Chinese ecommerce giant Alibaba has opened three new supermarkets in China this week, continuing its expansion into the world of bricks and mortar retail.
Alibaba has ambitions to transform conventional retail — a strategy it calls New Retail — by leveraging its substantial consumer reach, rich data and technology to integrate online and offline commerce.
As part of this New Retail strategy, Alibaba founded Hema in 2015 as one of its key initiatives to reinvent traditional supermarkets. This week Alibaba opened three new Hema stores in Beijing and Shanghai.
Since its inception more than two years ago, Hema has grown from an experimental concept to a chain of 13 stores across China.
The Hema online and offline experience is fully integrated and complementary of each other, Alibaba said, in turn encompassing all modes and desires of consumers, who can shop, eat in, and order groceries for delivery – all through their mobile phones. Key features include:
- In-store consumption: Fresh food, including live seafood, from more than 50 countries can be cooked to order and enjoyed on the spot.
- Data-driven fulfillment of online delivery orders at scale: The stores serve as fulfillment hubs for local communities with deliveries in 30 minutes.
- Seamless in-store purchase: Shoppers can scan barcodes to learn more information about individual products. Cashless checkout is easy and efficient with Alipay.
- Zero-waste delivery process: All delivery boxes are recyclable and reusable.
“We believe the future of New Retail will be a harmonious integration of online and offline, and Hema is a prime example of this evolution that’s taking place. Hema is a showcase of the new business opportunities that emerge from online-offline integration,” said Daniel Zhang, CEO of Alibaba Group.
Key Hema shopping stats:
- Frequent repeat customers: On average, users purchase 4.5 times per month and 50 times per year.
- Efficient operation: Sales per unit area are 3-5 times higher than that of a traditional supermarket.
- High online conversion: Among users who open the Hema app, the conversion rate for making a purchase is as high as 35 per cent. On average, online orders account for more than 50 per cent of total orders.