In the New Year's Day of 2026, the all-staff letter from Hema CEO Yan Xiaolei instantly went viral in the retail circle, evoking deep emotions among many industry veterans.
Yan Xiaolei disclosed in the letter that Hema's overall revenue in 2025 increased by over 40% year-on-year, with both Hema Fresh and Super Hema NB dual formats serving more than 100 million consumers. On January 6, Hema informed Caijing Tianxia that based on revenue growth and GMV projections for 2025, Hema's GMV is expected to exceed 100 billion yuan by the end of the fiscal year in March 2026.
This comes less than two years after the leadership change at Hema. Yan Xiaolei took over as CEO in March 2024 and set the ambitious goal of "reaching the 100-billion-yuan scale" by the end of that year, a target now on the verge of realization.
When Yan Xiaolei took over from founder Hou Yi, Hema was in a downturn, with revenue growth hitting a historic low of 9% and no profitability for seven consecutive years. In her first year as CEO, Yan led Hema to achieve profitability for nine consecutive months and double-digit growth, now poised to cross the 100-billion-yuan threshold. How did she accomplish this?
This is closely tied to Hema stepping on the accelerator. In 2025, Hema Fresh entered 40 new cities, opening its first stores in Ma'anshan, Linyi, Lishui, Yantai, Suining, Cixi, and others, while Super Hema NB opened over 200 new stores. As of now, Hema Fresh has approximately 500 stores, and Super Hema NB has around 400 stores. Compared to 2024 data, Hema Fresh has opened 70-80 stores annually for two consecutive years, a stark contrast to previous store closures.
Li Le, a veteran in the supermarket industry, shared: "One month after the opening of Hema's first store in Tianjin at Joy City, daily sales reached 1 million yuan, and a second store will open in Tianjin." In cities like Shijiazhuang, Luoyang, Nanyang, and Yibin, Hema Fresh stores were packed from day one. In Zhongshan, Zhuhai, and Dongguan, Hema Fresh stores outperformed those in first-tier cities like Beijing, Shanghai, Guangzhou, and Shenzhen across key metrics such as foot traffic, transaction volume, and table turnover rate.
Zhuang Shuai, founder of Bailian Consulting, believes that Hema's success in 2025 stems from strategic focus, primarily targeting Hema Fresh's large supermarket stores and Super Hema NB's hard-discount community stores as the two main formats.
The deeper reason lies in the "dual-line下沉" (dual-line下沉) strategy repeatedly mentioned in Yan Xiaolei's internal letter. According to Caijing Tianxia's analysis of Hema's new store openings, over the past year, only 30% of new Hema Fresh stores were in first- and second-tier cities, while 70% were in third- and fourth-tier cities and county markets, becoming the main force of expansion. Among the 200 new Super Hema NB stores, 80% (about 160 stores) were in third- and fourth-tier cities and county markets, focusing on下沉 markets and community penetration, with only 20% (about 40 stores) in first- and second-tier cities.
Hema's dual-line下沉 strategy reflects an insight into the structural changes in China's consumer market. Currently, the rise of emerging cities has become a key indicator of China's economic transformation, especially non-first-tier markets represented by third- and fourth-tier cities, which exhibit strong vitality. Hema believes that people are not unwilling to spend but want to buy happily and worthily, particularly in emerging cities.
The key to Hema's 100-billion-yuan revenue also comes from synergy with the Alibaba ecosystem. In 2025, after a successful pilot, Hema's products were integrated into Taobao Flash Sales and expanded rapidly to all stores nationwide. Over the past year, daily orders generated through Taobao once exceeded 2 million, a year-on-year increase of over 70%. During major promotions like "Double 11" and "618," Hema's sales on Taobao were 3-5 times higher than usual.
In addition, the rapid expansion of front-end warehouses has accelerated Hema's journey to the 100-billion-yuan scale.
"I don't live in a 'Hema zone,' but I can still buy from Hema." Tianjin consumer Wang Tian should have been excluded from Hema's 30-minute delivery service, but this winter, when she opened the Hema App, she suddenly found she could not only shop but also enjoy half-hour delivery.
This change stems from the rapid expansion of Hema's front-end warehouses in 2025, with a new one opening near Wang Tian's home. Front-end warehouses are small to medium-sized storage points set up near communities, not open to the public, specifically handling online orders for fast delivery.
As a Hema supplier, Guo Ren's biggest observation over the past year is the increase in Hema's online orders and more diverse demand. "We used to mainly supply Hema Fresh stores; now we have added orders for front-end warehouses," Guo Ren told Caijing Tianxia.
Hema's attitude toward front-end warehouses has undergone self-reform. In 2019, founder Hou Yi halted the front-end warehouse business, stating bluntly: "Front-end warehouses are a pseudo-proposition for VCs and cannot be profitable." At that time, Hema championed the "store-warehouse integration" model,坚信 only offline stores could承载 the experience and traffic for fresh goods.
"The front-end warehouse model has irreconcilable contradictions in product strength, cost structure, and profitability," said former Hema employee Li Wei. At that time, major players like MissFresh and Dingdong Maicai were sustaining huge losses, with high fulfillment cost ratios even exceeding gross margins.
However, in less than six years, Hema not only restarted but accelerated the布局 of front-end warehouses. By December 2025, Hema had about 200 operational front-end warehouses nationwide,冲刺 toward a target of 300 for the year. This shift is driven by changing market conditions. Since 2023, "30-minute delivery" has become the standard in retail. Although Hema Fresh has high coverage, it is limited by a 3-kilometer radius, creating service盲区.
Wang Tian previously preferred ordering from Xiaoxiang Supermarket: "Although the product variety isn't as rich, the delivery is fast." According to Meituan's financial reports, as early as Q3 2024, Xiaoxiang Supermarket had established 2,000 front-end warehouses nationwide. This means that in the same city, Xiaoxiang's front-end warehouses outnumbered Hema Fresh's by several times. With a delivery range of about 1.5 kilometers compared to Hema Fresh's 3 kilometers, Xiaoxiang achieved higher community penetration density. Clearly, Hema was lagging behind competitors at that time.
After integrating with Taobao Flash Sales, Hema's front-end warehouses reached a turning point. Hema needed more efficient and economical ways to handle and convert massive online orders. Unlike Hema Fresh, which focuses on quality, front-end warehouses target different消费 scenarios and customer groups, serving "the mouths of urban youth" – primarily singles, young couples living alone, who prioritize convenience and efficiency.
"Front-end warehouses focus on efficiently turned-over standard products, picked and packed within the warehouse, offering high efficiency and effectively complementing areas not covered by store delivery," Zhuang Shuai noted.
Hema stated that, leveraging front-end warehouses and offline stores, it has created an innovative online-offline service system, including pioneering home delivery, raw-cooked联动, a comprehensive membership system, and online customer support,颠覆 traditional models.
In 2025, amid explosive online traffic growth, front-end warehouses played a key role as traffic buffers and order分流器. "Compared to traditional stores, front-end warehouses are designed specifically for online orders, with layouts, picking processes, and packing areas optimized for e-commerce. A single front-end warehouse can handle 2-3 times the daily orders of a traditional store," Li Wei admitted.
During "Double 11," Hema's front-end warehouse network processed over 3 million orders in a single day. Despite Hou Yi's past skepticism, Hema is not a pure front-end warehouse player but deeply integrates its store network with the supply chain, ultimately driving the 100-billion-yuan scale effect.
Although Hema is狂卖 100 billion yuan annually and has clear future plans, from Yan Xiaolei's perspective, she cannot afford to be complacent.
"Nine consecutive months of profitability" is the report card Yan Xiaolei most frequently cited in 2025. Several former Hema employees revealed that this was primarily achieved through "关停并转" (closures, suspensions, mergers, and transfers). Li Wei said Hema heavily emphasizes KPIs, with increasingly detailed store metrics – from gross margin and loss rates to labor efficiency – each number dissected to the extreme.
Since Yan became CEO, Hema also underwent a thorough finance-oriented reform. For example, unprofitable businesses were cut: in August 2025, Hema closed its last X Membership store, marking the complete failure of the membership store strategy once对标 Sam's Club. This decision had immediate financial impact: each X Membership store had an annual rent of 30 million yuan and labor costs of 20 million yuan; closing them directly reduced the company's burden.
Under pressure, "Hema strictly controlled store staff numbers, and overtime became the norm," Li Wei continued. Since 2024, many Hema employees have been transitioned to third-party outsourcing. The scope of outsourcing expanded continuously, from warehousing and delivery personnel to some store staff. By 2025, outsourcing was fully implemented within Hema.
Not only frontline staff but also some back-office support roles began experimenting with outsourcing. To ensure service quality, Hema even established strict outsourcing management systems. Industry insiders estimate that if 25%-35% of Hema's peak workforce of nearly 100,000 employees were transitioned to outsourcing, it could save approximately 450-750 million yuan annually in labor costs.
Under comprehensive strategic adjustments, Hema achieved full-year profitability in FY2025 (April 1, 2024, to March 31, 2025). However, the industry questions whether this profitability, reliant on "关停并转," is sustainable. Caijing Tianxia's analysis identifies three positive factors supporting Hema's sustained profitability:
Concentrating resources on Hema Fresh and Super Hema NB has improved operational efficiency; using the "Hema Brain" system for智能选品补货 reduced inventory turnover days to 28 days, increased the proportion of 30-minute delivery orders to 89%, and controlled operational costs; integrating with Taobao Flash Sales and the 88VIP membership system significantly reduced customer acquisition costs. Additionally, Hema launched the "合盒共生" plan to support suppliers and deepened supply chain resilience to ensure sustainable profitability.
There are also three potential risks that could动摇 Hema's sustained profitability. "After Super Hema NB opened加盟, management difficulty increased, potentially leading to new resource consumption and quality control risks," Li Wei believes. Hema's competitors are also attacking on all fronts. While international giants like Sam's Club and Costco firmly hold the high-end market, local players like Meituan and JD.com are accelerating their offline retail布局.
In下沉 markets, Super Hema NB faces equally severe challenges, needing to fight price wars with regional retailers while also countering emerging hard-discount brands. This means Yan Xiaolei, leading Hema's charge, is fighting a two-front war. On one hand, she must defend against Sam's Club and Costco's penetration in the high-end market; on the other, she must应对 the siege by regional retailers in下沉 markets. Internally, Yan must balance multiple relationships: quality vs. cost, direct operation vs.加盟, expansion vs. profitability.
For instance, consumers in下沉 markets are highly price-sensitive but not necessarily willing to accept low quality. Maintaining price competitiveness while ensuring quality is a major challenge. Despite establishing inspection labs and other quality防线, Hema has experienced several notable food safety incidents since early 2025.
In Li Wei's view, any food safety incident directly impacts brand reputation and profits. As an ordinary consumer, Wang Tian still cares most about the safety of the food on her table without worry. Each time Hema trends on social media due to food safety issues, Wang Tian's feelings shift from initial shock, to hesitation, to growing concern – a process that erodes her trust in Hema.
Wang Tian also understands that for a retail enterprise, supply chains are complex, and absolute "zero risk" might not exist. However, this cannot fully justify quality fluctuations. After all, trust takes years to build but can collapse in an instant.
(The names Wang Tian, Guo Ren, Li Wei, and Li Le in the article are pseudonyms.)
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