News & Views

KFC / Smile To Pay

by Contagious Team

This story originally appeared on Contagious I/O, our intelligence tool featuring the most creative and effective ideas in marketing from around the world

A KFC in China is trialling facial recognition technology that lets customers pay with a smile.

The system has been installed in the KPRO concept store in Hangzhou, eastern China. Yum China Holdings, which owns KFC in the country, set up the store to experiment with new ways to attract younger customers, who are tech savvy and health conscious.

As well as facial recognition technology, the KPRO store features digital kiosks instead of counters, table service, and a menu that includes seasonal produce, made-to-order salads and even craft beer.

The facial recognition payment system works using Alipay’s Smile To Pay technology which, in turn, licences a technology called Face++ from a startup called Megvii. The KPRO face scanner takes just two seconds to recognise a customer’s face and then asks them to enter their mobile number, in order to verify their identity and deduct payment through their Alipay account.

‘Elevating the customer experience through new design, flavors and technologies has always been central to our approach at KFC in China,’ said Johnson Huang, a general manager at KFC.

‘We are excited to partner with Alipay to bring the world’s first commercial application of the facial recognition payment solution to our customers. With the adoption of the facial recognition payment solution, KPRO customers can experience this ground-breaking technology while enjoying fresh and tasty meals prepared in our open kitchen.’

Alipay is an affiliate of Alibaba, which is also an investor in Yum China.

Contagious Insight /

Facial recognition /
Contagious wrote about the Smile To Pay technology in 2015, when it was unveiled by Alibaba founder Jack Ma during his talk at the CeBit conference. Later that year, Alipay’s VP at the time, Jason Lu, said during a Mobile World Congress event that bio-metric scanning would make passwords obsolete within three years.

Today, that prediction looks bullish in the extreme. But with KFC’s KPRO restaurant we at least have an example of a brand (beyond Alibaba itself) putting the facial recognition payment technology to use.

This is not KFC China’s first flirtation with facial recognition technology. The fast-food chain partnered with Baidu in Beijing to pilot a kiosk that scanned customers’ faces and then suggested what food they order.

Take the Beijing and Hangzhou trails together and you can see the beginnings of a seamless customer experience – and one that requires few or no staff.

Future of retail /
More retailers are experimenting with cashier-free stores, including Alibaba, which has opened one in Hangzhou that uses the company’s Taobao app as the means of entry for customers, as well as for automatic payment.

The widespread adoption of mobile as a method of payment in China (the market was worth around $5.5 trillion in 2016, compared with $112 billion in the US) explains why the country is such a hotbed of innovation in this area.

Yum China, which also owns KFC in the region, has the largest share of the country’s fast food market (it was 30% in 2015) but innovation is still vital to stay ahead of changing tastes. A 2016 survey (of more than 10,000 people from 44 Chinese cities) by McKinsey & Company showed that, between 2012 and 2015, the number of people who ate Western fast food fell from 67% to 51%.