Alibaba Group Holding is set to phase out its remaining Costco-style Hema X store, signaling a pullback from China’s competitive retail market.
Hema, Alibaba’s supermarket chain, has started closing its premium “Hema X” stores, which require an annual membership fee for access, a person familiar with the matter told Bloomberg.
The move is part of Alibaba’s efforts to boost overall profitability, the person said, requesting anonymity due to the private nature of the decision.
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The logo of Alibaba Group seen on a smartphone. Photo by Reuters |
This decision reflects a strategic withdrawal from a business model that struggled to compete with Walmart’s Sam’s Club and Costco Wholesale, both of which have gained popularity among Chinese shoppers seeking exclusive products and bulk deals.
It also aligns with Alibaba’s broader shift toward prioritizing AI development and competing with JD.com and PDD Holdings to capture consumers amid China’s economic slowdown.
Over the past year, Alibaba has been closing Hema X stores, reversing an expansion that started around 2020.
The launch of Hema X followed the opening of American supermarket chain Costco’s first location in the mainland in Shanghai in August 2019.
Initially Alibaba planned to open 100 Hema X stores in three years, according to Star News.
Local media reported that the final Hema X store in Shanghai will shut down on August 31, following the closure of three stores in Beijing and Jiangsu province in July.
Alibaba remains committed to expanding its core Hema chain, which introduced a supermarket model in 2015 that integrates fresh produce, a restaurant concept, and rapid delivery.
The company plans to open approximately 100 new Hema stores this year, according to the person.
