Hema: Jack Ma beats Jeff Bezos to the punch

By Mitchell Blatt
0 Comment(s)Print E-mail China.org.cn, February 14, 2020
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Women talk at the booth of Hema Fresh Market during the Alibaba E-commerce Expo in Sydney, Australia, Sept. 21, 2018. [Photo/Xinhua]

I frequently travel all around China. In fact, I've already wore down the wheels of my 29-inch suitcase dragging it through the country's streets. 

One of the most annoying things to deal with as a travel writer on the road is unreliable internet in hotels. Having just arrived in the eastern city of Nanjing two weeks ago, I went to Starbucks to try and download some files. Unfailingly, the downloads always stopped halfway through. That is, until I left Starbucks and went to a supermarket across the mall.

After I had set up in the food court of Hema Xiansheng supermarket, the same file downloaded in just half an hour. Why? Hema Xiansheng is a new kind of grocery store, one that uses an app which allows customers to place orders and pay, and therefore requires fast internet.

I admit, I may be a little behind the times. I spent most of the past year and a half in the United States before returning to China, so this was the first time I'd encountered this kind of futuristic supermarket. But Hema Xiansheng, the brainchild of tech giant Alibaba, has already inspired much amazement and discussion in China.

However, if you are living in a smaller city within China, or just about any other city in the U.S. or much of the world, you may not have even heard of Hema Xiansheng, a supermarket chain selling draught beer and even fresh fish that can be steamed in store.

Jeff Bezos has talked about the idea of opening a cashless convenience store for years, and the first Amazon Go store opened for a trial run back in 2016. Today, there are 26 such stores in the United States – either open or in planning. In contrast, by late 2018, Hema had already opened 100 stores across China.

Hema was extremely popular when it first opened. Too popular, in fact. One blogger on Baidu's Baijiahao – an online platform for independent writers – wrote in 2018 that a Beijing store was so crowded that there was a customer said she did not want to return. The one I visited in Nanjing this past month, however, was not overly crowded, and the steamed fish only took twenty minutes to prepare.

I was impressed when I saw one stall with a line of taps along the wall where customers could choose from ten different kinds of draught beer, which could be bottled in store. Besides preparing seafood, there were also about half a dozen other restaurants and a space with tables for people to eat. For me during Spring Festival, at a time when most restaurants are generally closed, it was convenient to have so many dining options available in a supermarket that remained open (this was before the coronavirus' spread forced it to close) – and the food was really good.

Above the heads of shoppers, a conveyor belt moved along carrying bags of food which people had ordered online for delivery to their homes. However, the in-store experience, although excellent, is not what sets Hema apart from a business standpoint. It is the fact that the supermarket will deliver groceries to anyone living within 3 kilometers of a store within just half an hour.

Since Hema was started by Alibaba, the owner of Taobao, the largest online shopping website in China, and Ele.me, an online food delivery app, it has access to the experience and expertise which go with online shopping and distribution. Reportedly, the use of QR codes and big data helps Hema know just what its consumers want (or at least tries to predict it). 

The race for innovation in the "grocery store" market is competitive. Although it composes only 2% of the worldwide market share, grocery store operators seem to think – or fear – that online shopping for groceries will quickly grow. China is already ahead of the curve, as one might expect for a country that is the leader in mobile payments; 4% of grocery shopping in the country is done online.

It is still difficult to make a profit in rising industries, as companies focus primarily on growth and achieving market control. In May 2019, Hema closed its first store – a development that led some to question whether it had expanded too quickly. However, that is a question for the company and its investors to decide. For me as a consumer, I think they offer a quality product, and that is all that matters.

Mitchell Blatt is a columnist with China.org.cn. For more information please visit:


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