Hema, a Chinese grocery retailer and subsidiary of Alibaba Group, reported a gross merchandise volume of over 75 billion yuan (approximately US$10.5 billion) for fiscal year 2025. Online transactions made up more than 60% of the company’s total GMV.

By the end of the fiscal year, Hema operated over 420 stores across China. The company is focusing on expansion into emerging cities and counties. It recorded positive adjusted earnings before interest, taxes, and amortization (EBITA) for the first time.

Hema’s strategy included refining its business model to emphasize high-quality products and customer experience. This approach aligns with Alibaba’s efforts to strengthen its position in the competitive grocery sector.

Demand for online shopping and delivery services has increased significantly. As Hema aims for profitability, it faces competition from traditional retailers and other e-commerce players in China’s rapidly evolving market.

🔗 Source: Huxiu

🧠 Food for thought

1️⃣ Omnichannel grocery is leading retail growth globally

Hema’s report that online transactions contribute over 60% of its GMV aligns with the broader global shift toward digital grocery shopping that’s reshaping the industry.

U.S. eGrocery sales reached $9.7 billion in March 2025, marking a 21% year-over-year increase and the eighth consecutive month exceeding $9.5 billion in sales 1.

This digital shift is happening while maintaining physical presence, similar to Hema’s 420+ stores, as the grocery sector embraces hybrid models that combine online convenience with in-store experiences.

The trend toward omnichannel is particularly pronounced in delivery services, which have surged over 30% year-over-year and now account for 43% of eGrocery sales in the U.S. market 1.

Hema’s achievement of positive adjusted EBITA reflects a maturing business model that has successfully balanced digital and physical operations, which aligns with strategies pursued by leading retailers globally.

2️⃣ Emerging markets prioritizing value and experience amid economic pressures

Hema’s strategic focus on expanding into emerging cities and counties across China reflects a broader trend of retailers adapting to cost-conscious consumers seeking both value and experience.

With grocery prices forecasted to rise by 3.3% in 2025 according to industry reports, retailers are increasingly focusing on value-driven strategies to maintain customer loyalty 2.

This economic pressure is driving grocers to optimize their business models by refining product selection and enhancing customer experience while maintaining competitive pricing.

Recent Hema developments