Fresh moves transform hybrid shopping

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Hema Xiansheng has made its bricks-and-mortar stores feel like giant online supermarkets

Hema Xiansheng's fresh approach appears to be paying off in the cutthroat world of hybrid shopping.

Jack Ma, founder and chairman of Alibaba Group Holding Ltd, picks up an imported crab in the newly opened Hema Xiansheng outlet in the Jinqiao area of Shanghai on July 14. Hema Xiansheng, financed by Alibaba, is a new form of online-to-offline retailer, committed to fresh food, and ready-to-cook meals delivered to customers in 30 minutes. [Photo/China Daily]



Rolled out by Alibaba Group Holding Ltd in 2015, the online-to-offline or O2O retailer has successfully combined bricks-and-mortar stores with online services.

Known for its fresh food, this O2O startup has steadily expanded its network of supermarkets since it opened its first outlet two years ago.

Now, it has 10 stores in Shanghai, two in Beijing and one in Ningbo, Zhejiang province.

"Having both an online and offline outlet should create synergies by aligning two sets of customers under one grocery brand," said Matthew Crabbe, Asia Pacific research director for consultancy Mintel.

"That is important for Alibaba, as the company gets a better understanding of online and offline customers, and the data about their spending habits," he added.

Hema is a prototype of "New Retail" for the e-commerce behemoth as it cements its position in the online marketplace, despite fierce competition from domestic and overseas rivals.

During a visit to the flagship supermarket in Shanghai's Jinqiao area in July, Alibaba Chairman Jack Ma and CEO Daniel Zhang were delighted at what they saw.

"The store leverages data and smart logistics technology to seamlessly integrate online-to-offline systems," said Zhang. "This means we can deliver fresh food to customers in just 30 minutes."

The online grocery market is expected to reach 678 billion yuan ($100.8 billion) this year, nearly 10 times the value of the sector back in 2013, consultancy Mintel pointed out in a report.

Indeed, the shift to O2O has been pioneered by major internet players such as Alibaba, Tencent Holdings Ltd, Baidu Inc and JD.com Inc.

"The real spurt in growth came from 2015 onwards, which followed Alibaba setting up Hema and JD.com collaborating with convenience stores," Crabbe, of Mintel, said.

Since then, the sector has grown rapidly.

At hyper-local Hema, customers can either shop from the comfort of their own homes by using the supermarket's app or pop into the store.

Once there, they can handpick their food, have it delivered or eat it on the spot.

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