Core Viewpoint - Hema's neighborhood self-pickup service will cease operations on October 4, marking a significant shift in its business strategy following the closure of all X member stores in late August [1][2]. Group 1: Business Operations - Hema's neighborhood self-pickup service was launched in July 2021, adopting a "pre-sale + self-pickup" model, allowing customers to place orders by 9 PM for next-day pickup [1]. - Initially, Hema aimed to establish 10,000 self-pickup points, with over 400 stores opened within six months, expanding to cities like Beijing, Guangzhou, Wuhan, and Xi'an [1][2]. - However, by November 2021, Hema began withdrawing from cities like Shenzhen, Guangzhou, and Suzhou, ultimately retaining operations only in Shanghai, which has now also ended [2]. Group 2: Market Challenges - The self-pickup model faced challenges as it required customers to order in advance, which did not align with the typical consumer behavior for fresh produce [2]. - Competing with instant retail models like Hema Fresh and Xiao Xiang Supermarket, which offer 30-minute delivery, the self-pickup stores lacked a competitive edge [2]. - The intensifying competition among major players like JD, Meituan, and Alibaba in the instant retail space further pressured the community group buying and self-pickup models [2]. Group 3: Strategic Focus - Hema's recent closures reflect a strategic refocus, with CEO Yan Xiaolei indicating a shift towards developing "Hema Fresh" and "Super Hema" as the two core business lines [2]. - The closure of Hema's neighborhood service signifies not just the end of a business model but also highlights broader changes within the Chinese retail industry [3].

Core Insights - Hema is shifting its strategy from a broad market approach to a more focused one, aiming to optimize its operations and improve profitability [1][4][8] - The company has faced challenges in recent years, including leadership changes and a pause in its IPO plans, but is now showing signs of recovery with projected GMV exceeding 75 billion yuan for FY2025 [3][5] - Hema's new core business models will be Hema Fresh and the newly rebranded Super Hema, which will focus on hard discount retail [2][9] Group 1: Business Strategy and Changes - Hema has closed its last X membership store and plans to cease its neighborhood business by October 4, 2023, reallocating user demand to Hema Fresh and Super Hema [1] - The company is transitioning from a broad exploration of various retail formats to a concentrated effort on two main business lines, reflecting a need for clarity in its market positioning [2][4] - The previous strategy of rapid expansion and diverse offerings led to operational inefficiencies and unmet growth targets, prompting a reevaluation of its business model [6][8] Group 2: Market Context and Competition - Hema's challenges are set against a backdrop of intense competition in the retail sector, particularly in the realm of instant retail and food delivery, where it must prove its value proposition [3][14] - The hard discount model, which emphasizes low margins and high turnover, is becoming increasingly relevant, with competitors like Meituan and JD also entering this space [10][14] - Hema's ability to adapt to this competitive landscape will depend on its operational efficiency and the strength of its supply chain [14][15] Group 3: Future Outlook - Hema aims to open nearly 100 new stores and expand into over 50 new cities in the upcoming fiscal year, indicating a commitment to growth despite recent setbacks [8][16] - The company is also integrating its services with Alibaba's broader e-commerce strategy, positioning itself as a key player in the instant retail supply chain [15][16] - The success of Super Hema will hinge on its ability to establish a strong brand presence and consumer trust in a market that is increasingly price-sensitive [11][13]

Core Insights - Hema Neighborhood business will cease operations on October 4, with user needs being transitioned to Hema Fresh and Super Hema [1] - Hema Neighborhood was launched in 2021 as a community group buying initiative but has not expanded significantly, operating only a few stores in Shanghai [1] - Hema is focusing on its core businesses, planning to open 100 new Hema Fresh stores by March 2025, aiming for over 420 stores in total [1] - Super Hema has recently undergone a brand upgrade and is in a rapid growth phase, with nearly 300 stores currently [1]

Core Viewpoint - Hema is further retracting its non-core business operations by shutting down Hema Neighborhood Pickup, indicating a strategic focus on its main business lines, Hema Fresh and Super Hema NB [1][2][4] Business Adjustments - Hema Neighborhood Pickup will cease operations on October 4, 2023, with user demands being transferred to Hema Fresh and Super Hema NB [1][2] - The current business matrix includes four formats: Hema Fresh (429 stores), Hema X Membership Stores (1 store), Hema Neighborhood (119 stores, to be closed), and Hema Outlet NB (298 stores) [2][3] - Hema Neighborhood was launched in 2021 to reduce delivery costs and target community users, but its expansion was not sustainable, leading to its eventual closure [3][4] Market Analysis - Experts suggest that the closure of Hema Neighborhood is a continuation of Hema's strategy to focus on its core businesses, as community group buying has proven difficult to sustain [4][5] - Hema's current opportunities lie in upgrading mature supermarket formats and the rapid growth of discount formats, while challenges include organizational management and supply chain optimization [4][5] Future Plans - Hema plans to open 100 new Hema Fresh stores this year, aiming to exceed 520 stores by the end of 2023 [6] - Super Hema NB is in a growth phase, with nearly 300 stores, targeting price-sensitive consumers in lower-tier markets [6]

Group 1 - The membership-based supermarket model in China is facing challenges, with Hema deciding to withdraw from this model by the end of 2024 and focus on its core businesses, Hema Fresh and Hema Neighborhood [1] - Sam's Club has successfully targeted high-net-worth consumers in China, achieving rapid growth by meeting the emotional value of mid-to-high-end consumers, but now faces a decision point regarding its future strategy [2] - Hema's membership store has struggled with positioning, attempting to compete with Sam's Club and Costco while also managing its existing businesses, leading to inconsistent membership policies [1] Group 2 - The membership growth for Sam's Club is nearing its limit, creating pressure to either expand further into the high-end market or adopt a more niche approach to retain loyal customers [2] - The decision to exit the membership supermarket model by Hema is seen as a realization of the difficulties in this market rather than a simple retreat [1]