---
title: "Hema Fresh Says It Wants to Kill Convenience Stores, and I Immediately Look Down on It!"
description: "On June 9, Hema Fresh's Beijing Shilibao store opened, drawing industry attention. The author visited and was surprised to find founder Hou Yi claiming Hema would beat convenience stores with lower prices, better service, and faster delivery, which the author dismisses as misguided."
author: "调戏营销"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2017-06-14"
language: "en"
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# Hema Fresh Says It Wants to Kill Convenience Stores, and I Immediately Look Down on It!

> On June 9, Hema Fresh's Beijing Shilibao store opened, drawing industry attention. The author visited and was surprised to find founder Hou Yi claiming Hema would beat convenience stores with lower prices, better service, and faster delivery, which the author dismisses as misguided.

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On June 9, Hema Fresh's Beijing Shilibao store, which had been experimenting in Shanghai and Ningbo, opened, becoming a hot topic in the industry. The author (戏哥) visited the store that day and had many thoughts about this "neither fish nor fowl" new model. Just as he was about to express his feelings, he saw Hema Fresh founder Hou Yi say that Hema would rely on "lower prices, better service, and faster delivery" to kill convenience stores.
Originally, the author thought Hema would be the first domestic imitator of Eataly, the IKEA of the food world. Unexpectedly, it chose convenience stores as its opponent, which is a 10,000-point damage! The author immediately looked down on Hema!
01
**Why did Hema choose convenience stores as opponents?**
Convenience stores are undoubtedly the offline retail hotspot of last year and this year. In the past year or two, convenience stores have become one of the most frequented formats for white-collar workers and the post-90s and post-00s generations. Consumers' demand for convenience has been rising, and their consumption has shifted from large stores and e-commerce to relatively smaller convenience store channels, making convenience store business better. While supermarket and hypermarket sales have been declining for years, the convenience store industry has become the only offline retail format to maintain double-digit growth for several consecutive years. Nielsen's "2016 China Hypermarket and Supermarket Shopper Trends Report" shows that convenience store penetration rose from 32% in 2015 to 38% in 2016, 3 percentage points higher than online shopping.
Jack Ma's Taobao convenience stores, Liu Qiangdong's million convenience stores, Bianlifeng, Shandian Gou, Ai Xianfeng, etc., are all targeting this trend. Hema naturally wants to join in and compete for consumers who prioritize convenience.
02
**Hema, maybe you chose the wrong opponent**
Hema really thinks too highly of convenience stores. Last year, the net profit of all 7-Eleven stores in Beijing was only a little over 1 million yuan, with an average daily turnover of about 30,000 yuan per store. But even this level is considered high in the convenience store industry. Nationwide, the average daily turnover of cheap stores, community stores, and mom-and-pop stores is only around 3,000 to 5,000 yuan. Even if you add up the sales of all chain convenience store companies, it's only about the same as the sales of the top chain retailer alone. Hema went to great lengths in Shilibao to create a store of over 10,000 square meters, with several times more manpower than ordinary supermarkets and convenience stores. Is it just aiming for this level of turnover and profit?
Judging from the situation of Hema Fresh's Beijing Shilibao store, whether in terms of location, product selection, pricing, or operating costs, Hema Fresh's physical store is not in the same competitive range as convenience stores. Competing with convenience stores using a physical store whose sales per square meter and per capita efficiency are clearly several times lower than ordinary convenience stores—the author absolutely believes Hema has lost its mind.
If Hema insists on competing with convenience stores, it would be by selecting products specifically for online sales and relying on home delivery to grab business from convenience and community stores. That is, as Hema Fresh said, it will launch an "SOS channel" dedicated to home delivery, covering basically all categories that convenience stores carry, such as batteries, light bulbs, chargers, cigarettes, and even food.
Can Hema's "lower prices, faster delivery, better service" home delivery really kill convenience stores? Better service might be useful, but the other two—"lower prices" and "faster delivery"—may not play a significant role.
**1) Hema says it will beat convenience stores with lower prices, but convenience stores have never competed on price.**
7-Eleven's products are basically not cheaper than elsewhere. You might see a small number of items that seem cheaper, like some salads and bento boxes, but that's to attract traffic. 7-Eleven doesn't make money from those; it makes money from operating income and other items customers buy on impulse, which are more expensive than in supermarkets, malls, or e-commerce channels. 7-Eleven's scenario marketing is very effective. Office workers pass by 7-Eleven in the morning, buy breakfast, and conveniently pick up sunscreen and snacks for the day.
No matter how many bento boxes Hema sells at lower prices than 7-Eleven, it won't make money. But if Hema wants to use bento boxes to attract traffic, without 7-Eleven's scenario, it will be harder to get customers to buy other items on impulse. Moreover, Hema might currently be able to maintain "lower prices" while ensuring "faster delivery and better service" in the short term to grab market share, but I don't think it can sustain "lower prices" in the long run.
**2) Can faster delivery help Hema grab convenience store business?**
The author has a question: Do current consumers really need home delivery of convenience store items within a three-kilometer radius, delivered in half an hour, as Hema offers? Is this demand really large enough?
Closer or faster means higher costs. In fact, convenience stores entered the Chinese market in the 1990s. Why has business only picked up in recent years? Because the previous economic level meant that consumers valued cheapness over convenience; they preferred to spend more time going to supermarkets to buy weekly supplies at lower prices. After GDP growth, consumers can now afford to pay for "convenience," and trading money for "convenience" has become their primary need.
However, consumers' willingness to pay a premium for shopping at convenience stores does not mean they are willing to pay for the logistics costs of home delivery of convenience store items. Convenience and community stores are already close enough to consumers. Is home delivery valuable? In what scenarios would you need home delivery of convenience store items? Planned routine purchases are usually handled through online shopping or supermarkets; impulsive purchases are triggered by scenarios, like the breakfast example at 7-Eleven where you also buy sunscreen; emergency purchases, like running out of salt while cooking—if it's urgent, how can you wait 30 minutes for delivery? Going downstairs to a convenience or community store might take only 5-10 minutes, and moreover, community stores in residential areas basically offer free delivery now.
According to the theory of trading money for "convenience," it is doubtful whether consumers' spending power has evolved to the point where they are willing to pay for home delivery of convenience store items—that is, willing to pay for the 5-10 minutes saved by not going downstairs. This is questionable. At least now, many people give up ordering on fresh food apps when they see an additional 10 yuan delivery fee, and instead buy from community fruit stores when they go out.
Haven't Lawson and Quanshi also tried home delivery? The best-selling Beijing store only gets about 400 orders a month. With an average order value of 40 yuan, that's only about 18,000 yuan in monthly sales, less than the average daily turnover of a Beijing 7-Eleven. But to handle these 18,000 yuan in online orders, Lawson and Quanshi need to assign dedicated staff to integrate inventory data with Baidu Waimai in real time and update page information, wasting at least half a person's labor. And the results aren't good; sometimes customers are told items are out of stock after ordering, indicating that inventory data integration isn't real-time.
This is one reason 7-Eleven doesn't offer home delivery: the volume is too low, and given its current offline turnover, it may not have the manpower to handle online orders. You might say, is it because of third-party logistics? Let's look at a case of home delivery with self-owned logistics: Bianlifeng. The industry has already evaluated this format as "having no room for survival."
Source: 调戏电商 (ID: tiaoxiEC)
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