The key purposes of New Retail is to gain deep understanding and analysis of online consumers' preferences, to roll out the next generation of online brands and to be aligned with the process of reshaping the manufacturing industry, Zhao said. "In the New Retail era, those enterprises that look primarily at e-commerce as the core channel to sell surplus stock and end-of-line items will be out of the game."
In addition, recent public concerns persist with regard to the impact that e-commerce players have made on traditional shopping systems.
Zhao noted that instead of positioning e-commerce as the competitor of traditional retailers, the New Retail concept aims to converge different business models.
A huge revolution
Not only is Alibaba eager to catch the novel retail trend, but so are other domestic e-commerce platforms.
JD DaoJia (JDDJ), an online direct sales company under the O2O unit of Chinese second-largest online retailer JD.com Inc, released the "Retail Empower Strategy" on April 13 to help traditional retailers improve weak links and to reinforce online transformation.
"The Internet has been helping the Chinese fresh food retail market engender a huge revolution,'' JDDJ CEO Kuai Jiaqi was quoted as saying in a statement the company sent to the Global Times on Friday.
"Merchants are now able to build their own territory online by virtue of JDDJ's platform, by which the traditional retailers can overcome limit on time and distance," Kuai said.
Traditional retailers cannot fully satisfy the needs of present consumers due to the lack of logistics, order processes and online experience, said the company.
The home delivery service is becoming an important business model as it could satisfy the rising demand of consumers in today's society, Cao Lei, director of Hangzhou-based China e-Business Research Center, told the Global Times.
As the government is beefing up efforts to help the retail sector transform, a revolution in the retail industry will be truly realized once online and offline channels further integrate, experts said.
Uncertainties and challenges
Although New Retail seems to possess large growth potential, uncertainties and challenges still remain in the sector, experts said.
Alibaba is still in the middle of experimenting, said Lu Zhenwang, founder of Shanghai Wanqing Commerce Consulting.
In the view of Lu, Hema Fresh has not earned solid revenue so far.
"All chain shops under Hema are not able to cover the entire country so far… Given that consumers have to travel far to the chain shops, it is not realistic to retain them in the long run," Lu told the Global Times on Thursday.
Currently, for those consumers who are located further than a reasonable delivery area - that is, further away than a 30 minute drive - they will not be able to place any order via Hema's app.
Experts also said that the New Retail concept is not mainstream yet and is considered to be applied in first-tier cities where sufficient operating resources such as logistics can be provided.
Sustainable development of platforms like Hema Fresh is critical and the operating teams need to continuously enrich the goods, maintain the fresh food, ensure orders are delivered in short time, keep the price competitive and ensure food security, said Cao.
Lu said that if Hema Fresh can find the balance between operation cost and consumer satisfaction, this experiment might succeed.
