Hema moves up-market with premium Shanghai store

High-end supermarkets are often located in upscale commercial centers with higher pricing. But Hema aims to follow a path of "high-quality goods at affordable prices," drawing in more young customers for in-store experiences, trials, and repeat visits.

Photo provided to Jiemian News

Photo provided to Jiemian News



Hema (Freshippo), the grocery arm of tech giant Alibaba, has opened its first Premier Store. In Changning District, Shanghai, the store offers seafood, chocolate and gourmet items that cannot be found in other Hema stores. 

GE Dongsheng, Hema's regional GM, said that although more than 80 percent of customers in Shanghai have groceries delivered, a retailer must explore new shopping experiences. 

Shanghai is no stranger to high-end supermarkets and the cutesy cookies and fruit they offer. City Super and Ole' can be found in almost every luxury shopping mall. But with its own research and supply chain capabilities, Hema wants to keep prices affordable while offering a lot of products. 

“We want customers to buy for the quality of the products, not the price,” said HU Jing, designer of the store. She said it took the company only five months to open the store but two years to prepare the supply chain. 

Like other Hema stores, the premier store offers deliveries and has its own WeChat mini program.

After Alibaba reorganized, both Cainiao and Hema were positioned for IPOs, with Cainiao, the logistics arm, having already submitted an application to the Hong Kong Stock Exchange. Going public inevitably demands higher financial standards from a company. 

Compared to regular Hema Fresh stores, the structure of the premier store will inevitably raise costs.