On June 2, the author learned that the new brand “Hema Mini” (盒小马), a collaboration between RT-Mart and Hema, opened its first store in the Suzhou High-tech Zone Cultural and Sports Center. Unlike regular Hema stores, Hema Mini continues Hema Fresh's fresh food offerings but adjusts the scale and adds a sports goods section. Additionally, customers no longer need to download the Hema app; they can simply install Taobao on their phones, allow location access, and access the “Taoxianda” (淘鲜达) feature on the Taobao homepage to shop. The first order each day is free of delivery fees, with delivery in as fast as one hour. In response, the author contacted Hema's public relations department, which stated that this is an exploration between RT-Mart and Hema, without disclosing further details. According to informed sources, Alibaba places great importance on this business format. The new company is jointly invested by Alibaba's Hema and RT-Mart, with Alibaba Hema holding a majority stake. Recently, the business format has undergone personnel adjustments. Yuan Bin, who previously oversaw RT-Mart Youxian and Taoxianda operations and served as RT-Mart's New Retail COO, has been transferred to lead the new business format “Hema Mini”. In January of this year, Yuan Bin posted a site-seeking notice on his Moments:
RT-Mart is experimenting with a new model of medium-sized supermarket, seeking commercial properties of 500-5000 square meters in East China, regardless of urban, suburban, or township locations, either standalone commercial service or commercial malls, but with a certain population density within a 2-3 kilometer radius. It appears this was for selecting the location for “Hema Mini”. From the positioning of “medium-sized supermarket” and the product structure of the Taoxianda store, the store has two major features: 1. Emphasis on fresh food. From the Taobao page, the first Hema Mini store aims to highlight “fresh ingredients” and “one-hour delivery”. Categories include seasonal fruits, fresh vegetables, meat, eggs, aquatic products, refrigerated and frozen items, dairy and beverages, snacks, grains and oils, seasonings, alcoholic drinks, beauty and personal care, mother and baby products, etc. Fresh food accounts for over 50% of the store. 2. Curated products. Following the “80/20 rule” (20% of products contribute 80% of sales) of RT-Mart hypermarkets, Hema Mini first removes slow-moving, low-frequency items such as home appliances, home textiles, and clothing. The above eight categories are selected based on top-selling products from hypermarket data. Additionally, it will leverage Alibaba's big data and algorithms, as well as the product database of RT-Mart's over 400 stores nationwide, to curate products as needed. For example, the first store in Suzhou introduced sports goods and set up a dedicated section. Hema Mini may have two values for RT-Mart and Hema: 1. Medium-sized supermarkets will facilitate faster “downward expansion” for RT-Mart and Hema Fresh. Compared to hypermarkets of 8,000-10,000 square meters, medium-sized supermarkets are more flexible and can help RT-Mart and Hema Fresh quickly penetrate third-, fourth-, and fifth-tier cities, especially township and rural markets. “Hema Mini” is likely Hema Fresh's solution for these markets. Based on RT-Mart's previous experiences with Feiniu.com's “Thousand Villages, Ten Thousand Stores” and Feiniu convenience stores, the medium-sized supermarket “Hema Mini” may also adopt a franchise model to penetrate urban and rural markets. 2. Hema Mini's stores are architected with digital technology similar to Hema Fresh. The integration of store and warehouse, and online and offline operations, can improve the efficiency of traditional medium-sized supermarkets, especially by adding online incremental sales and catering to the convenience needs of “lazy young consumers”. Like Walmart's medium-sized supermarket “Huixuan”, Hema Mini's digital technology is expected to be a highlight, making the medium-sized supermarket's strengths even stronger. First, Hema Mini can benefit from online traffic from Taobao's Taoxianda, offering one-hour delivery to meet customers' online needs. At the same time, Alibaba's big data and algorithms can make Hema Mini's site selection and product selection more precise, satisfying both one-stop shopping and convenience. The industry signal from Hema Mini is that leading players in the supermarket sector are refocusing on medium-sized supermarkets. Walmart's logic is that medium-sized supermarkets are a “blue ocean” between the two “red oceans” of hypermarkets and community small stores (convenience stores) – they offer sufficient shopping space, a more complete product selection and shopping experience, while leveraging Walmart's standardized supply chain and data-driven product selection for rapid replication. “The medium-sized supermarket format has vitality, can replace hypermarkets, and makes up for the shortcomings of fresh food community small supermarkets.” Now, with the launch of Hema Mini, another “big player” has entered the medium-sized supermarket segment that the industry has been optimistic about. Additionally, we found that RT-Mart's e-commerce website Feiniu.com has been fully upgraded and revamped to “RT-Mart Youxian” since February 5, with the PC website discontinued and operations moved entirely to the app, with the service scope changed from nationwide to within a 3-kilometer radius of RT-Mart stores. The newly revamped RT-Mart Youxian, in addition to inheriting all accounts/passwords and shopping card balances from the original Feiniu.com, offers free delivery for orders over 29 yuan and one-hour express delivery. In 2013, Huang Mingduan announced the establishment of Feiniu.com to enter the online space. In June 2015, a year and a half after launching its e-commerce website Feiniu.com, RT-Mart launched a platform-based e-mall – Feiniu Mall – covering all categories, similar to platform e-commerce like JD.com and Tmall. According to Sun Art Retail's first-half 2017 performance report, Feiniu.com's GMV reached 1.8 billion yuan, double that of the same period in 2016, with losses trending down. At that time, Feiniu.com had 28 million registered members, of which 3.5 million were active. However, the report did not mention the contribution of Feiniu Mall to the GMV. From public reports, Feiniu.com invested over 1 billion yuan in three years and lost over 400 million yuan. In 2017, RT-Mart began to focus on the B2B business “e-lufa”. At the end of 2017, Feiniu.com began clearing out third-party merchants, and by February 5, 2018, Feiniu.com was fully shut down. Source: FMCG B2B -END-