Online giant blending offline and online grocery — and it's not Amazon

Alibaba Group Holding Ltd. has stepped up its efforts to combine physical retail with online in the supermarket space.

The Chinese e-commerce behemoth has opened three new membership supermarkets, under the Hema banner, in Beijing and Shanghai, that seamlessly blend offline features with physical retail. The shopping experience starts with a download of the Helma mobile app, which links up to a customer’s Taobao or Alipay account. Using the app, customers can shop from the their homes, and also order fresh food to have it prepared by the Hema chefs and delivered within 30 minutes.

Customers who prefer to shop in store can also select items to be cooked for carry-out, delivered to their nearby home or office, or they can eat it on the spot in the store’s dining area. Hema stores look like normal supermarkets, with a selection of packaged foods, produce, seafood, beverages and other goods. Every item has a scannable bar code, which yields price and product information, including its origin and backstory (if there is one.) Customers scan the code and complete their electronic purchase through Alipay at a checkout register before leaving the store.

The Hema user experience is enhanced through big data, according to Alibaba. Because customers shop through the Hema mobile app, every purchase is logged, and their preferences are saved, giving them a personalized product page.

"We believe the future of New Retail will be a harmonious integration of online and offline, and Hema is a prime example of this evolution that's taking place," said Daniel Zhang, CEO of Alibaba Group, said in a statement. "Hema is a showcase of the new business opportunities that emerge from online-offline integration.”

Since 2015, Alibaba has opened 13 Hema markets, with ten in Shanghai, two in Beijing, and one in Ningbo.