A customer has a picture taken with a lobster at the Hema store in Chaoyang, Beijing on Thursday. (Photo: Dong Feng/GT)
The concept of "New Retail," which was created by Jack Ma Yun, Alibaba Group Holding's founder and chairman, in late October, is gaining momentum in the domestic markets. Hema Xiansheng, Alibaba's newly founded online-to-offline platform, is putting the novel retail business model into practice, an effort experts say is changing China's traditional retail sector. Despite its large growth potential, the new retail sector still faces many challenges and uncertainties.
Hema Xiansheng, which is also known as Hema Fresh Store, is likely to reshape the landscape of China's retail industry.
It is an online-to-offline (O2O) e-commerce fresh food start-up, backed by domestic Internet titan Alibaba Group Holding.
When Jack Ma Yun, Alibaba's founder and chairman, coined the term "New Retail" at a conference held in Hangzhou, capital of East China's Zhejiang Province, in October 2016, domestic consumers tried to figure out how the concept might unfold.
As a pioneering example of New Retail, the Hema Fresh Store was initially launched in March 2015 in Shanghai. On Friday, Ma visited the Shanghai outlet and ordered king crab and Boston lobster onsite.
The first flagship store of Hema opened in Beijing's Chaoyang district in June and the second one in Beijing opened on Monday. A total of 13 Hema fresh stores have so far been launched across Shanghai, Beijing and Ningbo, East China's Zhejiang Province.
Hema is more than a shopping mall. It integrates the online and offline worlds with logistics and data in a single value chain, offering customers a unique one-stop food center experience. Various options are offered in Hema, including butchery, vegetables, dairy, frozen seafood, hotpot, bakery, and wine.
"I often order fresh food, including vegetables, meat and fruits, on Hema's online platform, and they can be delivered to me within an hour. It is very convenient and the quality of the fresh food is guaranteed," a Beijing resident surnamed Zhang told the Global Times on Sunday.
"The offline Hema Fresh Store also impressed me. Customers who buy seafood can get them cooked and served at the center," Zhang said, noting that ''this takes quite a while, however."
When paying, there are options for both staff-supported and self-service checkout counters, but neither accept cash and rather both focus on the future-oriented quick payment platforms. Hema Fresh recognizes Alibaba's Taobao and Alipay as its main quick transaction platforms, with the Hema Fresh app serving as the only payment platform no matter which channel the consumers choose.
New Retail has therefore gained rising momentum in the country recently as more and more domestic companies are stepping up efforts to advance their O2O businesses.
New drive
During recent years, Alibaba has employed its spending power and logistics know-how to advance the collaboration of online commerce with offline shopping.
In January, Alibaba proposed a bid to privatize Intime Retail, a leading Chinese department store and mall operator. The deal is consistent with Alibaba's strategic goal of enhancing its integration with physical stores and developing its "New Retail" concept.
In February, Alibaba made another move when it announced a new retail strategic partnership with Bailian Group, China's leading retail conglomerate.
Pure e-commerce will become a traditional business and will be replaced by the concept of New Retail - the integration of online, offline, logistics and data across a single value chain - Ma told the conference in Hangzhou in late October.
New Retail is becoming an emerging driving force in reshaping the domestic retail industry as the e-commerce business is evolving to its next inevitable phase; the era of pure online retail has ended, Zhao Nan, deputy director of Ebrun Institute, told the Global Times.
