This was my experience at China’s supermarket of the future by Alibaba Hou didn’t say how many stores it plans to open in the next 12 years. By Una Staff | August 21, 2017. On another note, since Taobao.com can track all customer ordrs as they are routed through its system, it should be able to aggregate this data and optimize demand/inventory on a grand scale already, without the use of the Hema supermarket system. SHANGHAI, Dec. 11 (Xinhua) -- E-commerce platform Hema Fresh, Alibaba's fresh-food chain, has announced a cross-border shopping project that helps Chinese consumers purchase imported goods quickly and easily. As long as the distribution channel is well-developed (refer to the super efficient and sophisticated distribution in Japan), most problems mentioned in the essay could be naturally addressed. Hema launched its first store in January 2016 in Shanghai and so far has owned over 100 stores across China. Leading suppliers and wholesalers offer these high-quality … Making use of the digitalised supply chain. Hema has been a JDA customer for many years, but the supplier has become an even more interesting option following its acquisition of Blue Yonder. The one thing that I do not fully grasp is how the Hema supermarket differs from other (non-Chinese) supermarket retailers leveraging scale, such as Wal-Mart in the US. Since Hema supermarkets are located very close to customers, the real estate in densely populated areas is very expensive. The digitalization enables food suppliers to have real-time visibility of customers’ orders and to plan their inventory instantly. In addition, Truck drivers use real-time data to group order deliveries and to optimize their routes. Therefore, the delivery time highly depends on the distance between the customer and the seller, ranging from less than a day to more than a week. To you question about whether Hema should sell everything? Now, Blue Yonder’s proven AI/ML capabilities can be integrated with JDA’s market-leading fulfillment solutions. The centralized customer demand forecasting and inventory planning processes decrease the inventory in the supply chain system to a minimum level. This way, vendors are incentivized to follow Taobao.com’s forecasts, resulting in minimal inventory and an even, fair distribution of orders. I was previously unaware that Taobao.com owned physical supermarket locations to handle online grocery deliveries. Taobao.com is an online retail platform operated by Alibaba [1], a Chinese e-commerce conglomerate in China. The barcodes on each item not only let customers trace a product’s origin and track delivery, but are also vital for Hema’s supply chain management system. Alibaba Supply Chain Explained. From product information to payment, it's all done on an app. To maximize profits, Taobao.com must create more value for customers and stakeholders by integrating the entire supply chain. Unexpected supply chain disruptions may even further delay the shipment. Frustration increases as customers watch their orders get stuck on its way. First of all, as prodigious amount of data is collected in the digitalized supply chain system, data mining tools will be used to manage, analyze and utilize these data to understand customers’ preferences and predict their needs in the future. While Taobao.com is doing all these great things and enable its suppliers to view data timely, my question would also be how this Hema Supermarket different from existing supermarket and technology. Ecommerce giant Alibaba has opened another three Hema Fresh stores, advancing its ‘new retail’ strategy, which aims to reinvent retail. Since it was founded in 2015, Hema has opened 150 stores in 21 Chinese cities, according to its website. Import & Export on alibaba.com Selling everything or the fast moving products would not be an issue, since we could control the logistics and inventory accordingly. For HEMA Fresh, A-share Zhongmen stores are distributed in first- and second-tier cities. Or will bots roam aisles, picking up goods and dropping them in a drone destined for final destinations? However I think that groceries and households good serves as great start to the platform. In order to realize the vision of industry 4.0, advanced automations and technologies are to be developed to help workers perform these tasks and further improve the quality and efficiency of the system. In terms of data collection and integrated advance technology, they can introduce mobile payments which allows the company to track customer behaviour and preferences. In a traditional grocery store model, the supplier receives a bulk order from a distributor, who then breaks down larger shipments into smaller tailored shipments that fit the broader but smaller inventory size needs of individual grocery stores. It is very interesting to see how digitalized supply chain has driven online stores to move to an integrated online-and-offline system. With Taobao.com plant form, suppliers are able to view demand timely as well, how would this be changed with the creation of Hema? This allows Hema to transform its supply chain step by step. Summit: Pathways to a Just Digital Future, Investigate how to address technological inequality, AI puts Moderna within striking distance of beating COVID-19, Dig into the totally digital biotech company, From Taobao.com to Hema Supermarket, Alibaba’s Digitalized Food Supply Chain. More stores will be opened in the next few years and will renovate customers’ groceries shopping habits. Alibaba is rapidly expanding its new offline retail store, Hema, throughout China. ... including how it was produced and the supply chain … Due to higher efficiency and lower labor requirements, products sold in Hema supermarket are 10% [2] cheaper than average grocery stores. By relying on Alibaba’s ecosystem – making use of Aliyun (cloud computing), Alipay (mobile and online payment platform), and Cainiao (logistics platform) – the digitalisation of supply chain and logistics becomes extremely important to Hema's farm-to-table fresh goods sales. [1] From Wikipedia, see: https://en.wikipedia.org/wiki/Alibaba_Group. This will also allow for customized experiences for each customer. Taobao.com sells a diversified range of products, including grocery food. Like with Amazon acquiring Whole Foods, I wonder how the physical and capital intensive grocery business will continue to evolve in coming years– will shopper step foot in the grocery themselves? 2. Digitalization in the Israeli electricity sector: will the Israeli citizens join the smart metering revolution. To now have the grocery store request directly from the supplier would imply the supplier is receiving many smaller orders, which they can either choose to deliver on in less-than-truckload shipments that are more costly, or sit on until they receive enough small orders to fill a full truck, which would leave a grocery store without inventory for a longer period than the traditional method. This post has been updated for clarity. One the one hand, the digitalization of supply chain enables customers to track the movement of their orders online. Other than Taobao/Tmall, the more established business line, Alibaba has another three main business focuses which are Fresh Hema, Ant Financial, and Alibaba Cloud. I think this will play out as more information is collected regarding customer behavior. Hema supermarket is what you get when you imagine a seamless blend of the online and offline shopping experience, Alibaba Group CEO Daniel Zhang said Monday. Taobao.com sells a diversified range of products, including grocery food. Zhang noted that Alibaba doesn’t intend to operate a large grocery chain. Access all the supply chain insight you need on Alibaba Group in one place, including details on supply chain operations, strategy and recent news. Zhang toured one of the 10 neighborhood stores in Shanghai with Executive Chairman Jack Ma last week and held up the fresh-food focused Hema as an example of the “New Retail” model, which Alibaba … Nowadays we can buy almost everything online. What’s Hema Fresh? The chain is central to Alibaba's push for "new retail" that blends online and offline experiences, Tom Doctoroff writes. While it’s still early days for Hema, Alibaba said the first two years of operation have shown positive results. But one question I have is that isn’t distribution system the key issue? Alibaba’s more than 60 Hema stores are located in … These hema are of Grade A quality and come in a liquid-like appearance. Nowhere is the New Retail idea more on display than in Hema Xiansheng, Alibaba's futuristic supermarket. Interesting read. “Yiguo will concentrate single-mindedly on bolstering the capabilities of organizations within the Alibaba ecosystem, including Hema, RT-Mart, Tmall Supermarket Fresh and Eleme, consolidating its position as a data-driven, complete supply chain cooperative platform,” read one article posted to Sina.com, which referred respectively to Alibaba’s wholly owned or invested small-format … Positive signs. Really interesting look into how Alibaba is completely transforming the grocery space in CN through the digitization of the supply chain. Fresh Hema (Hema, 盒马鲜生) will help to bring Alibaba… Similarly, in America, Amazon did the same thing by acquiring Wholefoods. Ecommerce giant Alibaba has opened another three Hema Fresh stores, advancing its ‘new retail’ strategy, which aims to reinvent retail. Hema Supermarket acts as both a centralized smart warehouse to eliminate the deliver time, and an advanced supermarket for customers to come shop, eat, and experience. Xulin Guo, chief of staff to Hema's CEO, speaking at the National Retail Federation's The Big Show event, touted … The first Hema Fresh…. This essay talks about how digitalization affects Alibaba's supply chain design and introduces the challenges and opportunities of its new Hema Supermarket. To address the efficiency and quality concerns, a new type of stores named Hema Supermarket was created. Launched in 2015, Hema has expanded to … You must be logged in to post a comment. Hema Supermarket needs to hire more talents in robotics engineering, software development, and machine learning areas. Thanks for the interesting article! In just a few years, Alibaba has ascended to the top of the online commerce industry. Freshippo, also known as Hema, is Alibaba’s grocery chain leveraging New Retail to converge online and offline shopping. Alibaba Group Holding Ltd. has no plans to export its brick-and-mortar supermarket chain Hema to international markets and will focus instead on bringing international products to Chinese consumers, a company executive told a retail conference in New York on Jan.13. They focus on supermarket companies with new retail characteristics such as Yonghui Supermarket, Jiajiayue, Hualian Superchao, Zhongbai Group, BBK, and high-quality fresh suppliers for Fruit and vegetable. The Hema supermarket highlights the transition of online retailers to offline brick and mortar stores. The integrated supply chain makes it possible to skip the distributers in the middle and ship directly from food suppliers to Hema supermarket. Interesting article. Supply chain leaders can learn from Chinese e-commerce goliath Alibaba Group’s groundbreaking ideas, particularly when it comes to lowering costs and differentiating their operations. For example, it could simply optimize demand by showing vendors first whose projected inventories have not been exhausted yet, based on Taobao.com’s forecast/planning. Will Cash Always Be King? Alibaba's offline Hema supermarket was on display in New York City during the 2019 Retail's Big Show on Jan. 13-15, featuring artificial intelligence (AI) and the e-commerce giant's concept on the future of retail. Secondly, the picking, packing, replenishing and checking out processes in the supermarket are still very labor intensive. These stores also provide the convenience of experiencing the merchandise in person whilst online orders are possible. Find quality Manufacturers, Suppliers, Exporters, Importers, Buyers, Wholesalers, Products and Trade Leads from our award-winning International Trade Site. On the other hand, the digitally-enabled supply chain makes information simultaneously available to all food sellers, forming a more integrated information flow. The hema available here can be used in a variety of distinct pharmaceutical, organic and other chemical processes. In order to further improve its supply chain system, Hema Supermarket should address the following three items. What began in 1999 with 18 people meeting in a small studio apartment in China has become a worldwide company with over 100,000 full-time employees. As customers become more and more concerned about food safety and quality, they demand faster shipping and more convenient grocery shopping experiences. Date : 19 July 2017. The stores are sprawling and offer a giant selection of fresh food, including seafood that shoppers can select and send to … The tech giant has grown its brick-and-mortar supermarket to 65 stores over the last year. TO your last question, if the data transparency could be truly done. These new offline supermarkets serves as physical ecommerce distribution centers for the online retailers. Hema Fresh was founded by Hou Yi, a former executive at JD Logistics, the logistics arm of Alibaba’s rival JD.com. Welcome to the future: Alibaba’s Hema Fresh stores, ©The Institute of Grocery Distribution and IGD Services, In-depth articles on the latest developments in the industry, Free guides and whitepapers from our functional experts, Access to a range of topic-specific newsletters. About product and suppliers: Alibaba.com features the best in class hema that are highly pure, colorless and safe to use. The first Hema Fresh…. How is this phenomenon being corrected for? It has a first-mover advantage and the backing of Alibaba. Taobao.com is an online retail platform operated by Alibaba [1], a Chinese e-commerce conglomerate in China. Alibaba's massive Hema supermarket expansion in China creates opportunities for Aussie farmers. “Hema is a true omnichannel retail provider,” says Gutteridge. Taobao.com doesn’t hold any inventory. The extra space is refurbished into a small kitchen with dining tables. Alibaba seems to be ahead of Amazon in reimagining the grocery shopping experience, given that Taobao has been expanding Hema locations since 2015 whereas Amazon’s Wholefoods acquisition was fairly recent. The supermarket chain has created a model in China’s biggest cities that can be rolled out across the country. Customers can ask the chef to cook customized dishes using the groceries they bought, and enjoy a family dinner in the store. There are currently about 20 Hema supermarket open in Beijing, Shanghai, Hangzhou, and Shenzhen. The inventory turnover is reduced to less than a day, and thus much less food is perished and wasted during the transportation and storing process. I think that this is a very essential move and allows Alibaba to capture both the online and offline market especially in groceries which are highly perishable. On your question around whether Hema Supermarkets should sell everything, I think it really depends on what Taobao is trying to solve with these physical stores. Taobao.com is unable to leverage digitalization to improve the efficiency and quality of its food supply chain, and thus cannot respond to customers’ new demand. Want to learn more about digital transformation? Alibaba is expanding Hema, a chain of cashless supermarkets. Thank you for an interesting article! Alibaba Group Holding will source CNY1 billion (USD141 million) worth of crayfish from Hubei through its chain supermarket Hema Fresh to help the virus-stricken central Chinese province’s agriculture recover as soon as possible after the Covid-19 epidemic, the Hangzhou-based tech titan said yesterday. Customers can either order online and get orders delivered to their home, or physically go to the supermarket to shop. Alibaba's offline Hema supermarket was on display in New York City during the 2019 Retail's Big Show on Jan 13-15, featuring artificial intelligence (AI) and the e-commerce giant's concept on the future of retail. Furthermore, lower inventory level requires less space in the store. How does this approach change the order received by a supplier? Hema launched its first store in January 2016 in Shanghai and so far has owned over 100 stores across China. If Taobao’s strategy is to provide a different retail experience to customers in the grocery space through not only more convenient and faster online deliveries but also the in-store experience and the variety of perishable products that it can offer through the more efficient supply chain, I believe it makes more sense to focus on groceries. And Gutteridge highlights how Hema’s strength lies in the choices it provides consumers. Orders can be delivered to places within 2 miles from the store within 30 min. Together we are working to drive change that makes a tangible difference for Society, Business and the Individual. Personally, the latter strategy is less appealing in that these supermarkets are located in prime real estate and using shelf space for other non-perishable inventory that could be easily bought through other online channels does not seem like a cost-effective use of these locations. Register for an account. What’s Hema Fresh? This report will focus on Fresh Hema. This essay talks about how digitalization affects Alibaba's supply chain design and introduces the challenges and opportunities of its new Hema Supermarket. While I personally am saddened to see smaller, local players obliterated by emerging, high-tech competitors like Hema, I appreciate the cost savings, efficiency, and experience offered by this alternative world. In addition, perishable food requires temperature-controlled transportation, which many food sellers can hardly afford. Once a customer makes an order online, the seller ships it to the customer directly. It allows for shipping by the large suppliers to be done most cost effectively because they do large bulk shipments of full truckloads. Daniel Zhang, CEO of Alibaba Group As of October 2018, Alibaba already has 87 Hema stores in China, with plans to open 2000 more in the next 3–5 years. However, because the existing food supply chain of Taobao.com is dispersed among thousands of small and large food sellers, it is almost impossible for Taobao.com to implement these technologies for each individual seller. Not far from the China Post warehouse is the headquarters of Alibaba, the world’s biggest e-commerce firm by transaction volume. One open question is, should the offline stores such as Hema supermarket sell everything, or just the fast-moving products? Interesting topic. Hema Fresh was founded by Hou Yi, a former executive at JD Logistics, the logistics arm of Alibaba’s rival JD.com. Alibaba has also set its sights on department stores and even a home improvement chain. If Taobao’s plan is to simply use Hema supermarkets as warehouses for last mile delivery, then I could see Hema expanding its product categories. IGD provides the latest news, research and insight to help businesses in the food and consumer goods industry succeed. [2] From China Business, see: http://business.china.com.cn/news/info-5725.html. Think of New Retail as the digitization of the entire value chain – the customer, the inventory, the logistics. 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