Alibaba's Hema supermarkets tap on app to drive 'new retail' experience

Alibaba's Hema supermarkets tap on app to drive 'new retail' experience

Jack Ma supermarket
Alibaba Executive Chairman Jack Ma (L) and Alibaba Group CEO Daniel Zhang (C) eat at a Hema supermarket. (Photo: Alizila)

SHANGHAI: Ever wanted to buy fresh food from the supermarket and have it prepared by chefs and delivered to your doorstep?    

By using a mobile app that links to their Taobao or Alipay account, customers of e-commerce giant Alibaba's Hema supermarket can do so and have the dishes sent to their homes within 30 minutes.

Alternatively, shoppers who prefer to shop physically at the supermarket can hand-select their own fresh food such as lobster or other shellfish, buy it immediately and have it cooked and ready to eat in the dining area while they finish the rest of their shopping.

Hema supermarket is Alibaba's foray into what it calls the "new retail" model. Unlike traditional retail models, new retail uses customer data and technology to combine online and offline shopping to offer a more efficient and flexible retail experience.

"Hema leverages data and smart logistics technology to seamlessly integrate online-offline systems, built to provide the unparalleled service of fresh food deliveries in 30 minutes," Alibaba Group CEO Daniel Zhang told Alizila, the e-commerce giant's news site. He and Alibaba founder Jack Ma toured a Hema outlet in Shanghai last week.

A total of 13 Hema supermarkets have been opened since 2015 - 10 in Shanghai, two in Beijing and one in Ningbo. Each is designed to serve a customer base within a 3km radius.

Every product on sale has a scannable bar code such that customers can use the app to scan an item and find information such as its origin and backstory. Every purchase is recorded and used to determine customer preferences and offer personalised product suggestions.

Apart from allowing customers to trace a product’s origin or track its delivery, the data also allows Hema to plan more efficient deliveries and utilise a smarter inventory management system, Alizila said. This model is what allows Hema to fulfil its 30-minute fresh food delivery service, as the supermarkets themselves also serve as warehouses.

In its first two year of operations, Hema stores' sales per unit area were about three to five times those of other supermarkets, the news portal said. Online orders on average account for more than 50 per cent of its total orders, with that number as high as 70 per cent for some of the older stores.

For all its innovations, Alibaba does not plan for Hema to become a large grocery chain, Alizila said. Instead it is meant to serve as a proof-of-concept for its new retail model for customers and other businesses.

Source: CNA/ec