Source丨New Product Brief Finance Wu Wenwu, Hema, which has been rapidly expanding, first gave up its membership store business, ending its dream of becoming China's version of Sam's Club. Now it is shutting down its neighborhood pickup service, marking the end of its community pickup dream. Hema Shuts Down Neighborhood Pickup Business Recently, Hema, Alibaba's new retail brand, has been making frequent market moves, stepping on the gas and the brakes at the same time. On August 29, Hema officially announced that its budget community supermarket, Hema NB, would be renamed Super Hesuan NB, with the slogan "Real value, enough peace of mind." This is not just a simple rebranding but a strategic upgrade. On the other hand, Hema is also actively adjusting its business strategy, even at great cost, to close down former star businesses. Last month, Hema completely abandoned its membership store business, closing all Hema X Membership Stores by the end of this month. Having once attempted to challenge Sam's Club in China without success, Hema's dream of becoming China's version of Sam's Club is completely over. The author noted that Hema is about to shut down another business. On September 4, Hema Neighborhood Pickup (Hema NB Pickup) announced that the service and related operations would fully cease on October 4. The announcement stated that specific closure arrangements for each pickup store would be notified via pickup community groups or notices posted at the stores. Hema Neighborhood Pickup said that members' Hema gift cards and Hema Flowers can still be used at other Hema stores. After the pickup stores and related services cease, members can still contact customer service via online chat or hotline for after-sales support. Hema responded to media that the needs of neighborhood pickup store users will be fully taken over by Hema Fresh and "Super Hesuan NB." Compared to Hema Fresh, Hema X Membership Stores, and the recently renamed Hema NB, Hema Neighborhood Pickup is less well-known, but it was once an important direct-to-consumer scenario for Hema's community retail business. Public information shows that Hema Neighborhood Pickup launched in July 2021 as offline pickup stores where consumers order online and pick up at the store, a "pre-sale + pickup" model, mainly located in community shops, closer to residents' lives. Neighborhood pickup was once highly anticipated by Hema; then-CEO Hou Yi proposed a goal of "10,000 Hema Neighborhood Pickup stores nationwide." However, due to Alibaba's strategic adjustment of its retail business and Hema's new management team focusing on Hema Fresh and Hema NB as core businesses, other non-core businesses, including membership stores and neighborhood pickup, were bound to be gradually closed. Closing the neighborhood pickup business is a major adjustment to focus on the core business ecosystem, cutting underperforming and unprofitable businesses, and a stop-loss measure. In the author's view, the neighborhood pickup business carried Hema's dream of directly and frequently reaching community residents through new retail pickup. Its imminent full shutdown means Hema's community pickup dream is completely over. Rise of Instant Retail, Community Pickup Falls Out of Favor Community pickup is not a new concept, and it has experienced two major waves of development. The first wave emerged with the community O2O concept and business models. Over a decade ago, China's internet industry saw an O2O wave, with models where users ordered online and picked up at offline stores, giving rise to community service apps like Xiaoqu Guanjia. At that time, the author noted that platforms like Xiaoqu Guanjia explored community group buying, where users ordered via the app, and the platform delivered goods to a community store for pickup. Given the internet environment, shopping habits, and the still-developing community business ecosystem, the community pickup model did not see a boom. From 2018 onward, with the rapid penetration of front-warehouse models and community marketing, major internet platforms began entering community group buying, heating up the market. Especially after the COVID-19 pandemic changed consumption habits, community group buying saw explosive growth. In 2020, Didi's Orange Heart优选, Meituan's Meituan优选, Pinduoduo's Duoduo Maicai, and JD.com all entered community group buying, and even Suning launched a community group buying platform focusing on fresh produce and other high-frequency items. Internet giants flooded in, with capital burning through the community group buying and fresh food delivery tracks. Community group buying, through a "pre-sale + collective purchase + pickup" model, achieved efficient "order today, arrive tomorrow" fresh produce flow, with community group buying and offline convenience stores and mom group leaders as connection points. Hema Neighborhood Pickup was born in this context, aiming to add categories, enrich business lines, and increase revenue through community pickup. After its launch in 2021, it expanded rapidly, peaking at 1,500 pickup points. The pickup model driven by community group buying was initially novel, and many consumers were willing to use it, creating a wave of enthusiasm. But community group buying is a tough business with low profits and poor return on investment. Hema Neighborhood Pickup also started high and declined, withdrawing from Shenzhen, Guangzhou, and Suzhou from November 2021, and closing all sites in Hangzhou and Nanjing in October 2022, retaining only the Shanghai market. Now it is about to close entirely. Later, the community group buying and fresh food delivery wave cooled rapidly, with several internet giants shutting down their community group buying businesses. Only a few players remain, holding on, shrinking, or exploring. The community group buying and pickup model was created for user convenience, to reduce the physical distance of purchases, essentially solving the last-mile logistics efficiency problem. Community group buying has fallen out of favor mainly because delivery efficiency has continued to improve, especially with the significant increase in food delivery efficiency, which can deliver directly to users in a short time. Users are often "lazy," and home delivery directly replaces self-pickup. In 2025, the food delivery war among JD.com, Meituan, and Alibaba has escalated into a full-scale instant retail war, which also affects the original community group buying and pickup models. To some extent, the rise of instant retail has replaced community pickup, which is destined to fall out of favor. Hema Has a Bigger New Retail Dream Hema is a benchmark brand in Alibaba's new retail ecosystem. Even though Alibaba has divested traditional retail businesses like RT-Mart and Intime, it still retains Hema. After strategic adjustments by the new management, Hema now focuses on two core business ecosystems: Hema Fresh and Hema NB (now Super Hesuan NB). Over the past year or two, despite initial market skepticism, Hema has continued to expand aggressively, opening stores and delivering solid results. From a financial perspective, Hema has indeed performed well. According to Alibaba Group's fiscal year 2025 financial report, from April 2024 to March 2025, Hema's GMV exceeded 75 billion yuan, achieving its first full-year adjusted EBITA profitability. It also ranked among the top three in the 2024 chain store top 100 list with double-digit growth in sales and store count. Hema's profitability is the best answer to Alibaba and a direct and powerful proof to the market. While people are discussing Sam's Club's rapid growth in China and Pangdonglai as the top internet-famous supermarket, Sam's Club has been relatively quiet in the past two years, accelerating store openings. Data shows that in 2024, Hema opened 72 stores nationwide at an average rate of one every five days, entering 21 new cities, the highest number in five years. In 2025, Hema has been opening stores even more aggressively. According to Hema's fiscal year 2025 plan, it plans to open nearly 100 new stores and enter dozens of new cities. The new stores focus on lower-tier cities and the sinking market, especially in the Yangtze River Delta. While rapidly opening Hema Fresh stores, Hema is also accelerating market penetration through the NB format. Hema recently renamed Hema NB to Super Hesuan NB, aiming to target the discount store track in the sinking market. According to Lianshang.com, the adjustment of Hema Neighborhood Pickup is to focus on the franchise development of Hema NB, launching new franchises with the optimal main store type (500-800 square meters) to improve franchisee efficiency and profitability. In the author's view, Hema's focus on Hema Fresh and Super Hesuan NB is to accelerate seizing the window of opportunity and market advantage in the quality supermarket upgrade in the sinking market. Super Hesuan NB is aggressively attacking the discount track, concentrating superior resources to attack the sinking market. Alibaba is undergoing a series of business adjustments and ecosystem integration, fully developing instant retail, and Hema has also integrated with Taobao Flash Purchase. Jiang Fan, CEO of Alibaba's China e-commerce business group, said at Alibaba's Q2 2025 earnings call that after Hema integrated with Taobao Flash Purchase, online orders exceeded 2 million on the first day, a 70% year-on-year increase. Alibaba is increasingly valuing Hema, which is an important lever in Alibaba's instant retail matrix, a positive signal for Hema. However, Hema, which is rapidly expanding, cannot rest on its laurels; it faces considerable and growing pressure. JD.com recently opened its first JD Discount Supermarket, and Meituan's discount supermarket brand Happy Monkey also opened its first store. Both internet giants are accelerating into the discount supermarket track, putting pressure on Super Hesuan NB. Germany's well-known discount supermarket chain Aldi is rapidly developing in China, mainly in the Yangtze River Delta. Aldi's competitor Lidl has also entered the Chinese market, developing e-commerce and possibly opening physical stores in the future. The author believes that Hema has entered the top tier of China's supermarket industry, achieved scale advantages, and with Alibaba's increasing attention, Hema is still in a growth period. Giving up membership stores and neighborhood pickup to focus on core advantageous businesses is an attempt to forge its own business model and pursue a bigger new retail dream.