ALIBABA’S HEMA SUPERMARKET ON THE WAY TO BECOME CHINA’S #1?

Alibaba’s Hema Supermarket (Freshippo) shared some new data in the new year's message from CEO Yan Xiaolei.

▶️ Overall revenue growth exceeded 40% year-on-year. This would imply the expected GMV would exceed RMB 100 billion, since it was RMB 75 billion in 2024.

▶️ It served over 100 million consumers through dual business models, Hema Fresh and Chaohesuan NB (formerly Hema NB/Hema Outlet)

▶️ Hema has approximately 900 stores nationwide, including about 500 Hema Fresh stores (an up-market format) and about 400 Chaohesuan/Hema NB stores (a community/discount supermarket format)

▶️ Hema Xiansheng entered 40 new cities

▶️ Over 200 new Chaohesuan NB stores opened (it is currently opening new Chaohesuan stores at a rate of 20 per month)

▶️ 80% of new product development focuses on core user needs, leading industry trends with healthy food and innovative fresh food solutions.

Focus for 2026:

▶️ Further strengthening supply chain resilience: strengthen private label brands and direct sourcing capabilities to enhance product competitiveness and create a differentiated competitive advantage.

▶️ Creating the ultimate user experience: focus on mid- to high-end consumption scenarios and community discount needs, and optimise service details to increase repurchase rates.

▶️ Boost organisational effectiveness: increase investment in talent development and improve incentive mechanisms to ensure that those who strive receive reasonable rewards.

(Not much new here; this is what Hema has been doing for a while now)

▶️ In the current fiscal year (April 2025 - March 2026) Hema aims to reach RMB 100 billion in sales.

This could mean that Hema might overtake RT-Mart and become China’s #2 supermarket chain, only behind Walmart/Sam’s Club (which had GMV of RMB 159 billion in 2024).

Hema has made significant missteps since its launch 10 years ago. But since the change of management and dropped all but two business formats, it has regained focus and impressive growth. I would not be surprised if Hema becomes the biggest supermarket company in China in a few years.

-Ed