Long ago, Alibaba realised that to rule the retail world, they would need to be offline and well as online. Their first foray into the bricks & mortar world was through the part-acquisition of department store chain Intime in early 2014 and it hasn’t stopped since. It owns shares in leading grocery chains RT-Mart, Auchan, Suning and Carrefour in addition to countless partnerships with other retail chains, who utilise its logistics services such as Ele.me delivery and formidable data advantage through ecommerce sales, Alipay, Weibo, Youku, among others.
The most famous of Alibaba’s bricks & mortar pursuits is undoubtedly its Hema/Fresh Hippo New Retail chain. Due to smart use of its data, high use of its app and rich experience, Hema’s mature stores make about four times more revenue per square metre than other supermarkets. It is difficult for other retailers to compete. As a result, Hema has been expanding rapidly with over 171 stores by August, with 2,000 expected by 2022.
One of the most exciting developments in the Hema family happened on 30 November 2019, with the official opening of Hema Li or Fresh Hippo Mall in Shenzhen. It is the first digitalised shopping mall transformed by Hema and Shenzhen department store chain Shirble.
The centre is dubbed a ‘community mall’ due to the theme of families and parenthood, covering the four categories Chinese often refer to in life including eating, clothing, living and transportation. The centre covers 40,000 square metres, half of which is retail. The first floor is a “dining street” with 20 restaurants and snack stores. Up a level, the main focus is living services such as housekeeping, cleaning, digital maintenance, beauty and manicure. The third floor mainly covers children’s education and the parent-child experience area covering entertainment and games, in addition to training classes, early education agencies and shared classrooms. Nearly 60 brands have entered the Hema Li, including the digitalised Da Mu hotpot, the Nayuki, Uniqlo and the Huawei experience store.
The original Hema Fresh was focused on fresh goods, similarly the suburban Hema Vegetable market and metro Hema Mini, however Hema is evolving its structure from eating to “people.” Hema Li is hoping to appeal to the community, creating a neighbourhood that strengthens family relations. Hou Yi, the founder and CEO of Hema Fresh, said consumers come to the mall not for shopping, but for leisure, entertainment and experience, capturing the lifestyle centres trend that has been hot for a few years now.
70% of Hema’s sales in Shanghai come through its app, and within 12 months, Hema Li expects 30-50%. Shirble is reportedly rebranding and ‘digitalising’ their 12 stores in Shenzhen to Hema Li.
Contribution from 虎嗅/Hu Xiu.