Alibaba’s grocery-store network Hema Fresh (Hema Xiansheng) is targeting at least 2000 stores across China by 2022.
With the current network at 160, expansion of the two-year-old chain is now being ramped up after Alibaba worked to refine the format. According to senior executives of Alibaba, quoted in Chinese news media reports, Hema Fresh will have stores in 200 cities by 2030. It is currently in 21, including Shenzhen, Shanghai and Beijing.
Hou Yi, Hema Fresh’s CEO and VP of Alibaba, says the company will be targeting cities with populations in excess of 1 million as it achieves critical mass.
As Pascal Martin and Jack Chuang, partners at OC&C Strategy Consultants, described in a deep dive into the Hema format published early this year, the Hema concept was developed from scratch by Hou Yi, a logistics expert hired from rival Jing Dong.
The Hema store’s value proposition is built on three pillars:
* Superb quality fresh food – particularly seafood – at an attractive price, that you can pick and have cooked to dine in the store or to go.
* A completely integrated smartphone-centric experience, from product information (by scanning QR codes on product labels) to automated check-out enabled by RFID tags, to payment through Alipay (although Alibaba was recently forced by regulators to accept other payment platforms and cash).
* An extended shopping experience with the download of an application that allows online ordering and free home delivery within 30 minutes within a 3km radius of each store.