Source丨New Products & Finance Hema, which has been quietly surging ahead, is increasingly showing its 'Hema Zone effect.' A recent report vividly illustrates the symbiotic relationship between new retail enterprises and urban commercial districts. It's time to redefine the 'lower-tier market' and let the 'emerging market' take center stage. The demand for quality consumption in emerging markets is strong and rising, narrowing the physical and psychological distance between new retail brands and consumers, fostering mutual growth among brands, commercial districts, and other stakeholders. Behind this trend, the era of super-strong retail brands has arrived. As 2026 begins, the retail industry is buzzing Just into 2026, the retail and supermarket sectors have seen a series of exciting news, igniting new expectations for the industry in the new year. First, Yu Donglai, founder of the local internet-famous supermarket Pangdonglai, is 'worried' because he originally wanted to keep annual sales under 20 billion yuan, but Pangdonglai's 2025 sales reached 23.531 billion yuan. Market expectations are that Pangdonglai's 2026 sales will continue to grow, with media reports suggesting that Pangdonglai's Zhengzhou store may open before May Day 2026. Next, Business Observer, citing market sources, reported that Sam's Club China's 2025 sales exceeded 140 billion yuan, a year-on-year surge of 40%, and it plans to drive Walmart China's overall sales to 200 billion yuan in 2026. According to incomplete statistics from Yilan Business, in 2026, Sam's Club China will continue to accelerate, opening at least 12 new stores. Unlike the viral popularity of Pangdonglai and Sam's Club, Hema, which has been low-key over the past two to three years, has also been reported with several major news stories, sparking market attention and discussion. On New Year's Day, Hema CEO Yan Youlei sent an internal letter stating that in 2025, Hema achieved a year-on-year revenue growth of over 40%, a growth rate that can be described as 'surging.' In the first year of implementing the dual-wheel drive strategy of Hema Fresh and Chaohe Suan NB, Hema delivered results far exceeding market expectations. However, detailed revenue figures for Hema in 2025 will only be revealed when Alibaba Group discloses its financial report. In 2026, Hema will continue to advance its dual-wheel drive strategy, with both Hema Fresh and Chaohe Suan NB expected to enter more new cities, and store numbers will increase accordingly, especially with a projected surge in Chaohe Suan NB stores. Compared to the operational performance of the three leading retail supermarket brands, I am more focused on the '2025 100-City Hema Zone Consumption Power Report' jointly released by CIC Consulting and Hema, which has recently sparked widespread attention and discussion in the retail industry. In the past, the retail industry liked to talk about new retail, quality consumption, and consumption upgrades in first-tier, new first-tier, and second-tier cities, calling third- and fourth-tier and below markets 'lower-tier markets.' But judging from Hema's performance in these non-first-tier markets, it's time to redefine the lower-tier market. The report proposes the concept of emerging markets, where consumers in these emerging cities have a more urgent demand for quality consumption, even surpassing first-tier cities. The report contains several core viewpoints worth deep study. For example, under the strong provincial capital strategy and population return, non-first-tier cities are welcoming new consumer groups. Consumption in emerging cities is 'rising,' and the market needs to be activated faster. Non-first-tier cities are leading the 'wave,' pursuing comfortable and self-pleasing lifestyles. Over the past two to three years, Hema has focused on non-first-tier city markets. The data from new store openings in cities Hema has newly entered can more directly reveal the real and astonishing consumption power of these cities. The report released the 'Hema Zone Index' for the first time, with Shijiazhuang soaring to 171, Xuzhou reaching 141, and Linyi reaching 127, all higher than the average of key cities nationwide (first-tier and new first-tier cities) (base index 100). The rise in quality consumption demand in emerging cities is also actively promoting Wanda Plaza and Wuyue Plaza to expand in emerging consumer markets, as well as regional commercial complexes and shopping centers introducing brands like Hema, Starbucks, Lululemon, and other luxury and light luxury brands. A wave of quality consumption in emerging markets has already arrived, and the heat is rising. What does the 'Hema Zone effect' indicate? Hema is a leading new retail brand in China and has always been in the spotlight. In its early development, Hema was often under the limelight, but in the past two to three years, Hema has been low-key overall, not wanting to be an internet celebrity, but quietly developing its business. Focusing first on Hema Fresh, since 2023, it has stepped on the gas again, focusing on existing markets in first- and second-tier cities while vigorously developing the Yangtze River Delta regional market. Overall, Hema Fresh stores are opening at an increasingly faster pace, with more and more stores. In 2024, Hema set a record of opening a store every five days on average, opening 72 stores nationwide, the fastest pace in five years. According to Hema's previously disclosed plans, it planned to open nearly 100 new stores in fiscal year 2025. According to the internal letter from Hema CEO Yan Xiaolei, in 2025, Hema Fresh entered 40 new cities, and media estimates suggest that the pace and number of new store openings in 2025 will exceed 2024. Another focus of market attention on Hema is its hard discount supermarket, Chaohe Suan NB. It is reported that in 2025, Chaohe Suan NB opened over 200 new stores. With Chaohe Suan NB now open to franchising, besides focusing on the Yangtze River Delta market, it has already expanded into South China and the Greater Bay Area, and is expected to accelerate further in 2026. According to reports from Cover News, Hema has nearly 500 Hema Fresh stores and 400 Chaohe Suan stores nationwide. From a financial perspective, according to Alibaba's fiscal year 2025 financial report released in March last year, Hema's overall GMV exceeded 75 billion yuan, and it achieved positive adjusted EBITA for the first time for the full year. Based on this, it is estimated that by the end of March 2026, Hema's GMV in fiscal year 2026 is expected to exceed 100 billion yuan. An industry veteran analyzed to me that Hema's continued dual-drive strategy in 2025, with its store numbers, revenue performance, and development speed, indeed far exceeded market expectations. Pangdonglai is always in a state of internet fame, and Sam's Club's new store openings cause traffic jams, but such scenes are also happening at Hema. I remember that in October 2025, on the opening day of Hema Fresh's Shenzhen Meilin store, it was packed with people, and the popularity was truly surprising. This Hema Fresh store is located in a local old community shopping center, which was renovated and introduced brands like Hema and Starbucks, giving the entire shopping center a fresh look. The aforementioned report shows that in recent years, some old commercial districts in second- and third-tier cities have faced a vicious cycle of sparse foot traffic, store closures, and declining visitors. They need to introduce quality new retail brands with strong brand influence to upgrade the commercial district and gain new operational vitality. According to media reports, Hema's first store in Tangshan, Hebei, drove a 101% year-on-year increase in foot traffic in the commercial district and a 122% year-on-year increase in sales. After Shijiazhuang's Letai Center introduced Hema, it still had strong foot traffic at 8:30 PM every night, with weekend daily average foot traffic stable at 30,000 people. The shopping center also introduced new brands like Lego and Pop Mart. These local shopping centers need to change themselves to win development. To introduce leading new retail brands, they must meet corresponding requirements and make changes. After introducing these brands, both sides achieve mutual success. Change is bidirectional, and development is win-win and multi-win. When new retail brands like Hema enter local markets, the more benefited party is the consumer. New retail brands bring new shopping experience models and new choices of high-quality, cost-effective products, as well as a new quality consumption lifestyle. In fact, it's not just the 'Hema Zone effect'; other super-strong retail brands also have their own brand effects and commercial district effects. The era of super-strong retail brands has arrived Competition in 2026 will be even fiercer If we zoom out to the entire retail industry and the supermarket segment, behind it all is the arrival of the era of super-strong retail brands. In the traditional retail market, there were national large supermarket chain brands and super-strong regional chain retail brands. At that time, the market environment was such that opening a large supermarket, even a small one, guaranteed business. Now, in the new retail era, traditional supermarkets and retail brands with outdated management thinking, old-fashioned operating methods, or those unwilling to change or slow to innovate will only be eliminated faster. This is why the current wave of closures among traditional supermarkets continues and intensifies. I believe that the entire Chinese supermarket retail industry has moved from the era of 'many supermarkets, many strong players in the jungle' to an era dominated by strong leading retail brands. With strong head brands like Hema further accelerating market expansion, continuously innovating, entering more cities, expanding store footprints, and amplifying scale effects, they are becoming stronger and have pushed the industry into the era of super-strong retail brands. When several super-strong retail head brands become stronger, it will further intensify industry differentiation: the strong get stronger, the weak fall behind, and eventually are mercilessly abandoned by the market. In my view, the supermarket retail industry will accelerate change and iteration in 2026. The supermarket industry will be more lively and competitive in 2026. Besides the continued surge of super-strong head brands, we also need to focus on several aspects. The first aspect is that quality consumption remains a hot topic, with quality consumption in emerging markets being the focus. As mentioned earlier, under the new consumption wave, quality consumption has become a hot and focal point for consumers. Consumers care about value-for-money or quality-price ratio, even cost-performance, but quality consumption remains the focus of focus. Whether called the lower-tier market or the emerging market, strong provincial capitals, strong prefecture-level cities, county-level cities, and even new cities that new retail brands have not yet entered often have quality consumption demand that is on par with or even more obvious than first-tier cities. The aforementioned report shows that this has driven commercial districts in second- and third-tier cities to introduce more new retail and high-end brands. Hema is naturally a super-strong head new retail brand that these cities are vying to introduce. For example, Hema, Pop Mart, high-end bookstore brand Sisyphus, trendy luxury brands Karl Lagerfeld, Salomon, Asics, and other brands have all entered the Yibin market in Sichuan. The second aspect is that the first-store craze for new retail brands continues, with super-strong head brands entering emerging markets and new regional markets, and the first-store heat remains a market highlight. The retail industry is witnessing a wave of flagship stores, large stores, supermarket stores, and community stores. Retail market players attach great importance to first stores in a city or market, and the first-store craze will continue in 2026. In the past two to three years, Hema has entered dozens of new cities, including the aforementioned Hema Tangshan first store in Hebei, which created a very good first-store effect. In 2026, Hema will continue to maintain Hema Fresh, enter more new cities to open first stores, and release more first-store effects and the 'Hema Zone' market consumption coverage effect. The third aspect is that the development boom of private-label products will further rise. Super-strong head brands will start a race in private-label development speed, with increasingly high demands on full supply chain management, exploration, and evolution capabilities. China's supermarket retail industry has entered the era of the bottom source. Brands like Hema, Sam's Club, and Pangdonglai have long been developing private-label products. The simple OEM era of private labels is over. In the future, supermarket retail brands must continuously develop private-label products to win more consumer favor and trust. It is expected that in 2026, the private-label development boom, especially among super-strong head retail brands, will further intensify, with even diversified R&D and exploration of the value of the same raw material product. For example, Hema's development of the camellia series personal care new products last December is a representative case. Of course, the supermarket retail industry in 2026 will have other focus points, such as hard discount, internet giants accelerating their layout in supermarkets, Pangdonglai's renovation craze, and the transformation exploration of traditional supermarket retail brands. In the future era of super-strong head retail brands, the strong will only get stronger. **【Moving Forward to C-End】******The 11th China FMCG ConferenceTime: March 16-18, 2026Location: Chengdu, China**