On September 23, Hou Yi, President of Hema Business Group, announced at Alibaba's Investor Day that stores operating for over one year have achieved positive EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). Hema explained that this means all stores operating for over one year have reached break-even. As of August 31, 2019, the number of stores exceeded 171. This is a small step for Hema, but a big step for new retail. Profitability has always been a sword of Damocles hanging over Hema and similar ventures. Hema Matures, Hou Yi Keeps a Low Profile On September 23, Hou Yi, President of Alibaba's Hema Business Group, posted on Weibo's Toutiao: "Many people say I've become low-key this year. Indeed, I've been doing a lot of things this year. Everyone has high expectations for Hema, and we must live up to them. Today, I'm happy to report Hema's latest situation. After a year of exploration, we've found some ways to address the differentiated needs of consumers in different cities and regions. We've also quietly built a nationwide low-cost fresh food cold-chain logistics network that can deliver live, seasonal, and region-specific products to Hema neighborhoods. New retail will bring new value to more industries. Hema will continue to explore and fill pitfalls in the future. There are challenges and it's quite difficult, but precisely because it's difficult, our efforts are more valuable!" A Young Horse Crossing the River, Accompanied by Potholes Birth of Hema: In March 2015, Hema Fresh was founded. On January 15, 2016, Hema Fresh's first store opened at Shanghai Jinqiao Plaza. Birth of New Retail: At the Alibaba Cloud Computing Conference in October 2016, Alibaba's Jack Ma first proposed new retail in his speech: "In the next ten or twenty years, there will be no e-commerce, only new retail." The core of new retail is to reconstruct people, goods, and places. Alibaba Acknowledges: On July 14, 2017, at noon, Jack Ma and Alibaba CEO Daniel Zhang arrived together at Hema Fresh's Jinqiao store and dined in the food court, revealing for the first time that Hema belongs to Alibaba. Disrupting Tradition: In August 2018, at the "New Retail, New Supply" supplier conference, Hema announced that it would not charge suppliers any traditional retail channel fees such as entry fees, promotion fees, or new product fees, and would build a "new supply" relationship based on a buyer system. This disruptive reform put Hema back in the spotlight, marking an important revolution in traditional retail's "supply relationship." Hema Crises: Since 2018, Hema has experienced a series of incidents: a recruitment scandal ("Beijing people are rich, we can't afford them, we don't want Beijing people"), a payment issue (cash payments required at checkout counters), a labeling issue (fresh products with "premature" labels), a mold issue ("moldy fruit on sale, staff said peeling it off is fine"), a marketing issue ("national market, crossing historical old markets, bringing prices back to 1948"), and a disposal issue ("destroying near-expiry food at midnight"). In these crises, Hema demonstrated strong PR capabilities, including turning bad things into marketing opportunities, as well as CEO Hou Yi apologizing and dismissing the Shanghai regional general manager as a severe punishment. Hema's "Four Sons": In addition to Hema Fresh, Hema announced at a conference this year that it would launch four sub-brands: Hema Xiaozhan, Hema MINI, Hema Caishi, and Hema F2. Hema Xiaozhan is like a "front warehouse," opening in areas where Hema cannot open stores, offering only delivery services. Hema Caishi targets urban communities and suburbs; unlike standard Hema stores, its produce is sold in bulk and it has no dining area. Hema MINI is located in suburbs, towns, and even counties. Hema F2 targets office districts, similar to a convenience store. Top 100 Chain Stores: In May 2019, Alibaba's Hema Fresh ranked 18th in the 2018 China FMCG (Supermarket/Convenience Store) Top 100, with annual sales of 14 billion yuan and 109 stores. First Store Closure: Hema Fresh's Kunshan Xincheng Wuyue Plaza store closed on May 31, 2019, becoming its first store closure in three years. Hema stated: "In retail, nothing is 100% certain. Especially as the number of stores grows, the good must get better, and the bad must be adjusted in time to maintain a healthy body." Hema Turns Positive: On September 23, 2019, Hou Yi announced at Alibaba's Investor Day that stores operating for over one year had achieved positive EBITDA, which Hema interprets as reaching break-even. New Retail Not New, Internet Celebrities Not Famous "New retail, front warehouses, satellite warehouses, private domain traffic, O2O, XX Fresh..." The internet is born to create, that's its nature. New retail has become the biggest trend in China's internet, and many companies on this trend have become super internet celebrities. Among the "Four Sons of New Retail," Alibaba's Hema Fresh is advancing rapidly, Yonghui's Super Species is progressing steadily, JD's 7-FRESH is adjusting, Suning's Su Fresh is eyeing Italy's "Eataly" boutique supermarket, Meituan's Xiaoxiang Fresh opened 7 and closed 5, and many new retail ventures like Earth Port have had short lives..." Internet celebrities standing on the trend share common traits: 1. A powerful "father" with strong capital, willing to burn money, and the business itself looks high-end. 2. Continuously raising funds through "consistently improving" data; the speed of financing determines the speed of company development. 3. Using the illusion of data growth to mask the essence of business operations. When Jack Ma combined the internet and retail, the first term was e-commerce, which "blocked" retail in shoes, clothing, appliances, and skincare. The second term was new retail, which "blocked" physical retail such as supermarkets, department stores, and convenience stores. "Blocked" might be too strong; let's use "forced." In the face of "forcing," some traditional retailers were forced to close, while others were forced to innovate. This is an era of innovation; if you don't innovate, you'll be revolutionized. Is Hema an "internet celebrity on the trend"? Three years ago, it was on the trend; two years ago, it was an internet celebrity; a year ago, it was filling pitfalls; now, it has turned positive. When the tide goes out, you see who's swimming naked. Source: Retail Circle (ID: retailmaster) Tips will be paid 400-2000 yuan for reports adopted. China FMCG + Internet Professional New Media Committed to FMCG manufacturer and distributor transformation, upgrading, and channel digital solutions