Core Viewpoint - Hema has decided to completely exit the membership store segment, with the last store in Shanghai set to close by the end of August 2023, following the closure of three other locations in July 2023 [1][3][9] Group 1: Store Closures - The last Hema X membership store in Shanghai will cease operations on August 31, 2023, marking the end of Hema's membership store strategy [1] - Other locations, including the Beijing World Flower store, Suzhou Xiangcheng store, and Nanjing Yanziji store, closed on July 31, 2023 [1] - The Shanghai Gaoqing store had already closed on April 1, 2023, indicating a trend of store closures throughout the year [3] Group 2: Strategic Shift - Hema's founder, Hou Yi, announced his retirement in early 2023, with the new CEO, Yan Xiaolei, focusing on achieving a GMV target of 100 billion yuan within three years [4][5] - The closure of membership stores aligns with Hema's strategic shift towards focusing on its core businesses, Hema Fresh and Hema NB [5] - The decision to abandon the membership store model is seen as a cost-control measure in response to intense external competition and high operational costs [6] Group 3: Financial Implications - The investment for each Hema X membership store ranged from 50 million to 60 million yuan, significantly higher than traditional fresh food stores [6] - Hema has recently achieved its first annual profit since its inception, with a projected GMV exceeding 75 billion yuan for the 2025 fiscal year [10] - The company plans to open nearly 100 new stores in the upcoming fiscal year, focusing on third and fourth-tier cities [10] Group 4: Market Position and Future Prospects - Hema's membership store model was initially seen as a potential growth avenue, aiming to compete with Costco and Sam's Club [8] - Despite the challenges faced in the membership store segment, Hema Fresh and Hema NB are expected to accelerate their expansion [9] - The upcoming launch of a new membership system by Taobao, integrating various services, is anticipated to provide Hema with a significant influx of new members, enhancing growth opportunities [11]