Alibaba launches Hema mini in Beijing

Jiong-Jiong Yu
Senior Retail Analyst
@RetailAnalysis

Date : 27 July 2020

Capturing the growing trend of community stores in China, the retailer launched two new outlets in Beijing this month.

Community-based format

Compared to a standard Hema store (known as Freshippo outside China), Hema mini is much smaller in size and carries a smaller range:

  • Store size: Hema mini 800 sq m vs. Hema 3,000 sq m
  • SKU count: Hema mini 2,000 vs. Hema 6,000

There are two Hema mini stores in Beijing, Huangsi Store and Hepingli Store, all opened around the same time. To meet the specific needs of a community store, the retailer paid special attention to the following aspects:

  • Store location: on the path frequented by residents of the community to be highly visible and easily accessible to shoppers
  • Product range: serving the shopper needs of “convenience”, “immediate consumption” and “easy-to-cook” by focusing on:
    • Ready-to-eat and food-to-go goods
    • Daily fresh products that are nutritious and high on protein, e.g. eggs, milk, meat, fish and poultry
  • Price points: low to medium as the core customers are mainstream shoppers

Both stores have a takeaway window facing the street for shoppers’ ultra-convenience. 30-minitue home delivery service is available for those live within 1.5km radius from the store.

Competition is heating up

Up to date, Hema mini has nine stores in total, seven of which are in Shanghai. Its daily turnover can reach CNY200k (US$29k) per store, 50% is from online. According to the retailer, Hema mini's sales density is about six times that of an average community store.

Community stores are predicted to be the next big thing in China, Hema mini has several rivals, including:

  • JD.com: 7FRESH Live
  • RT-Mart: RT-mini
  • Gome: Beauty + Fresh Life Supermarket
  • Yonghui: Yonghui mini
  • CR VanguardVanguard LiFE

Mr Yu Xia, the head of the Hema mini, said Hema mini and Hema will share the supply chain. The company is not in rush to expand the network of Hema mini in Beijing until the two new stores have been embedded and tested for some time.