Unconsciously, many well-established chain supermarkets have suddenly vanished without a trace.
Not long ago, Sam's Club released a long-term price reduction list, and with another price cut by Sam's, Hema has once again been pushed to the forefront of public attention. In fact, as two leading warehouse membership supermarkets in the domestic market, the competition between Hema and Sam's has a long history. Sam's Club is one of the pioneers in the warehouse membership supermarket sector, and Hema, as a pathfinder for Alibaba's new retail, is also regarded by Sam's as the only competitor in China. Because of this, there is a strong sense of rivalry between the two.
The intense competition between Hema and Sam's is on the brink of eruption. Hema is seeking a breakthrough, while Sam's needs to maintain its advantage. Therefore, in order to win the hearts of consumers and achieve their own goals, Hema and Sam's have each displayed their "full range of skills" and engaged in a fierce struggle in the "people, goods, and place" aspects.
Snatching users: Each with its own tricks
As we all know, Hema and Sam's are two highly watched brands in the fresh e-commerce field. As the competition for customer flow among new retail enterprises becomes more intense, the newcomer Hema is particularly fond of acquiring customers, while the pioneer Sam's places more emphasis on retaining customers. Hema wants to attract users with "civilian-level" prices, while Sam's aims to enhance user stickiness through its membership system. However, whether for acquiring or retaining customers, the fierce competition for users between Hema and Sam's is inevitable.
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Firstly, Hema and Sam's attract users to join through low-price strategies, which can help them gain more consumer attention in the competitive market. Ultimate pricing can stimulate shopping desires, thereby increasing the average customer spend. Recently, Hema's "mountain-moving price," "discountization," and "compensation for high prices" and other low-price measures have been introduced one after another, attracting more and more consumers. It is reported that since the launch of the "mountain-moving price," the weekly average DAU of the Hema app has increased by about 13.3%. Sam's is also attracting users with low-price strategies and providing them with more favorable prices and services, including low-priced goods, exclusive discounts, and member cashback, among other member benefits.
Secondly, Hema and Sam's strengthen user retention through their membership systems, which can help to enhance user stickiness and loyalty to a certain extent. Hema's membership system is divided into free members and paid members, with free members enjoying some discounts and services, while paid members enjoy more benefits, such as member prices and free delivery. Sam's membership system is mainly divided into regular members and premium members, with premium members enjoying more discounts and services. It is through their membership systems that Hema and Sam's have explored new business models and brought a brand-new shopping experience to users.
Thirdly, Hema and Sam's create new business formats to attract more users, which can effectively stimulate more new dynamics from consumers. Hema has never given up looking for possibilities in business formats, launching new formats such as Hema Fresh stores, X Member stores, and Hema Outlets, which are popular with young consumers. It is understood that Hema's cumulative registered user base has exceeded 60 million, and user stickiness is quite high. Sam's has also created a new business format of large warehouse-style membership stores through its low-price membership system, and its rich product range and low-price strategy have also attracted the attention of many young users.
However, although Hema and Sam's are full of tricks in competing for users, they also face shortcomings and challenges. Specifically, Hema's smart stores can attract some young users, but it is not easy to promote them in small cities; moreover, Hema may also face competition from local fresh e-commerce or traditional supermarkets, whose local roots and user resources are deeper, and the competitive pressure on Hema should not be underestimated. In addition, Sam's membership system may lack appeal to some consumers; and compared to local brands or other competitors, Sam's brand recognition is lower, which will lead to some difficulties in user acquisition in certain areas. Therefore, Hema and Sam's still need to continuously improve their own user appeal and loyalty to withstand the challenges of competitors.Competing for Supply: Showcasing Their Prowess
As the fresh e-commerce industry continues to evolve and competition intensifies, consumer demand for products is also on the rise. Consequently, delivering higher quality goods and a more convenient shopping experience for users has become a common understanding within the industry. Hema and Sam's, as leading enterprises in the fresh e-commerce sector, have been continuously making moves in product categories, brands, and supply chains. Clearly, to compete for supply sources, Hema and Sam's have pulled out all the stops.
Firstly, Hema and Sam's have vigorously expanded their product categories to enrich the types of goods available, which helps to provide users with a more diverse selection of products. Hema is committed to creating a one-stop lifestyle shopping platform, offering not only traditional fresh products such as fruits, vegetables, and meats but also expanding into categories like beverages, snacks, and home goods to meet users' comprehensive shopping needs. With its exceptional product selection capabilities, Sam's offers a wide range of products, including not only fresh food but also daily necessities, home goods, electronic products, and more. It is reported that Sam's has 4,000 SKUs available both online and offline.
Secondly, Hema and Sam's have launched several private brands to improve product quality, which helps to bring more sales opportunities and consumer trust. Hema has introduced multiple private brands covering various categories such as fresh food, snacks, and condiments. By establishing its own brands like Hema Workshop and Hema Daily Fresh, Hema has gained a higher market competitiveness. Sam's has also launched private brands like Member's Mark, which are characterized by their high quality and affordable prices, and have been well-received and loved by users. It is known that Sam's currently has about 800 branded products, accounting for 20% of the total available SKUs.
Thirdly, Hema and Sam's have built their own supply chain systems to ensure the logistics of goods, which helps to provide consumers with a one-stop shopping experience. Hema has established its own supply chain system and cold chain logistics network, achieving full-process control from the source to the store. By cooperating with farmers and producers, Hema has realized direct sourcing from the source and supply chain optimization, ensuring the freshness and quality of the products. Sam's, on the other hand, has a vast warehousing system and supply chain network. Through global procurement and its own brands, it has achieved high-quality control and supply assurance of products, and its strong supply chain system also provides users with a rich and diverse selection of products.
However, Hema and Sam's continuous attempts at innovation may bring new opportunities, but they may also bring unprecedented pressure and challenges. For example, fresh products have their particularities, and the stability of Hema's supply chain may be affected to some extent. Moreover, to ensure the quality and freshness of the supply, Hema may need to invest more costs, which will put pressure on its profit margin. In addition, Sam's large warehouse-style stores also require a large amount of fresh supply, but ensuring the freshness and quality of the supply may face certain challenges. Furthermore, due to the high operating costs of large stores, Sam's may also face the pressure of cost control. Therefore, Hema and Sam's still need to continuously adjust and optimize their products and supply chain services to ensure the stability and reliability of the supply.
Dominating the Business Circle: Each Doing Their Best
For Hema and Sam's, to achieve large-scale profits, retail scaling is their constant way out. Therefore, how to establish their brand image, expand their market position, and enhance their core competitiveness in the vast market has become a common challenge faced by these two companies. To cover a larger market, Hema and Sam's have long been fiercely competing for business circles.
On the one hand, Hema and Sam's have accelerated their store opening pace, which can bring huge traffic and vitality to the business circle. Hema is committed to creating a fresh e-commerce ecosystem and adopts the strategy of "one store, one city," actively and aggressively opening stores to compete for market share in the business circle. Public information shows that, to date, Hema Xiansheng stores have exceeded 350. Sam's also relies on its large warehouse-style membership store model to open stores in various business circles to drive their vitality and development. It is reported that Sam's is accelerating the plan to open 6-7 new stores each year and has entered second-tier and third-tier cities such as Kunshan, Dongguan, Jiaxing, Shaoxing, Jinan, Wenzhou, and Jinjiang.On the other hand, Hema and Sam's have constructed high-frequency scenarios, which can also bring more business opportunities and development space for merchants. Hema, by creating a variety of shopping scenarios, has attracted numerous visitors. The dining area, coffee bar, and other high-frequency consumption scenarios set up in its smart stores have attracted consumers to stay and shop, increasing the popularity and traffic of the business district. Sam's, leveraging the advantages of large warehouse-style membership stores, has become an important part of some business districts. Its membership stores are equipped with multiple shopping areas, covering a variety of categories such as fresh food, daily necessities, and home supplies, and have a strong influence in major business districts.
However, new scenarios also face new problems, and it is not easy for Hema and Sam's to conquer new markets. For Hema, the smart store and community service center model requires adaptive adjustments in different business districts, which necessitates more human and resource investment. For Sam's, it may face the challenge of insufficient brand influence in some areas, leading to a lower market share. Moreover, due to the presence of local brands and other competitors, Hema and Sam's may face fierce competition in certain business districts. Therefore, both need to strengthen brand promotion and market promotion, enhance brand influence and reputation, to attract more consumers to shop, thereby enhancing their competitive advantage in the business district.
Differentiation may become the key to future competition.
At present, in the retail field, the warehouse membership supermarket, as an emerging business model, has already entered people's lives. Hema and Sam's, as two giants in the industry, have also occupied an important position in the hearts of consumers. The reason why Hema and Sam's can become industry leaders and compete fiercely in the new retail track is closely related to their differentiated positioning. It can even be said that differentiated competition will also become the key to the future development of new retail players.
Firstly, differentiated positioning can distinguish a company from its competitors, which is conducive to improving its market competitiveness. For example, Hema is characterized by an integrated online and offline, intelligent model. Its smart stores and community service centers focus on user experience and service quality, attracting a large number of young consumers. Sam's is characterized by large warehouse-style membership stores, focusing on the richness of product categories and price benefits. Its membership system and preferential policies have also attracted a large number of families and merchants to join. It is precisely because of the differentiated positioning of the two that they can continue to attract users and maintain a competitive advantage in the market.
Secondly, product differentiation can increase the added value of products, which is conducive to bringing users higher quality and cost-effective products. Hema focuses on the introduction of high-quality fresh products and specialty products, creating a variety of shopping scenarios. Its self-built brand and direct procurement model ensure the quality and freshness of the products. Sam's product categories are rich, including not only fresh food but also daily necessities, home supplies, and other categories. Its own brand and global procurement model also ensure the quality and competitive price of the products. It is because of the continuous progress and realization of product differentiation that the two have become an important choice in the minds of consumers.
Finally, service differentiation can better meet the diverse needs of users, which is conducive to improving user satisfaction and loyalty. Hema provides consumers with comprehensive shopping services and experiences through intelligent technology and community service centers. Its fast delivery speed and high service quality have also won the favor of many users. Sam's focuses on member services and user experience, providing members with more discounts and privileges. Its membership system and return policy also meet the special needs of some customers. It is through service differentiation that Hema and Sam's can stand out among many players.
In summary, no matter what advantages Hema and Sam's have, they can stand out in the end because they have a profound grasp of the core of competition - differentiated value. Therefore, if Hema and Sam's want to continue to maintain their market position and truly win the future competition, they need to work harder on differentiation. In addition, it is worth noting that although the two are currently in the same track and will inevitably become more and more similar, they still need to maintain their own characteristics while learning from their opponents. In the future where competition intensifies, how to break through in the fierce competition is not only a question that Hema and Sam's need to consider, but also a common issue that the entire retail industry needs to face.