Alibaba’s Foray Into Grocery is Remarkable

The Lempert Report
September 15, 2017

We tend to talk a lot about Aldi, Lidl, Amazon and Whole foods – but Alibaba’s Hema supermarket is worth a look and may give us a preview of what we can expect from Amazon Whole Foods.

There are now 13 Hemas, and all are located in ultra-dense Chinese cities – and built to serve a trading area of less than two miles.   

Retail Leader reports that the key to the in-store experience is a high level of mobile integration. Shoppers download the Hema app which is used to scan items, access product information, make a payment, order online and schedule a delivery within 30 minutes.  

 The conversion rate for making a purchase from the app is as high as 35% and online orders account for more than 50%... the first generation of stores that opened in 2015 has an online order penetration rate as high as 70%. 

 “We believe the future of New Retail will be a harmonious integration of online and offline, and Hema is a prime example of this evolution that’s taking place,” Alibaba CEO Daniel Zhang said in a statement. “Hema is a showcase of the new business opportunities that emerges from online-offline integration.”