China continues to see strong growth in retail sales. January and February saw total retail sales of 6.1 trillion yuan (965 billion US dollars). And as Chinese consumers are becoming increasingly digitized, grocery stores in the country are also changing in order to meet the demand. 

Alibaba backed Hema now has over 30 grocery stores across China with plans to open more. While Hema may not be as large as traditional supermarkets, the grocery store offers options that can meet today’s Chinese consumers’ demand – imported seafood, seasonal fruit and fresh vegetables. And its business goes beyond just putting fresh produce in a bag, weighing it and putting a price tag on it, Hema also offers services to prepare and cook the fresh food for customers. 

One customer said that the offer to cook and prepare the fresh produce and seafood is a different experience. In restaurants, some of the ingredients may not be so fresh, but in Hema, people can watch them prepare and cook the fresh ingredients you just bought. 

Hema also offers deliveries. Shoppers can download the Hema app, and scan the bar codes in stores with the App and pay there. In half an hour, the food will be delivered. And Hema collects enough data to run its business more efficiently. 

“What products and how much of a product we put in a store is determined by data collected from nearby communities and customers. The data can also help us set the frequencies for adding more products onto the shelf. Should we replenish a certain product every half a hour or every 40 minutes?“ Chen Dongqing, the Beijing General Manager for Hema, questioned.

Hema is not the only grocery store in China using Internet technologies and modern logistics to provide a more convenient shopping experience. E-commerce giant JD is also investing in similar stores. Meanwhile, there is a handful of smaller start-ups also aiming to make today's shoppers happy – a group of consumers increasingly driven by speed and convenience. 

“They are simply following the consumers' needs because the consumers demand on-spot, instant, available products near where they live and work,” said Jason Ding, a Partner for BAIN & Company. 

Ding also added that technology has been the key to enabling this shift in China's grocery stores. 

“Every time you walk into a store, they can recognize you. If you don't want to take the product home by yourself, they can deliver it for you in a very fast way. All of these are enabled by technology. The locations of the stores are also based on big data analysis of the neighborhood: what type of people are living there, and what's their online behavior. So they can decide the best location to open the stores,” He said.