The Chinese e-commerce first founded Hema stores in 2015 to show how data and technology can transform traditional supermarkets, according to the announcement that came out Monday morning. Sales per unit at Hema stores are three to five times higher than those of traditional supermarkets, the company said. Hema now has 13 stores across China.
Hema stores are designed to accommodate offline and online shopping. The stores let customers use their phones to shop for and order groceries for delivery within 30 minutes in local communities. They can also use their phone to scan barcodes on items in the physical stores to get more information about them. In addition, customers can stop by the stores to eat dishes, including seafood, from over 50 countries. All items can be paid for through its digital payment system known as AliPay, which has about 450 million users worldwide.
"We believe the future of New Retail will be a harmonious integration of online and offline, and Hema is a prime example of this evolution that's taking place," Daniel Zhang, CEO of Alibaba Group, said in the announcement. "Hema is a showcase of the new business opportunities that emerge from online-offline integration."
Alibaba's stock was trading up 0.7% to $152.99 on Monday morning.