rather promote it. Some users see mobile payment as an easy and convenient way to spend cash so some prefer to withdraw cash and deposit them back when there is a need for additional cash.

ATM technological advancements preferred by all consumers

  • Capability for the visually impaired
  • the central bank’s PBOC 2.0 standard chip card readers,
  • and interactive and touch screen features

Standard tourism kiosk

Standard tourism kiosks allow businesses to expand their reach without the added expense of hiring more staff or facilities. Businesses can streamline various tourism-related functions and provide relief to their customers including:

  • Easy check-in processes,
  • Reduced long queues at transport terminals,
  • Provision of maximum capacity assistance and information to tourists and locals alike.

Interactive kiosks can serve as an alternative to giving out printed leaflets and maps, and even allowing for a multilanguage interface that abolishes language barriers to cater to different nationalities. Digital kiosks, as they function in the tourism industry provides stand-out features such as:

  • marketing tools that provide up-to-date information at all times;
  • information on city maps, tourist attractions, public transportation, and contracts;
  • information about different hotels, services, spas, etc.;
  • interactive digital experiences;
  • ticket purchasing (e.g. trains, tourist buses, boats, etc.);
  • wireless hotspot for hotels; and
  • check-in and check-out at hotels;

Amid all the restrictions the world has come to face due to COVID-19, the tourism industry needs to anticipate the surge in tourism when the time comes. As most countries ramp up the administration of vaccines, it is hoped that cross-border as well as domestic tourism will normalize as they used to. After months of quarantine and travel restrictions, long-awaited vacations and travel for leisure will be seen in the future.

Food and drinks vending kiosks

Vending kiosks solve problems of space constraint. These flexible self-service machines compete against existing SMEs that sell food and beverages like convenience stores. Not only are vending kiosks more accessible these days in China, but they also accept payments via smartphones as well as cash. Moreover, these machines also aid in tracking:

  • Food and beverage inventory
  • Global consumption
  • Nutrition labeling
  • Unit production
  • Gross margin
  • Revenue

Other leading-edge kiosk types

Kiosks of all shapes and sizes and for many industries exist to cater to the different needs of consumers in China.

Marketing kiosk

Marketing kiosks, much like some tourism kiosks, boost marketing strategies of companies as well as provide branding and lead generation.  Not to mention, kiosks are of great use for product campaigns, surveys, and product information.

Utility kiosk

Utility kiosks, Further, Healthcare kiosks are used to manage “track and trend” in hospitals and healthcare centers. Patients may check-in for their appointments or schedule their next ones or use it as a directory to help navigate within the medical facility. Benefits to the business may include:

  • Reduction to administrative and overhead costs
  • Decreased patients’ wait time
  • Innovative data storage solution
Personal health stations and educational kiosks

“Personal Health Stations” are self-service, self-monitoring kiosks that allow patients to check and chart their blood pressure, BMIs, and weight. Health clubs and companies employ these kiosks to increase health awareness and information among their people. And lastly, Educational Kiosks are used in a campus setting. These kiosks are used to register for classes, track payments, order school books, and more.

Conclusion

Investment opportunities are booming in China in terms of the kiosk market. Several industries like tourism, education, and finance rely upon kiosk producers and manufacturers to streamline the services they provide. Investors may be mindful of the different policies that the Chinese government issues regarding the industry because these policies regulate and protect the industry.

Contact us

S.J. Grand provides advisory on setting up a business in China. We put our competent team at your service to give you the most effective China market entry, due diligence, and tax optimization strategy for foreign-invested enterprises.  Contact us to get you started.

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