FreshHema's First Collab Shop Fails
On April 1, He Xiao Ma shut down its first shop in Suzhou, a city in the south China.
On April 1, He Xiao Ma (盒小马) announced on its App that it will stop its online business from that day and its offline shop are undergoing clearance, reported by Win Shang, a Chinese media. According to He Xiao Ma's in-charge, the physical shop is closed and it will relocate and reopen in the latter half of 2019.
He Xiao Ma, founded in June 2018, is a lite version of FreshHema.
He Xiao Ma, the Chinese literal meaning of "little hippo(He Ma)" is a collaborated brand between Hema and RT-Mart (大润发), a large traditional supermarket chain invested by Alibaba.
He Xiao Ma will target consumers in tier 3-5 cities, while Hema is eyeing tier 1 to 2 cities.
On average, it is around one 800 meters squared. Fifty percent of the shops' areas are occupied by vegetables and fresh products. In a sense, Hema needs physical retail shops in a lighter and more flexible scale to help it exercise the new retail dream. Other than He Xiao Ma, Hema also launched F2, an even smaller shop with the area around 500 meters squared.
Number of stores
According to iYiou, the Chinese website of EqualOcean, there are 11 shops by the end of January.
Supply Chain & operation
Supply chain and operation will be managed by RT-Mart. It launched one-hour delivery powered by Tao Xian Da (淘鲜达). It operates like Hema meaning online to offline are integrated.
Its strengths can be achieved from the combination of extensive offline retail experiences from RT-Mart, data and advanced technology provided by Alibaba, and new retail supports from Hema.
RT-Mart is a supermarket chain starting from Taiwan. It entered the Chinese market in 1997. Now, it has around 400 physical shops in mainland China.
Alibaba operates the largest e-commerce platforms in China, namely Taobao and Tmall. Therefore, it has collected a large number of consumers behaviors data which could be used to do select and recommend products. In addition, it has invested heavily in technology such as AI and big data which could help make better use of raw data and increase business operation efficiency.
Since it is a lite version and targeting lower tier city residents. It has cut the expensive and fancy imported seafood and added many sporty goods such as football, basketball, volleyball, and swimsuits.
For the products, it is not much different from a traditional small-to-medium supermarket which includes vegetables, frozen products, Delhi, and dairy products and excludes home appliance and clothes.Thus, many believed that He Xiao Ma should be called little RT-Mart instead of "Little Hippo".
In terms of product selection, it will be powered big data from Alibaba platform and offline T-Mart shops (around 400).
What might cause the store to shut down
The first shop is located in the high-tech park area, a relatively new and developing area. Many residential and commercial buildings are still under construction. So, the consumption power in this business district is way lower than matures ones such as Guan Qian, Hu Dong, and Hu Xi or emerging ones like Mu Du and Tai Hu. The daily traffic and revenue generating abilities will be negatively affected. Secondly, it locates a bit far away from nearby communities.