In January 2016, the first Hema was launched. A year and a half later, in July 2017, Hema became profitable, with ping efficiency three to five times that of ordinary supermarkets. Since then, Hema has expanded in first-tier cities, opening 51 stores in 13 cities so far, with the fastest turning a profit in six months.
The emergence of hema has disrupted the water level of the fresh food market, and some people worry that hema will disrupt the traditional fresh food market, but new retail external experts (ID: xlswaican) think it is exaggerated, not to mention the competition, hema itself is not a lot of pain.
How is hema’s business model different under the new retail?
Some people say that Hema xiansheng has opened both online and offline stores at the same time and gained customer flow through two channels. It is just a means of publicity to capture the curiosity of the masses through the concept of hype.
Fresh electricity has long been, fresh market is the traditional format. Since 2005, fresh electricity has been born, and since then there have been businesses to join the camp, but has never been able to form a rival force with farmers markets and other traditional formats, and even has been floating, rising and falling replacement, difficult to have a place. Information shows that in the past two years, there have been more than ten fresh electricity suppliers have closed down.
In addition, according to the data analysis released by the Chinese Agricultural fresh electricity Business Development Forum, of the more than 4000 fresh electricity business enterprises in the country, only 1% achieve profit, 4% flat, 88% loss, the remaining 7% is a huge loss. And from 2017, like a sudden rise, “new retail” Hema xian was born a successful first battle, earning enough eyeballs. Let people have started to compare these fresh formats, and began to predict the future of fresh market wind direction.
Throughout the past fresh e-commerce, there are high cost, loss, quality is difficult to guarantee, long delivery time and other problems. In the new retail era, fresh enterprises often choose to purchase directly from the source, and can obtain quality products while purchasing at a low price. Online distribution within a short distance of high-speed delivery, to ensure the freshness and integrity of goods; Offline catering service area to support on-site processing and enhance customer experience. It can be said that hema Fresh fresh business has reconstructed and optimized the “freight yard people”. Although it is the combination of online and offline, it has achieved the effect of 1+1 > 2.
The most important thing is that high quality service and efficiency are the advantages that traditional e-commerce does not have. It is the support of these two advantages that makes Hema Fresh food become another big purchase choice in addition to traditional fresh food markets such as wet markets. The cornerstone of these two advantages is the huge capital chain, especially the heavy model such as Hema Xiansheng and Yonghui Supermarket super species, which can be copied by ordinary people. This has also become a limitation of hema fresh.
Hema’s limitations: Behind the bustle is the carnival of a few people
Hema opened 51 stores in just over two years, which is not too many for the national market. It’s not that I don’t want to expand, it’s that I can’t. It is reported that the operating cost of a single hema store is tens of millions of yuan, so it is difficult for ordinary people to copy the model, and it is difficult for Hema to expand in a large scale. Rather than expand indiscriminately, it is better to play it safe in high-consumption areas. Therefore, hema xiansheng is only a few people’s carnival for the time being.
First, the service scope is small. Hema limited its delivery range to three kilometers to ensure speed and freshness. Because of the high operating costs, of course, you can’t open a store every three kilometers. Expand the distribution? There’s no guarantee of delivery. Offline stores can certainly receive visitors from all over the world, but for Hema Xiansheng, the main online channel, three kilometers can be considered stingy.
Second, the service crowd is small. The first is the high consumer group. According to statistics, high-end consumers account for more than 83% of hema fresh’s consumer group. The reason is that hema Fresh has high operating costs, high labor costs, and packaging and logistics input, the total investment is large. These inputs will eventually be attached to the products, and the preferential benefits won from the origin of the products will disappear. By no means will the majority of people accept the high price of Hema Fresh. The second is for young people. In addition to the price, elderly people are also rejected by purchasing methods such as app ordering and Alipay payment. Elderly people have to spend a lot of time to buy food, which is inconvenient.
Probably for most of the second – and third-tier and lower tier city dwellers, Hema doesn’t really exist. Indeed, it is hard to spread the hema scale model to small cities. To this end, Hema xiansheng and RT-Mart jointly created a “Box Pony”, but from a practical point of view, box Pony may not be an effective means of sinking Hema Xiansheng.
Simple mode, box pony difficult to build
On June 2, hema opened its first store in Suzhou, covering an area of more than 800 square meters, one-tenth to one-fifth the size of Hema Xiansheng. From the name, it looks like a smaller version of Hema, but in fact it is only an ordinary medium and small supermarket, which is far from Hema.
Different from hema’s main fresh products, hema’s fresh areas only have fruits, vegetables, frozen meat and aquatic products, without fresh aquatic products, and other products are the same as traditional supermarkets. With the elimination of catering service areas and on-site processing, hema’s proud automated logistics system is nowhere to be seen. The only hint of hema is the self-service cash registers from hema stores and the open online entrance to Tao Xian Da.
Hemal looks more like a traditional supermarket with Alibaba’S IT system, a model that is clearly hard to compete with.
First, commodities have no advantages. Seafood is undoubtedly the highlight of Hema fresh life, accounting for more than 50%. Its high customer unit price, high gross profit and other attributes contribute a lot to hema’s profit. And take out the box pony of these products, do not have too big competition ability on commodity.
Secondly, low customer unit price, low gross profit and free distribution will become a contradiction, box pony difficult to provide free freight service. So box Pony only offers free delivery for the first order of the day. Traditional supermarket chains have been gradually improving their own distribution mode, third-party logistics distribution, supplier distribution and joint distribution. In logistics, box pony also has an advantage.
It looks like he’s just borrowing his reputation. If Hema xiansheng wants to expand and sink the channel, it will not work by itself.
Hema may not be able to truly disrupt the traditional fresh market in a short time
Hema fresh and other new retail models do have great advantages, but it is difficult to replace the traditional fresh business, and the traditional business will not sit still. Data show that the transaction scale of China’s fresh food market reached 1.79 trillion yuan in 2017, up 6.5% from 1.68 trillion yuan in 2016. In 2016, the proportion of various channels of agricultural products circulation in China is about 73% in farmers’ markets, 22% in supermarkets, and only 3% in fresh e-commerce. Both supermarkets and e-commerce are on the rise.
It is not difficult to see from the data that the traditional fresh market is still in a difficult position to shake. The reason is nothing more than price advantage and wide distribution. However, there are also many pain points in traditional markets. Farmers’ markets have always given people the impression of being dirty, messy and poor, while supermarkets are difficult to maintain the freshness of commodities and the price is higher than the market, which is caused by the outsourcing operation mode of supermarkets.
Now, the role of Hema xiansheng and super species has stirred up the market, although it is difficult to eat a large share in a short time, but it has sent a signal to the traditional fresh market: unchanged will be eliminated, not strong will be eaten.
On the one hand, the threat is imminent, on the other hand, the lure of huge profits in the fresh market. Major supermarkets also re-examine and adjust their attitude, have taken back the fresh management rights, open up the upstream supply chain. At the same time, from the fresh degree, price to narrow the gap with farmers market. Since jingkelong, Wumart and Beijing First Airlines regained their management rights, the fresh food business of supermarkets has changed from chicken ribs to bear claws. The advantages of fresh business in supermarkets attract consumers. Data show that in 2000, only 10.34% of residents in key cities in China bought fresh food in supermarkets. By 2012, the proportion had increased to 37%, and showed an increasing trend year by year. It can be imagined that with the rise of people’s consumption level, the requirements for food safety and shopping environment continue to improve, supermarkets will rapidly grow into the main force.
At present, although the farmer’s market accounts for the largest market share, it is also a relatively dangerous form of business. The only advantage of the farmer’s market is its bargaining function. If the supermarket price is sufficiently preferential, how much room can the farmer’s market have for bargaining? If the farmers’ markets do not improve their own problems, urban villages will also be removed as the city develops and matures, and those that affect the image of the city will either rectify or have to withdraw from the stage.
No matter which format, they are facing up to their weaknesses and constantly improving. Hema fresh is difficult to overturn the traditional fresh market, but its entry will cause catfish effect and promote the industry to a good direction.
Article/New retail external reference, public ID: Xlswaican