Core Insights - The closure of the last Hema X membership store in Shanghai by August 31, 2025, signifies the complete exit of this business model from the market, following the shutdown of stores in Beijing, Suzhou, and Nanjing [3] - Hema's new fiscal year strategy focuses on opening nearly 100 Hema Fresh stores across over 50 new cities while completely shutting down all X membership stores, driven by nine months of continuous profitability and double-digit growth in 2024 [3][4] - The decision to abandon the membership store model is attributed to the overlap in product offerings with Hema Fresh and the lack of differentiation in its private label "Hema MAX," leading to consumer perceptions of poor value [3][10] Expansion Plans - As of March 2025, Hema Fresh has over 420 stores, with online transactions contributing over 60% to its GMV, and the company aims to expand its footprint in lower-tier cities, particularly in East China [4] - The expansion strategy is supported by a verified profitability model for new store openings, ensuring a balance between growth and profitability [4] Customer Relations and Refund Issues - The closure of membership stores has led to customer dissatisfaction regarding refund policies, where members feel their rights are compromised due to pro-rata deductions based on used benefits [5][8] - Complaints about the refund process highlight inefficiencies, with members facing difficulties in obtaining refunds through the app or customer service [5][8] Supply Chain Challenges - The closure of membership stores has exposed structural flaws in Hema's supply chain management, including a lack of alignment between product offerings and customer needs, with a high overlap in products between Hema MAX and Hema Fresh [10] - Hema's supply chain heavily relies on domestic suppliers, with only 35% of products sourced globally, limiting its ability to compete on price and variety compared to international membership stores like Sam's Club and Costco [10] - The closure is expected to allow Hema to streamline its supply chain to better serve Hema Fresh and Hema NB, potentially improving procurement efficiency and addressing previous inventory management issues [11]

Core Viewpoint - The article discusses the rapid expansion and competitive positioning of Xiaoxiang Supermarket, which is approaching the scale of Pupu Supermarket and surpassing Dingdong Maicai in terms of GMV, with a projected GMV of nearly 30 billion in 2024 [2][6]. Group 1: Company Expansion and Market Position - Xiaoxiang Supermarket is currently in a phase of accelerated expansion, with over 700 warehouses opened domestically and simultaneous overseas expansion [2][4]. - The company has opened 18 cities, including three in Beijing and surrounding areas, eight in Shanghai and Jiangsu-Zhejiang regions, and five in the Guangzhou-Shenzhen area [5]. - Xiaoxiang Supermarket's GMV is projected to reach nearly 30 billion in 2024, surpassing Dingdong Maicai's 25.5 billion GMV, while Pupu Supermarket is expected to exceed 30 billion [6][11]. Group 2: Competitive Landscape - Unlike Pupu Supermarket and Dingdong Maicai, Xiaoxiang Supermarket maintains a strategy of nationwide simultaneous expansion, initially focusing on first-tier cities before moving to popular surrounding cities [7]. - Dingdong Maicai has recently closed several underperforming cities and is focusing on strengthening its presence in the East China region [11]. - In Beijing and Shenzhen, Xiaoxiang Supermarket has a significant market share, with users reporting frequent usage [12][13]. Group 3: Financial Performance and Profitability - Xiaoxiang Supermarket is currently operating at a loss overall, with profitability mainly in first-tier cities, while expansion into second and third-tier cities incurs losses [15]. - Dingdong Maicai has achieved its first GAAP profit in 2024, but its stock price has not reflected this success [15]. - The industry is characterized by low profit margins, with net profit margins often below 1% [14][15]. Group 4: Supply Chain and Operational Efficiency - The article highlights the importance of supply chain management, with Pupu Supermarket achieving low delivery costs through efficient operations [18]. - Xiaoxiang Supermarket has a diverse warehouse model, with capacities ranging from small to large, and is focusing on operational efficiency and investment returns [19][20]. - The company is also exploring the expansion of its SKU offerings to enhance competitiveness [20]. Group 5: International Expansion - Xiaoxiang Supermarket has begun its international expansion, launching in Riyadh, Saudi Arabia, and plans to continue expanding into other regions, including Brazil [21][22]. - The company is leveraging its overseas delivery platform, Keeta, to facilitate its entry into the Saudi market [22][25]. - The strategic choice of Saudi Arabia is based on consumer behavior regarding delivery costs, which are expected to remain high in the short term [25]. Group 6: Future Outlook - Xiaoxiang Supermarket is positioned as a key component of Meituan's retail strategy, with plans to enhance its market presence in the fast-growing instant retail sector [27][28]. - The company aims to capture a significant share of the e-commerce market, which is projected to reach several trillion in scale [27].