New retail boosts consumption upgrades

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02:20

In this age of e-commerce, buying online is the norm. However, many customers are missing out by avoiding the physical shopping experience.

Hema Fresh, an Alibaba affiliated grocery store, has been actively bringing online shoppers back from the digital world by creating an integrated shopping experience that meets consumer demand. This hybrid method of shopping has proved to be a success: On weekends, a store in Beijing could receive over 10,000 customers per day.

“You see what you buy, both at the physical stores and on Hema's app. We provide convenient services both online and offline for consumers,” said Mu Shengyang, the operations director of Hema Fresh Beijing.

A saleswoman at a Hema Fresh store showcasing two lobsters./ Hema Fresh Photo

In the two years since the concept of new retail was introduced, Hema has opened 90 stores in 16 cities, and experts say it's been a game-changer.

“New retail has greatly reduced costs in general and improved efficiency by linking production, distribution and consumption together as a trio. It has also satisfied consumers' need for high-quality services,” said Dr. Xu Hongcai, deputy chief economist of the China Center for International Economic Exchanges.

New retail has redefined commerce via the seamless connection of online and offline markets, and it is using cutting edge technology to push China's consumption to a whole new level.

By combining modern logistics with big data, the stores can deliver products to consumers in less than 30 minutes.

“It's a stage of consumption upgrading. As disposable incomes grow, spending power rises. And there's a growing demand for high quality products and services,” said Dr. Xu.

Seafood is one of Hema's signature products. The stores provide everything from Canadian lobster to Fujian yellow fish – fresh out of the water, shipped and arrived within 24 hours.

“Some seafood like Russian king crab are quite exotic to consumers. In case they don't know how to cook it, we also provide cooking services at the store,” said Mu.

King crab at Hema's seafood vendor./Hema Fresh Photo

Including seafood, the store has about 7,000 types of products in stock, half of which are imported. So for the company, this year's China International Import Expo is a huge event.

“As China further opens up its market for foreign companies to share the dividends of its development, Chinese consumers and companies can also benefit from more choices of overseas products and services,” Dr. Xu added.

While China is transitioning from being a big manufacturer into a great consumer, new retail is expected to lead the world's biggest market, and provide more opportunities worldwide.