Core Insights - Hema is undergoing significant changes, including the closure of all membership stores, indicating a shift in its business strategy [1][2] - The new CEO, Yan Xiaolei, is focusing on core business areas, specifically Hema Fresh and Hema NB, moving away from the previous exploratory approach [1][8] - Hema aims to achieve an annual GMV of 100 billion yuan within three years, reflecting its ambition for growth and market expansion [8] Business Strategy - Hema has confirmed the closure of its membership stores, with the last remaining store set to close by August 31, 2024 [1][2] - The decision to close membership stores aligns with Hema's strategy to concentrate resources on its main business lines, Hema Fresh and Hema NB [6][8] - The membership fee for Hema X members was 258 yuan per year, with a discount for continuous subscriptions, but the company is now shifting away from this model [2][3] Market Position - Hema's membership store model was initially inspired by successful international counterparts like Costco, but the company is now pivoting to a more traditional retail approach [6][7] - The company has reported a GMV exceeding 75 billion yuan for the fiscal year 2025, marking its first positive adjusted EBITDA [7][8] - Hema is expanding its footprint in lower-tier cities, with plans to open numerous Hema Fresh stores, indicating a strategy to penetrate deeper into the market [8] Competitive Landscape - Hema faces increasing competition in the hard discount sector, with new entrants like JD and Wumart launching similar store formats [9] - The integration of Hema's membership system with Alibaba's Taobao platform is expected to enhance its market presence and customer engagement [9] - The evolving retail landscape necessitates that Hema not only scales its operations but also strengthens its internal capabilities to maintain consumer loyalty [9]

Core Insights - Hema has decided to close all its membership stores, with the last remaining store in Shanghai set to cease operations on August 31, 2024, marking a significant shift in the company's strategy [1][3][9] - The closure of membership stores aligns with Hema's new focus on its core business segments, Hema Fresh and Hema NB, under the leadership of new CEO Yan Xiaolei [1][12][14] Business Strategy - Hema's decision to close membership stores is part of a gradual process that began with the announcement of multiple store closures in early 2025, indicating a strategic pivot towards its main store formats [5][9] - The company aims to optimize its business structure by concentrating resources on Hema Fresh and Hema NB, which are seen as key growth areas [9][12] - Hema's annual GMV exceeded 75 billion yuan in the 2025 fiscal year, marking its first positive adjusted EBITDA, reflecting a shift towards profitability [11][12] Membership System Changes - The Hema X membership system, which was initially launched in 2018, has undergone several changes, including a temporary suspension of new memberships in December 2023 due to business adjustments [6][8] - Following the closure of membership stores, Hema has assured customers that their membership rights will still be honored, with annual fees set at 258 yuan [5][6] Competitive Landscape - Hema faces increasing competition in the hard discount sector, with new entrants like JD and Wumart launching similar store formats [13] - The integration of Hema's membership system with Alibaba's Taobao platform indicates a strategic move to enhance customer engagement and expand its market reach [13][14] Future Outlook - Hema has set an ambitious goal of achieving an annual GMV of 100 billion yuan within three years, focusing on expanding its store presence in lower-tier cities [12][14] - The company is expected to benefit from the growth of Alibaba's instant retail initiatives, positioning itself as a key player in the evolving retail landscape [13][14]

Core Viewpoint - Alibaba's Hema Fresh plans to open nearly 100 new stores within the fiscal year, aiming to exceed 500 total stores, reflecting confidence in the domestic consumption market [1] Group 1: Expansion Plans - Hema Fresh will accelerate its expansion starting in 2024, having opened nearly 70 new stores in the previous fiscal year and added 27 new cities [1] - The rapid expansion has made Hema a popular destination, often seeing long queues even two weeks after opening [1] Group 2: Financial Performance - Hema's GMV for the fiscal year 2025 is projected to exceed 75 billion yuan, marking its first year of adjusted EBITDA profitability [1] - Hema ranked among the top three in the 2024 Chain Store Top 100 list, achieving double-digit growth in both sales and store count [1] Group 3: Product Strategy - Hema has consistently focused on enhancing product offerings, introducing various self-owned brands and a wide range of products to cater to daily needs [2] - The company has built a solid supply chain and continues to innovate with trendy food items that attract consumers [2] Group 4: Service Upgrades - Hema has upgraded its online shopping platform, "Hema Cloud Super," to "Cloud Enjoy Club," allowing non-members to purchase nearly 4,000 products [3] - The membership system has been integrated with Taobao's membership, allowing Taobao 88VIP members to access exclusive Hema benefits, resulting in a rapid increase in membership [3]

Core Viewpoint - Hema is set to gradually close its offline membership stores, citing supply chain upgrades that allow its fresh stores and community stores to match the quality and pricing of membership stores, aligning better with Chinese consumers' shopping habits [1] Group 1 - Hema's decision to close membership stores is influenced by the successful upgrade of its supply chain [1] - The fresh stores and community stores are now offering self-operated products that are comparable in quality and price to those in membership stores [1] - The proximity of these stores to residential areas allows consumers to shop more conveniently, aligning with their preference for casual browsing [1] Group 2 - In April, Hema rebranded its original "Hema Cloud Supermarket" to "Cloud Enjoy Club," allowing consumers to purchase over 800 products from Hema MAX's private label online [1] - Hema X members enjoy benefits such as member pricing and unlimited free shipping for orders over 49 yuan throughout the year [1] - These membership benefits are still retained despite the closure of offline membership stores [1]

Core Insights - Alibaba's Hema has successfully established a profitable and sustainable path after 10 years of exploration, with the closure of its last Hema X membership store in Beijing signaling a strategic focus on its core business [1][2] - Hema is expanding its Hema Fresh and Hema NB formats into new first-tier and lower-tier cities, while enhancing its online and offline integration through the Hema App and the newly launched "Cloud Enjoy Club" [1][3] Group 1: Business Strategy - The closure of Hema X membership stores is part of a broader strategy to align with consumer needs, focusing on Hema Fresh and Hema NB to cater to the demand for fresh, convenient products [2][6] - Hema Fresh targets middle to high-end consumers, while Hema NB focuses on community needs with cost-effective private label products, with plans to open nearly 100 new Hema Fresh stores by March 2025 [3][6] Group 2: Supply Chain and Product Development - Hema's competitive edge lies in its self-operated products that are "safe, delicious, and affordable," supported by strong supply chain management and product development efforts [4][5] - The company has established numerous direct sourcing bases, including over 100 "Hema Villages," and has built a comprehensive logistics network to reduce transportation costs [5][6] Group 3: Market Adaptation - The shift from warehouse membership stores to Hema Fresh and Hema NB reflects changing consumer preferences towards smaller, fresh, and convenient packaging, addressing the issue of waste associated with bulk purchases [6][7] - Hema's transition signifies a broader transformation in the retail industry, adapting to the evolving landscape of consumer behavior and market conditions [7]