Illustration from Canva can be drawn

It has been five years since Hema raised the flag of The first state. Under the collective exploration of many capital and players, the whole track is more and more prosperous, but the pattern and weather are constantly changing.

The changes in these two years are particularly obvious. The impact of the epidemic, the strength of the minority capital and the strengthening of the head echelon have brought greater fluctuations to the track. On the one hand, many star players who used to rely on financing to expand barbarously retire and fall, on the other hand, there is a strong contrast between the continuous expansion of a few head players.

The track has obviously become more difficult, because hema, which has always been strong, has also made adjustments, closing several stores in suzhou, Fuzhou and other cities the year before and last year. But such adjustment is not trend, but strategic, because this year, Hema new entered zhengzhou, Hefei, Jinan, Nanchang four strong second – and third-tier cities, sinking intention is obvious.

Another notable move is that Hema is simultaneously building a large number of hema villages and agricultural direct mining bases in the upstream, with the obvious goal of upgrading and strengthening the supply chain.

Five years ago, he plunged into the no-man’s land of new retail and vowed to open up a huge new retail territory. Today, after going through the baptism of the market, Hema’s goal is clearer. Five years of new retail running, hema has been changing in the face of the constantly changing situation of the track and consumer demand, trying to find the most suitable way for its own survival.

First but cautious

In 2016, Ali put forward the new retail concept for the first time, and Hema undertook the landing task of the new retail. At the beginning, hema explored in the way of trial operation and opened its first store in Shanghai.

But at that time, new retail was just a general term, mainly referring to the organic integration of online, offline and logistics. As for the specific model of new retail, no one had an answer, so Hema was actually cautious.

As an upgraded version of e-commerce, new retail is strange but full of great temptation. When Hema started to take action, a rush of store opening started soon. A large amount of capital and players came in and opened stores all over the country in a short time with the concept of new retail or 2.0 mode.

Despite the advance, Hema remained restrained, and instead of fighting with other crazy players to open a store, he was thinking about how to play his own differentiation strategy and carve out a way in no man’s land.

In 2017, Hema made its first bold innovation — the launch of the “Daily Fresh” brand, which provides consumers with vegetables and milk overnight through its own brand and direct collection mode. At that time, the focus of the new retail competition of the track was mainly in the layout of the store and the aspects of going to the store to the home. It was something that most players did not dare to think about to overturn the time-sale mode of fresh fresh with their own brand.

Because refuse overnight, in fact, it is easy to push up their own wear and tear costs, in the fresh food industry, which makes little money, is a very risky thing. Moreover, traditional fresh agricultural products sales channels at that time, such as shang Chao, did not have strict implementation standards on product freshness and aging.

But as it turned out, private labels became the norm for new retail players, and learning hema became an industry consensus.

Although he undertook the important mission of Ali’s new retail, in the first two years, Hema did not get assimilated by the feverish environment in terms of store opening speed. Instead, he was cautious and conservative, slowly opening stores in a trial-and-error way, waiting for an opportunity to quickly replicate. And launch own brand, began to supply chain innovation, then became a strategic focus.

Wild speed

In 2018, the store war of new retail is still hot. The high-profile expansion of meituan, JINGdong, Yonghui and other players has intensified the gunpowder taste of the whole track.

At that time, Hema had no advantage in store scale, which was less than 30 by the end of 2017. However, in 2018, Hema changed its normal pattern and accelerated its store opening speed again and again. Within a year, hema’s total store scale exceeded 100, increasing by several times.

At that time, although the capital is optimistic about new retail, but still afraid of the problem of break-even, if there is no successful experience, forced replication is obviously suicidal. The sudden wild acceleration was not spontaneous, as hema had already broken even in some stores the year before.

Hema’s small mind is not only in store scale, in the face of all the aggressive competitors, in the rapid replication at the same time, but also trying to do the differentiation of single store model. In 2018, the first box pony was born. In the same year, Hema also announced to create a “new zero-supply relationship” with no fees based on the “buyer system”.

In 2019, Hema still maintained a high pace of expansion, and continued to increase its store model, supply chain, private brand and other dimensions to strengthen its differentiation and uniqueness in the industry.

In terms of stores, Hema Mini and Hema Vegetable Market have been born one after another. With increasingly rich store model ecology, Hema can have higher fault tolerance rate and more competition opportunities when facing different competitors, regions, customer groups and suppliers.

In terms of supply chain, Hema has set up 500 bases in China and expanded its procurement vision to the whole world to enrich the categories and consolidate the stability of supply chain. In terms of brands, private brands continue to carry out strategic upgrading, making private brands account for an increasingly high proportion of revenue.

At that time, after a period of fighting on the new retail track, some players showed signs of physical fatigue. Hema’s “combination punch” came down, and many players felt the pressure of competition was much greater.

Seeing the opportunity of quick replication, Hema resolutely stepped on the accelerator and rushed to the front. At the same time, the parallel development of multiple formats and the upgrading of models and brands made Hema once step into an unstoppable position. However, at that time, the industry normal is not profitable, under the rapid expansion of Hema single store profitability is not small test.

In 2019, Hema ushered in its first store closure, a store in Kunshan was closed. At that time, the industry reacted greatly to this, and many views even pointed to the whole track pessimistically. From the perspective of the situation at that time, closing the store is a necessary step of trial and error, but also the premise of revising the operation strategy. Looking at the whole new retail track, hema’s strategic adjustment has become an important symbol of the industry inflection point.

Rational stability

After closing the store for the first time, Hema gradually smelled a dangerous smell and slowed down the opening of the store.

In 2020, after the war of thousands of stores, the epidemic became the last straw. The capital and players who had been competing to open stores began to pay for the previous madness. More and more players were forced to shrink and close down a large number of stores, and many projects incubated by giants were also unable to escape.

Environmental pressure, this year, Hema has closed three stores in Fuzhou. At that time, some people outside the interpretation, this “fast horse” “not adapt to the soil”, “defeat Fuzhou”, after all, Fuzhou is yonghui’s base camp, some articles also assert that “Hema denied his past self”.

Even bigger pits were stepped in, and the pre-warehouse mode was explored — more than 70 “Hema stations” were later converted into hema Mini. Detours and potholes are the inevitable price of rapid development. It is a rational choice to follow the principle of strict profit standard and seek a more reasonable way out for the healthy development of business format.

The closing of the store does not change the growth rate of the overall store opening. New business forms are also coming out in 2020, with the launch of the first “X Member Store” and Hema Bakery.

In addition, after years of polishing and experience accumulation, the growth of the self-owned brand series was getting faster and faster. At that time, the monthly turnover of Hema Workshop approached 100 million yuan. Hema chose to further expand, launched “Hema Organic Fresh”, established 3R business division, and launched “Zero series” products.

By the end of 2020, hema’s own brands account for more than 20%, and the proportion is as high as 40% in X member stores. Hema has created more than 20,000 new products in one year, among which more than 6,000 are its own brands.

Private label needs to be supplied, tested, packaged, and so on, something that traditional retail can’t do, and for the vast majority of new retail players at the time, they were too busy shrinking strategically and figuring out how to survive to pay attention to private label.

In 2021, Hema stores are still steadily increasing, the difference is that these new stores are all landing in key second – and third-tier cities. But sinking is not radical, on the one hand, is to continue to explore the different samples of low tier cities, lay the foundation for the future, on the other hand, although market demand overall recovery significantly in 2021, and the cities of fresh new retail permeability is low, the sinking of market competition situation remains uncertain, many fresh electricity, community a bulk head strong players.

During this period, box of horse also formed new incubation center “horse box X accelerator”, continue to strengthen the supply chain and collaborative ecological brand, in October of this year’s “China retail circle of congress and 2021 fresh development BBS” on the box of horse also exposes two “difference” development goals, built 1000 boxes of macun, buy 100 billion domestic agricultural products.

Origin and supply chain are key to brand and product innovation, and strengthening upstream is a good habit hema must adhere to in the face of new challenges that may arise from the new retail track.

enduro

Five years of new retail ups and downs, from crazy to rational, many players stood on the peak, and hard to fall gorgeous altar. Now, it seems that only those players who know how to survive, who can advance and retreat, can overcome these dangerous tests and survive to this day.

Hema is no exception, from the beginning of cautious testing water, to the middle of the savage acceleration, and then to the back of stability, finally become one of the industry benchmark, but also pay some necessary price.

Everyone can expand, as long as they have money, but the choice is actually the most difficult question in the new retail. Store closure and transformation, in fact, provide a very good strategic warning value, in the case of adjustment without hurting the core competitiveness, you can save more power.

Just like Wal-Mart, it has closed a number of stores in China in recent years, but it has not shaken its position as a global retail giant because the changes are rational, timely and necessary.

In today’s new retail track, there are fewer players, but the strong ones are still numerous. Costco, Sam’s, etc., are steadily expanding and deepening their brand influence, so they need a “big heart”.

In the past five years, Hema has explored and honed its brand strength, origin and supply chain, and dared to make choices. In fact, hema is building a strong heart that can support rapid innovation and steady expansion.

Now it seems that hema has preliminarily achieved its goal through this new retail endurance race lasting for five years. What the outside world sees is that hema is becoming more and more stable and will take root more and more.

Liu Kuang public account, ID: Liukuang110