TOKYO -- When Chinese tech companies started rushing to open unmanned convenience stores a couple of years ago, some seasoned bricks-and-mortar players said the trend would soon hit a dead end. They were right: Across China, shops once considered the future of retail have been shutting their doors for good.

In May, on Huaqiang North Road in the heart of Shenzhen's electronics shop district, a Buy-Fresh Go store that had been held up by the media as a model of automated retail closed after only about a year. The store had been stripped of all its high-tech equipment and an ad seeking a new tenant was placed at the entrance.

The idea behind this store, and others like it, was to take advantage of smartphone payment systems to eliminate the need for clerks and other staff. The automated systems would also gather data on consumer preferences, feeding it into artificial intelligence to optimize inventories and logistics.

Amazon.com launched an automated convenience store in the U.S. in 2016. In China, e-commerce giant Alibaba Group Holding opened a similar store in 2017 and other IT companies soon followed suit.

By the end of 2017, an estimated 200 or so unmanned convenience stores had sprouted up around the country. According to itjuzi.com, a research firm specialized in IT-related venture investments, the business attracted 4.3 billion yuan ($620 million) in 2017 alone.

Buy-Fresh Go started expanding in Shenzhen in July 2017 and opened the Huaqiang North Road location soon after.

But the boom did not last long. At the beginning of 2018, the industry started seeing a series of closures and even bankruptcies. Funding is said to have fallen sharply, though media and research companies have stopped collecting data.

This Buy-Fresh Go store in Shenzhen's electronics district has been closed and emptied of its automated systems.

In Shenzhen's neighboring city of Guangzhou, i-Store, the first local unmanned convenience chain, has also been closing stores one after another. It had three left at the end of March, down from a peak of nine, according to a local newspaper.

Last December, JD.com, China's second-largest online retailer, announced it would suspend its smart shelf business -- small unmanned shops the size of train station kiosks. In July 2018, JD.com unveiled a plan to open 5,000 of them in office buildings and other places in major cities by the end of the year, only to withdraw the plan six months later.

What went wrong?

The difficulty of selling fresh groceries in stores without staff is one major obstacle.

Industry experts say a convenience store in a major Chinese city like Beijing needs to generate at least 5,000 to 6,000 yuan in sales per day to remain viable. A significant chunk of those sales come from boxed lunches, ready-made fresh meals, desserts and other products with limited shelf lives.

In Japan and China alike, the gross margin on processed food, which lasts longer, is about 25%, while that on fast food and fresh groceries stands at 40% to 50%. In other words, the higher the ratio of fresh food at a convenience store, the more stable the business becomes.

Many of the companies that attempted to run unmanned convenience stores appear to have lacked such knowledge. If a store only carries long-lasting products like drinks and snacks, it looks more like a big vending machine in the eyes of consumers. Although the new concept of unmanned convenience stores attracted shoppers early on, the novelty has worn off.

Another issue is that the unmanned store operators, it seems, have not made the most of their data.

Convenience store or vending machine? Setups like this one in Beijing make it hard to tell.

Convenience stores have arguably been more successful in Japan than anywhere else because of the way they use their data. Head offices focus on analyzing the information to understand what sells, plan the development of new products and ensure factories make them efficiently. They also build logistics networks that enable just-in-time deliveries.

The Chinese IT companies that entered the market used technology to remove the need for workers but may have overlooked other parts of the equation.

Some are learning. Alibaba has launched a supermarket chain called Freshippo, also known as Hema Xiansheng, where it sells fresh groceries. The stores still take advantage of smartphone payments and other IT advances, but some staff are on hand to support customers.

After only two years, China's unmanned convenience store boom has ended. But those who learn from the failures and bitter lessons could still become retail winners in the future.