On August 22nd, it was reported that Hema Fresh has restarted the front-end warehouse mode abandoned four years ago in Shanghai, and is committed to providing consumers with fast delivery services within 3 kilometers and 30 minutes.
A spokesperson from Hema responded, "The news is true. However, it is not a new model or business model. In cities where Hema stores are already very dense, there are still some areas that fresh produce stores cannot temporarily cover. To further improve user experience, Hema will pilot the use of front warehouses to encrypt service radius and provide the fastest 30 minute delivery service for residents within a 3-kilometer radius
Pre warehouse refers to the model of establishing warehouses near communities, which is different from traditional warehouses that are far away from the final consumer group. This model can greatly improve timeliness while ensuring the freshness of fresh products, while saving operating costs compared to offline stores.
In 2019, Hema first attempted the front-end warehouse mode and opened over 70 Hema small stations. After a brief test of the waters, Hou Yi, the founder of Hema at the time, stated that pre positioned warehouses were a false proposition and could not be profitable.
At the end of 2019, Hema transformed its front warehouse into a community supermarket called Hema MINI. Hou Yi called it the "most perfect business model" because of the integration of store and warehouse. Inventory that cannot be sold online in the front warehouse can be sold at discounts in offline stores, and stores can also bring traffic online at lower costs.
However, due to the cost of millions for a single store, this model was quickly abandoned, and Hema turned to a lower cost community group buying self pickup model.
At present, in the instant retail industry, the top players in the market are Sam's Club and Meituan. Sam's Club has about 400 front warehouses in China and will contribute over 40 billion yuan in transaction volume in 2023; Meituan's total transaction volume in instant retail in 2023 is on the order of 200 billion yuan, and its flash purchase business currently has about 9000 flash warehouses; In the field of fresh e-commerce, Hema, Dingdong Maicai, Pupu Supermarket, and Meituan's Xiaoxiang Supermarket are the main players.
A Hema insider said that it was only after seeing Sam's performance that the internal team believed there was still a chance for the front-end warehouse. Compared to four years ago, Hema's online order forecasting and inventory management capabilities have greatly improved.
(Guo Peng, Time Weekly, comprehensive self owned by Caixin, later LatePost, IT Home)