Before Amazon acquired Whole Foods Stores recently or launched its Amazon Go concept store in Seattle (with no cash registers), Alibaba was already exploring new retail concepts in China.

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In 2015, Alibaba quietly started opening new supermarkets in China called Hema, which it called its ‘new retail’ concept blending its online retail expertise with traditional bricks and mortar stores. It recently launched 3 new stores in the major cities of Shanghai and Beijing bringing the total 13 stores. So, what is so special about these Hema stores?

The new retail

Alibaba hopes to take advantage of its expertise in online retailing and big data analytics in making these Hema stores unique. At these stores, Hema customers can browse, shop, dine and order groceries for delivery from their mobile phones using their Alipay accounts to make electronic payments. Barcodes on all the store products can be scanned using the Hema app on mobile phones to reveal price and product information.

Alibaba utilises big data analytics to understand the browsing and purchase preferences of each customer and to make personalised recommendations and offers on the Hema app. It can also provide a data-driven selection of fresh food and dining options to its customers based on their locations and these preferences – all with a view of replicating and enhancing the online shopping experience.

For now, Hema stores service customers who live within 3 kilometres to ensure delivery times are fast and efficient (in some cases, within 30 minutes). Imagine this as a customer – browsing, testing and comparing a product, buying it and seeing it delivered to your front door before you even arrive home?

And it appears to be working as Alibaba revealed recently that sales per unit at Hema stores are 3 to 5 times higher than at traditional supermarkets.

 

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At the time of writing, the AtlasTrend Big Data Big Fund, AtlasTrend Online Shopping Spree Fund and the AtlasTrend Healthy Lifestyle Fund owned shares in Amazon and the AtlasTrend Online Shopping Spree Fund owned shares in Alibaba. To access the full article plus the investment insights, sign up to AtlasTrend today – sign up for a free 30 day trial.

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About Kevin Hua

Kevin Hua is a Co-Founder of AtlasTrend, an online investment platform that makes it easy for anyone to learn and invest in trends transforming our world. Kevin has over 19 years experience in financial markets including as Senior Portfolio Manager at Atrium Investment Management and Stark Investments.