Hema grocery stores team up with property operators

Hema Fresh, the prototype supermarket of Alibaba Group Holding Ltd's New Retail concept, is teaming up with 13 commercial property developers in China to boost its presence in local neighborhoods and communities.

The data-driven food chain pledged to help digitalize the commercial infrastructure for leading developers, such as Evergrande Group, Country Garden and Intime.

The deal will include synchronizing membership systems, hosting local community activities and providing other real estate-related, value-added services, the parties announced at an event in Shanghai, without disclosing details.

The move will provide the momentum to reach the target of having 100 stores by the end of 2018, according to Hema's CEO Hou Yi.

Hou said by deepening its push into more cities and neighborhoods, Hema is aiming to become a social hub encompassing all local services.

"New Retail is not a one-man show," he said. "Hema will be working together with the commercial real estate industry to develop a new retail ecosystem through cooperation and mutual benefits."

Hema, which features fresh seafood and prepared groceries, provides customers with the option to either go into the store and choose their goods in person, or order online through a proprietary app.

The stores also double as warehouses for delivery in 30 minutes within a radius of 3 kilometers.

Real estate properties stand to benefit from the huge online traffic derived from Alibaba's 500 million-plus monthly active users, as well as the data analytics capabilities that can depict customers' shopping preferences, making marketing more precise and effective.

"After the introduction of Hema, we have added an average of 3,000 to 4,000 young customers per month," said Fanny Leung, vice-president of commercial property developer Chongbang Group.

Customer flow doubled in the six months after Hema opened its outlet in Beijing Cuiwei Department Store's Dacheng Road branch last July, said Huang Zhenwang, general manager of the shopping center.