Alibaba expands its mobile-first store concept

Internet Retailing

26th Jul 2017

Alibaba last week unveiled three new versions of its Hema store concept in Beijing and Shanghai, China.

Alibaba founded Hema in 2015 as part of its New Retail strategy to merge online and offline commerce. The stores enable consumers to shop, eat in, and order groceries for delivery – all through their mobile phones.

Since its inception, Hema has grown to 13 stores across China, including in major cities like Beijing, Shanghai and Ningbo.

Consumers can become a Hema member by signing up with their Taobao or Alipay accounts. They can then view and purchase available items from their nearest store through the mobile app.

Hema remembers purchase preferences and makes personalised recommendations. The store also curates a data-driven selection of fresh food and products that are tailored for urban Chinese consumers based on their locations.

According to internal Alibaba data, Hema stores do 3-5 times the number of sales per unit area than traditional supermarkets, and customers purchase on average 4.5 times per month and 50 times per year.

The conversion rate for users who open the Hema app is as high as 35 per cent. On average, online orders account for more than 50 per cent of total orders.

“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.

Hema’s 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.