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Alibaba exec: e-commerce giant plans Hema supermarket expansion within China

Alibaba Group Holding Ltd. has no plans to export its brick-and-mortar supermarket chain Hema to international markets and will focus instead on bringing international products to Chinese consumers, a company executive told a retail conference in New York on Jan.13.

Xulin Guo, chief of staff to Hema's CEO, speaking at the National Retail Federation's The Big Show event, touted the potential for the company's China-centric strategy.

"We're becoming the gateway to China for global brands," Guo said. "Currently over 40% of our products are imported, for example, we're currently the biggest retailer for Alaskan king crab, so the potential of [the] China market is huge."

Since its launch in 2016, Hema has opened over 100 stores across China with the recent promise of a 24-hour delivery service for online orders on the Hema mobile app. Guo added that Alibaba will continue to open Hema stores across China, but did not provide specific numbers.

Although Alibaba says it has no plans to expand its Hema stores into international markets, the supermarket chain is branded with an English name, "Freshippo" outside China.

At the NRF show, Alibaba showcased its self-checkout technology, which allows customers to scan their products and pay with the mobile Alipay app and facial recognition technology. Also on display was the conveyer belt that transfers orders from the store floor to the warehouse where they are packaged for delivery.

Every Hema store has a restaurant where customers can reserve a table by scanning a barcode, access the menu and make orders on the Hema app, and get served by robots that greet them after each delivery.

Alibaba is also partnering with other local retailers to bring the technology used in Hema locations to their stores. Guo said RT-Mart, one of the retailers adopting Hema's payment and fulfillment technology, has attracted more young customers because of it.

Although Alibaba recognizes its customers' strong demand for international products and says more than 40% of its products are from other countries, Guo said the company is not concerned about the ongoing trade tension between China and the U.S. primarily because its imports are not exclusively from the U.S.