Alibaba Experiments With New Retail


There are many experiments with New Retail, but we are particularly interested in Hema (盒馬) from Alibaba. Due to the high cost in acquiring customers online, Alibaba started Hema Fresh back in January 2016.

It started off as an offline fresh food supermarket with an O2O app. Since then, Hema has experimented different forms of retails targeting different scenarios, such as:

  • Hema Mini, a smaller version of Hema Fresh focusing on suburbs.
  • Hema Station, a warehouse that only offers online orders.
  • Hema Market, a “wet market” experience emphasizing vegetables, fruits, and meat.
  • Hema F2, a convenience store in office buildings and shopping districts.
  • Hema Pick ‘n Go, for snacks and pickups.
  • Hema Li, a community shopping mall.

It is particularly interesting to see the decline of Hema Station and the rise of Hema Mini. Hema Station is purely an online store but it couldn’t build up a critical mass to become a profitable business, whereas Hema Mini is an offline store supported by an O2O app that achieved profitability in approximately 6 to 8 months.