---
title: "Quietly Cultivating for 6 Years, the Rural Version of Sam's Club - Hema Warehouse Store Hits the 'Big Windfall'!"
description: "After nearly 20 years of silence, warehouse membership stores are experiencing a revival. On July 30, Beiguo Supermarket and Yonghui both opened warehouse stores in Shijiazhuang, Hebei, signaling a new wave of competition. New Distribution interviewed Liu Cheng, co-founder of Tianjin's Hema Warehouse Store, which started in 2015, to gain insights into this trend."
author: "新经销何年"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2021-08-02"
language: "en"
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original_source: "https://mp.weixin.qq.com/s/maQLbVcGMggM4kovMJocWA"
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# Quietly Cultivating for 6 Years, the Rural Version of Sam's Club - Hema Warehouse Store Hits the 'Big Windfall'!

> After nearly 20 years of silence, warehouse membership stores are experiencing a revival. On July 30, Beiguo Supermarket and Yonghui both opened warehouse stores in Shijiazhuang, Hebei, signaling a new wave of competition. New Distribution interviewed Liu Cheng, co-founder of Tianjin's Hema Warehouse Store, which started in 2015, to gain insights into this trend.

**Click to read the original article for details**
**After nearly 20 years of silence, warehouse membership stores are once again 'coming to life'!**
On July 30, the warehouse store under Beiguo Supermarket, a regional chain supermarket giant in Hebei, opened with a business area of 6,500 square meters, marking Beiguo's first warehouse supermarket store.
On the same day, Yonghui's warehouse supermarket officially opened its first store in Shijiazhuang, Hebei. After renovation, the store's operating area expanded from 6,199 square meters to 8,315 square meters. This marks another expansion of Yonghui's warehouse store footprint, following Fujian, Sichuan, Chongqing, Shanghai, Beijing, Shenzhen, Anhui, and Jiangsu.
**Is it a coincidence that Beiguo and Yonghui opened their warehouse stores on the same day and in the same place, or is it 'telepathy'?**
Nowadays, warehouse membership stores are springing up all over the country, and it seems that the failures of Makro and Metro in the past are no longer enough to 'deter' many new players.
Regarding this phenomenon, rather than focusing on these half-hearted newcomers, **New Distribution recently interviewed Mr. Liu Cheng, co-founder of Tianjin's 'Hema' warehouse store, who entered the warehouse store business in 2015. We listened to this case that has gradually emerged from within the industry, and their views on the 'windfall' of warehouse stores.**
**Transitioning from Small B to Big C**
Hema Warehouse Store was officially established in 2015, and before that, WeChat business (micro-commerce) was all the rage. The earliest 'Hema' was actually a WeChat business team, but more like a regional WeChat business rather than one that shipped nationwide.
The WeChat business model involves continuously developing downlines and focusing on community and Moments operations to sell products.
Initially, the Hema team, like traditional WeChat businesses, mainly dealt with products similar to other WeChat business teams. **Later, they realized that the WeChat business channel was actually a good sales channel and could completely return to essential household and livelihood products.**
So, Hema centralized procurement and then wholesaled to small Bs below, who then sold to C-end consumers.
For example, when Hema procured a truckload of fruit, they would notify their downlines in advance via group chat about the specific goods and prices. These small Bs would place orders and pay in advance in the group, and when the truck arrived at the mobile station, they would distribute the goods uniformly.
**Liu Cheng joked that this was actually a bit like early community group buying, just with a different name at the time.**
However, the biggest difference between this model and community group buying is the pre-sale system. **Because it's not sales-driven procurement, and the delivery trucks have significant tonnage differences, each delivery cannot guarantee a complete sell-out. The remaining goods would then face storage and 'sewage' disposal issues.**
To solve this problem, Hema simply rented a 120-square-meter storefront nearby. On one hand, it provided a fixed distribution point; on the other hand, it mainly served to store the remaining goods from the small Bs.
Hema's early prototype store
During storage, Hema discovered that surrounding C-end users were very interested in the products in the store and came to inquire and purchase.
**This type of C-end group is generally the backbone of household procurement, such as mothers. Hema calls them Big C.** After all, Hema's products are usually sold by the case, rarely by weight, so customers often carry a box and leave without picking and choosing.
After discovering this phenomenon of attracting C-end users, the Hema team had a serious discussion and **ultimately decided to transition from small B to Big C.**
And this 120-square-meter storefront was the earliest prototype for Hema's subsequent dozen or so chain warehouse stores.
**China's Rural Version of Sam's Club**
Nowadays, Hema has laid out 14 warehouse stores in Tianjin. There are also several brand-authorized stores in Shandong and Northeast China, and the next step is to gradually expand nationwide based in North China.
In terms of site planning for warehouse stores, Hema adopts a configuration of 500 square meters for the sales floor, 500 square meters for the warehouse, and 1,000 square meters for parking. In fact, compared to the 6,000-8,000 square meters of the traditional supermarket giants mentioned at the beginning, Hema's sales area seems quite 'modest'.
The Hema team has its own understanding of this. Through six years of exploration, they have found a configuration that allows them to pursue high sales per square meter and high labor efficiency while also making their target consumers comfortable.
**Many people say Hema is very similar to Sam's Club, mainly because** most of the products in Hema stores are sold in whole boxes, and the over 400 SKUs in the store are carefully selected.
Hema ensures that every item is of high quality, so they divide the store's products into three major categories: first, they separate fruit from standard food; then, they divide standard food according to the 0°C isotherm, with items above 0°C collectively called standard products and those below 0°C collectively called frozen products.
**Moreover, the company has established three major supply chain systems for fruit, frozen products, and standard products, with regular product selection meetings to eliminate the bottom performers.**
However, the biggest difference between Hema and Sam's Club is in 'membership'. Hema also has a membership system, but it does not charge membership fees.
Hema targets the female group that controls household food procurement budgets, the new middle class. Therefore, whether it's Hema's own strategic direction or the existing consumer perception, Hema is more like China's 'rural version' of Sam's Club.
**Operating a warehouse store is far more than just changing the name**
In Liu Cheng's view, the essence of retail innovation is to improve efficiency through the reconfiguration of people, goods, and places. **But the current warehouse store trend is very similar to the community group buying windfall, with a large number of followers entering, and the biggest misconception is to superficially imitate Sam's Club and Costco, such as opening large stores.**
Operating a warehouse store well is not simply a matter of changing the name, adjusting the display, or expanding the space.
Opening large stores often leads to increased overall costs and greater difficulty in product management. If 'non-professional' players try to do 'big and comprehensive', they may even be worse at managing the entire store than traditional supermarkets transitioning to warehouse stores.
Additionally, some players believe that warehouse stores should stock a large number of near-expiry products to compete on price. However, warehouse stores should not be about price comparison; pursuing the lowest price online is an internet strategy.
**Hema's model is 'wholesale prices, good products'. Liu Cheng repeatedly emphasized, 'Hema does not do the lowest-priced products, because simply comparing prices is too easy; price alone cannot become a moat.'**
Even Sam's Club and Costco do not offer low prices on all products. When Hema shouts the slogan 'wholesale price', it also means that Hema's benchmark, whether in terms of category or price, is no longer the supermarket, but the local wholesale market.
Hema's dozen or so stores maintain a highly unified standard and have achieved very high levels of labor efficiency and sales per square meter.
**Therefore, retail innovation is not as simple as changing a name or imitating an appearance; the key is whether it actually improves the efficiency of internal product circulation.**
_At the 4th China FMCG Conference 2021, hosted by New Distribution from August 24-26, Mr. Liu Cheng will also be a speaker, sharing more insights on warehouse membership store experience. Interested friends should not miss this conference!_
**PS**: From August 24-26, 2021, the 2021 (4th) China FMCG Conference hosted by New Distribution will be held in Shanghai. **Focusing on industry trends, practical cases, and growth connections**, **3,000** FMCG practitioners will gather for this grand event.
10 themed forums covering **new retail O2O, community group buying, short video e-commerce, distributor transformation, new consumer brand rise, new alcoholic beverage interpretation, distribution B2B supply chain, omni-channel marketing, B2B2C new technology applications**, etc., with operators from various segments bringing the latest case studies.
Confirmed heavyweight guests so far include: **1. Tao Shiquan, founder of Jiang Xiaobai; 2. Yao Xuhong, general manager of Meiyijia Holdings Co., Ltd.; 3. Lu Xiuqiong, global expert partner at Bain & Company and former vice president of marketing for Coca-Cola China; 4. Chen Xiaodong, senior vice president of Nestlé Greater China; 5. Zhang Fujun, president of Lee Kum Kee Sauce Group China; 6. Bi Chaojiao, general manager of China Resources Snow Breweries (China) Marketing Center; 7. Yang Hongbin, vice president of Junlebao Dairy Group; 8. Yang Shun, COO of Lipton Greater China; 9. Zhang Yipeng, general manager of Kuaishou E-commerce SKA Brand Operations Center; 10. Li De, e-commerce general manager of Gold Hong Ye Paper Group...**
**A grand event for FMCG professionals, you must be there!**
**Are you 'watching' me?**


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