Warehouse stores

Hema will open 4 new member stores

On November 9, Hema announced the upcoming opening of four new Hema X member stores: one in Nanjing, two in Shanghai and one in Suzhou.

As early as 2018, Hema started testing its Hema X membership program in Shanghai, which it then started promoting in other cities in China in 2019. On October 1, 2020, Hema opened the first Hema X member store of the country in Shanghai. The store serves an area of ​​20 square kilometers and is able to provide half-day delivery service. Since the arrival of the first Hema X store over a year ago, two others have opened in Shanghai and one in Beijing.

Each Hema X member store has an average area of ​​over 15,000 square meters, which is three to four times the size of a typical Hema Fresh store. The first member stores originally focused on fresh produce, but soon began to expand their product base. The stores in Shanghai and Beijing that opened around the middle of this year each have more than 3,000 items in their inventories, and new products are added every month. Over 40% of the items sold in Hema X stores are company products and over 20% are “Hema MAX” products.

Although it only recently launched its first member stores, Hema said it doesn’t care about profitability at the moment. Even so, according to Hema President Hou Yi, the first store in Shanghai was already profitable within two months of opening. Data from February this year showed that the average Shanghai store customer spent nearly 1,000 Chinese yuan ($ 157), while the highest daily income exceeded 10 million yuan (1.57 million Chinese yuan). dollars).

Hema defines Hema X member stores as a new retail format with an integrated online and offline membership system and hopes they will create a second wave of growth for the company. According to Hou, the goal is for Hema X member stores to compete with Costco and Sam’s Club, and the company plans to increase the number of products on offer to soon overtake its competitors.

Hema’s goal for 2021 was to open 10 new Hema X member stores by the end of the year. Now that the year is almost over, Hema has opened or will soon open a total of six stores. It should be mentioned that after the opening of its first member store by Carrefour in October this year, the company’s suppliers came under pressure from long-time customers to buy back their products from Carrefour on pain of lose orders. Hema said it has also encountered ultimatums from its suppliers and that some suppliers have already reportedly stopped cooperating with Hema X member stores due to pressure from other customers. As for the origin of this pressure, Hema and Carrefour have both pointed the finger at Sam’s Club.

Image: Hema X

This article has been translated from Chinese. Read the original article.