---
title: "Hema Clenches Its Fist, Aiming at Sam's Club's Next Stronghold"
description: "Hema founder Hou Yi spent nine years without achieving his goal, but new CEO Yan Xiaolei accomplished it in just nine months. On the last day of 2024, Hema disclosed in an internal letter that the company had been profitable for nine consecutive months, with double-digit growth and a customer increase of over 50%. From shelved IPO plans and rumors of a sale before March last year to aggressive store openings this year, Hema's fate has reversed in just one year. In mid-February, Jack Ma appeared at a Hema store in Changsha, and Alibaba explicitly stated at an earnings meeting that there are no plans to sell Hema."
author: "高越"
publisher: "New Distribution"
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published: "2025-04-19"
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---

# Hema Clenches Its Fist, Aiming at Sam's Club's Next Stronghold

> Hema founder Hou Yi spent nine years without achieving his goal, but new CEO Yan Xiaolei accomplished it in just nine months. On the last day of 2024, Hema disclosed in an internal letter that the company had been profitable for nine consecutive months, with double-digit growth and a customer increase of over 50%. From shelved IPO plans and rumors of a sale before March last year to aggressive store openings this year, Hema's fate has reversed in just one year. In mid-February, Jack Ma appeared at a Hema store in Changsha, and Alibaba explicitly stated at an earnings meeting that there are no plans to sell Hema.

**Source** | Snow Leopard Finance
Hema founder Hou Yi spent nine years without achieving his goal, but new CEO Yan Xiaolei accomplished it in just nine months.
On the last day of 2024, Hema disclosed in an internal letter that the company had been profitable for nine consecutive months, with double-digit growth and a customer increase of over 50%.
From shelved IPO plans and rumors of a sale before March last year to aggressive store openings this year, Hema's fate has reversed in just one year. In mid-February, Jack Ma appeared at a Hema store in Changsha, and Alibaba explicitly stated at an earnings meeting that there are no plans to sell Hema.
With the sale crisis resolved, Hema is ready to make a big push.
A company's growth often alternates between expansion and resource focus: opening the fist to find new directions, then clenching it when the next business priority is clear.
Now, Hema is at the moment to clench its fist again.
**Clenching the Fist**
In the Yangtze River Delta, new Hema stores are springing up like mushrooms, appearing in multiple prefecture-level cities, counties, and even towns.
In the core business districts of Changzhou, Jiangyin, Yancheng, and Yixing in Jiangsu Province, Hema Fresh store barriers are already up. After Suzhou in Anhui was announced as Hema's first store in northern Anhui, a local blogger revealed that Hema will open five new stores in Anhui in 2025.
At the same time, Taizhou, Shaoxing, Jiaxing, and other places in Zhejiang have also announced that new Hema stores will open at different times this year. A local from Lishui, Zhejiang, asked a Hema Fresh manager via Boss Zhipin when they would open a new store in Lishui and was told, "Soon!"
After Yan Xiaolei, who has a financial background, took over as CEO, Hema abandoned multiple business formats, focusing only on Hema Fresh and Hema NB. The former targets middle-to-high-end quality living and family consumption scenarios, while the latter focuses on community daily necessities and high-frequency consumption, with the "last kilometer at the doorstep" as the scenario, targeting price-sensitive consumers.
In 2024, Hema opened 72 new stores, averaging one every five days, the highest number in the past five years. Among them, Hema Fresh opened 62 stores.
_Source: "2024 Hema District Report"_
Hema Fresh caters to white-collar workers in first- and second-tier cities, with nearly half of its stores upgraded—brighter lighting, wider aisles, and a cleaner look. It has also renewed its focus on membership. It resumed the opening and renewal of "Hema X Gold Membership" and "X Diamond Membership" and made membership services one of the main businesses of each Hema Fresh store.
According to a Hema employee, from store managers to staff, everyone bears different new-member KPIs, and membership services are reviewed daily, weekly, and monthly.
Hema NB, on the other hand, targets more price-sensitive consumers. In lower-tier markets, Hema NB is trying to open franchises in the form of pickup points, including renting about 30-square-meter stores for NB pickup stores, adding Hema NB to existing stores for cross-industry cooperation, and group point cooperation.
Under Hou Yi's leadership, Hema experimented with various formats, including Hema X Membership Store (membership-based), Hema mini (community supermarket), and Hema Premier (premium supermarket). But under Yan Xiaolei's focus directive, all other store types have been transformed or streamlined, except Hema Fresh and Hema NB.
In February this year, Hema X Membership Store announced the closure of three stores, which Hema regards as a "proactive business adjustment." Currently, only five Hema X Membership Stores remain nationwide. Additionally, the front-warehouse model, abandoned for four years, has been restarted, offering delivery within 30 minutes within 3 kilometers, while Hema mini, which was transformed from the front-warehouse model, has been neglected.
Focus is the first thing Yan Xiaolei did.
**New Nobility in County Towns**
Another thing Yan Xiaolei did was to go down-market. Of the 72 new Hema stores, one-third are in second- and third-tier cities and county towns.
In the Yangtze River Delta, Hema entered six new county towns: Changshu, Tongxiang, Yiwu, Zhuji, Deqing, and Zhangjiagang, and became the new "queue king" and even internet-famous check-in spots.
Tangshan Xue (pseudonym), a store-exploring blogger from Zhuji, arrived at Hema on opening day and found bloggers everywhere holding DJI Pocket 3 cameras and selfie sticks. It was time to compete in editing speed; "if you post late, traffic won't be high." She originally planned to try all the samples, but every sample station had long lines, some so long you couldn't tell where the end was.
"It was the first time I felt like I was queuing at Disney or Universal Studios while shopping at a supermarket," Tangshan Xue told the author.
_Hema shelves emptied_
_Image source: Xiaohongshu_
On social media, comments about the "Hema fever" are everywhere. Some wonder, "Is half of Taizhou at Hema?" Others complain that at 2 p.m. a week after the new store opened, it was still as crowded as a morning market. By 3 p.m., shelves for meat, dairy, bakery, and seafood were completely cleared.
The enthusiasm translated into sales. According to Hema data, in Deqing, Hema-brand craft beer, kombucha, and double-pomelo juice sold 150,000 bottles since opening; Dongying Hema sold 400,000 yuan worth of bakery products in one day; and Zhongshan Hema sold 105 king crabs and 410 Boston lobsters on its first day.
The spending power of lower-tier markets should not be underestimated. According to QuestMobile's "2024 Small Town Young and Middle-Aged Consumer Insights Report," 80.4% of small-town young and middle-aged people (under 40) spend over 1,000 yuan monthly online. Mintel's "China Lower-Tier Cities Insights Overview" suggests that consumers in non-first- and second-tier cities are more sensitive and receptive to new things and trends, "they value a sense of achievement and participation more, and are more easily influenced by internet-famous effects."
Traditional supermarkets can no longer fully meet the consumption needs of second- and third-tier cities and county towns, which Hema sees as an opportunity.
Some shopping malls in second- and third-tier cities and county towns are in lease renewal periods, freeing up locations for Hema to enter. According to media statistics, last year, Hema's locations in Zhuhai and Zhangjiagang "took over" from Yonghui Superstores; this year, Hema's first stores in Tangshan, Hebei, and Suzhou, Anhui, were previously Jiawanjia Supermarket and Yonghui Superstore, respectively.
A Nanjing blogger told the author that after news of Hema densifying stores in Jiangsu spread, many mall properties with leases about to expire proactively approached Hema, hoping it would consider moving in.
An industry observer told the author that the new stores Hema opened last year were a steady, orderly expansion around satellite cities near core cities. In fact, it is closely related to the maturity of Hema's local supply chain. "It can be understood as capacity release. For example, in East China, especially Zhejiang, the most stores were opened because the supply chain in East China (Shanghai) is stronger."
**Fierce Competition**
Hema revealed that it will open another 100 stores in 2025, mainly in the Yangtze River Delta and Pearl River Delta regions, especially in emerging markets there. These markets are crowded with competitors, one of which cannot be ignored: Sam's Club.
In fiscal year 2024, Walmart China's net sales reached $20.3 billion (approximately RMB 147.3 billion), maintaining double-digit growth for multiple consecutive quarters, a record high. Among them, Sam's Club is considered to have entered a "rapid growth phase."
Over the past year, Sam's Club opened six new stores, including in new second-tier cities like Dongguan, Wenzhou, and Quanzhou. This year, Sam's Club continues to focus on lower-tier markets as key expansion targets. In Walmart's previous job postings for Sam's Club new stores, locations covered second- and third-tier cities and county-level cities such as Jiaxing, Hefei, Zhongshan, and Zhangjiagang.
In some small county towns in the Yangtze River Delta and Pearl River Delta, a purchasing agent chain for Hema and Sam's Club has long been established. In the last two months of last year, 50 to 60 new Sam's Club purchasing agents appeared in Hubei, some even forming their own chain brands. Local users have a certain awareness of both Hema and Sam's Club. Previously, they could only satisfy their consumption needs through online e-commerce platforms or by driving to first-tier city stores.
_Sam's Club purchasing agents_
_Image source: Xiaohongshu_
Sam's Club and Hema are both seizing this opportunity by increasing their presence.
The author counted the existing and upcoming stores of Hema and Sam's Club in lower-tier markets and found that this year, Hema and Sam's Club will compete head-on in Zhangjiagang, Zhongshan, and Shaoxing, with county towns in the Yangtze River Delta and Pearl River Delta like Changshu, Yiwu, Zhuji, and Deqing also potential competition areas.
An anonymous consumer industry analyst told the author that there are indeed differences between Hema and Sam's Club consumer groups: the former mostly prefer small packages and order several times a week, while the latter prefer multi-generational families driving to stock up. "But essentially, Hema and Sam's Club overlap and conflict." Once in direct competition, it will test their product marketing, operational strategies, and supply chain systems.
Hema's competitors are not just Sam's Club.
Last year, RT-Mart's M Membership Store opened its first county-level city store in Changshu. RT-Mart CEO Shen Hui called it "the beginning of RT-Mart's layout of membership stores in county-level cities," implying more county stores will follow. Costco, also a membership model, has opened six stores in the Yangtze River Delta. Aldi, Pangdonglai, and various community retail stores are also potential competitors.
Yan Xiaolei has set a new goal for Hema: to exceed RMB 100 billion in GMV within three years.
But the premise for achieving this goal is that Hema must not fall behind in lower-tier markets.


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