What a mobile first supermarket looks like

Mike Troy
Editorial Director
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While U.S. retailers refine their click and collect strategies, delivering an omnichannel experience in other parts of the world can look very different.

Just how different can be seen in this video which offers a behind the scenes look at the operation of Alibaba’s newest supermarket operating under the brand name Hema. The global commerce giant recently opened three new Hema supermarkets in Shanghai and Beijing, giving it a total of 13 locatoins throughout the country of 1.4 billion. Because of the Hema stores are located in ultra-dense Chinese cities they are designed to serve a trading area of less than two miles and fulfill thousands of orders daily.

(Check out the cover story on Alibaba and founder Jack Ma in the most recent issue of Retail Leader.)

The key to the 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 or order online and schedule a delivery within 30 minutes.  Among users who open the app, the conversion rate for making a purchase is as high as 35%. On average, online orders account for more than 50% of total orders and in the first generation of stores that opened in 2015 the online order penetration rate is as high as 70%.

According to Alibaba, it doesn’t plan to operate a large grocery chain, but rather use Hema stores to showcase the benefits of an omnichannel model it calls, “New Retail” to customers and other businesses that want to digitally transform themselves.

“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.”