iStock.com/helen89
July 19, 2024
Can H Mart Become a Top Contender in the Grocery Arena?
H Mart, the biggest Asian-American supermarket chain in the United States, has just partnered with VTEX, a composable and complete commerce platform, and VML, a global creative agency, to enhance H Mart’s e-commerce operations.
This collaboration involved migrating H Mart from its legacy platform to VTEX’s modern SaaS commerce platform, consolidating its dry and fresh goods into a unified online experience. The new platform allows customers to order both shelf-stable and fresh products in a single cart and provides real-time inventory information.
“Our team really prioritized a quick go-to-market time to get our new online stores up and running, and VTEX and VML made it happen. They’ve been instrumental in our digital growth journey, helping us deliver the best online shopping experience to our diverse set of customers. We are excited about the future and the opportunities this new platform will bring to our customers.”
Vince Colatriano, Executive Vice President at H Mart, via PR Newswire
Key features of the new system include VTEX’s pick and pack app for efficient in-store order fulfillment, precise product visibility based on customer location, and integration with H Mart’s SAP ERP for inventory management and payment processing. This upgrade is part of H Mart’s broader digital transformation strategy, aimed at improving the online shopping experience and expanding its market presence.
Furthermore, H Mart has just recently announced a delivery partnership with Uber, which will expand its delivery services to 78 H Mart locations. This also means that customers will be able to order groceries from H Mart through the Uber Eats app via HMart.com powered by Uber Direct. Much like other grocery delivery services, H Mart will offer same-day, scheduled, and on-demand options.
In May, H Mart also announced that it is opening a new 16,860-square-foot food court at the American Dream complex in the Meadowlands, making it the largest H Mart food hall in the Northeast. The food hall will feature 11 diverse vendors offering various cuisines and specialties, including BBQ Chicken, Don Don Curry, Gold Miss, Gong Cha, Jeong’s Noodle, K-Town Hero, Let Them Talk, Sang’s Tofu & Grill, The Bao, Tous les Jours, and Wok Bar.
This expansion continues H Mart’s growth, with over 100 stores across 18 states. The company also purchased a large storefront in the Oceanview Village Shopping Center in San Francisco, California.
As of November 2023, the top 10 grocery companies by revenue according to Foodindustry.com are:
- Walmart Inc.
- The Kroger Co.
- Costco Wholesale Corporation
- Albertsons Cos. Inc.
- Ahold Delhaize USA
- Publix Super Markets Inc.
- H-E-B
- Amazon
- Target Corporation
- Meijer Inc.
Walmart is also upping the ante after announcing plans to boost its grocery network by building five high-tech perishable distribution centers in California, Illinois, New Jersey, South Carolina, and Texas. It is also automating four existing facilities and upgrading older ones to improve storage and processing.
If H Mart were to make its way up the rankings into the top 10, then it would be the only supermarket on the list that sells primarily Asian groceries and items.
Discussion Questions
What are the broader implications of H Mart’s enhanced e-commerce, expanded delivery services, and new food halls for customer experience and market reach in the grocery sector, particularly for stores offering ethnic or specialized products?
How might the integration of modern SaaS platforms like VTEX impact competitive dynamics among top grocery chains, especially with specialized retailers like H Mart expanding digitally?
With Walmart’s new high-tech distribution centers and automation upgrades, how could this redefine industry standards and challenge smaller or niche grocery retailers?
Poll
Loading …BrainTrust
David Biernbaum
Founder & President, David Biernbaum & Associates LLC
Karen Wong
Co-Founder & CEO, TakuLabs Ltd.
Trevor Sumner
Head of AI and Innovation, Raydiant
Recent Discussions
More Discussions
Will Target and ChatGPT’s Team-Up Actually Improve the Retailer’s Fortunes?
The Target app is hitting ChatGPT soon. Will it move the needle in Target’s favor?Are Second Screens Good or Bad for Engaging Consumers?
Conventional wisdom paints second screens as a marketing dead end. Is this accurate nowadays?Should Under Armour Have Broken Up With Steph Curry?
Under Armour is terminating its relationship with NBA star Steph Curry. Is this a smart move?
First, H Mart is not making its way into the top 10 in the near term. In terms of food revenue, there are loads of retailers above it. It would need to leapfrog retailers like Dollar General, Aldi, Trader Joe’s, Wakefern, Sprouts, Wegmans and so forth, which is a very tall order.
In terms of its latest developments, platforms like Uber Eats (or Instacart) are a great way for smaller chains like H Mart to get more deeply into ecommerce without massive capital outlay. Basically, they help level the playing field against the larger players. I think this is a good move for H Mart as it expands its reach and will potentially allow it to grow customer numbers.
H Mart doesn’t have enough stores to become a dominant player yet, but Neil’s suggestion of using delivery platforms is a solid one. They might also partner with larger chains to install mini Asian markets in their stores. Consumers who want to branch out and learn new cuisines might well be receptive.
Cathy, I agree with you and Neil, I don’t see H Mart being in the top 10 grocery companies anytime soon. Many stores in top ten have been in business for many decades and centuries and have built up a large amount of stores. I have been in a few H Mart stores- i love the perishable options but there are not really a complete shop for most customers. The delivery platforms addition is a plus for them. I like to micro store idea- may this could be a more viable idea?
H Mart’s enhanced e-commerce expanded delivery services, and new food halls significantly improve customer convenience and accessibility, setting new standards for ethnic and specialized grocery stores. Partnerships with platforms like Uber Eats help H Mart level the playing field, optimize systems for better product visibility, and improve efficiency. Additionally, integrating SaaS platforms like VTEX further boosts efficiency and customer experience, enabling H Mart to compete more effectively in the digital marketplace. In contrast, Walmart’s high-tech distribution centers and automation upgrades set new efficiency standards, pressuring smaller and niche retailers to innovate or risk falling behind.
The obvious implication is that as the Asian-american population grows, the potential for a chain that caters to it to become “major” grows acordingly (logically the greatest opportunity is in West Coast areas where the concentration(s) are the highest.) That having been said, as the AA base grows it may present an attractive target for mainstream retailers to broaden their offerings – perhaps just enough to undercut someone like H-Mart, tho probably not supplant it entirely – so there has to be a “sweet spot”, just big enough for economies-of-scale, but not so large as to attract competitors. I also wonder, to the extent that such self-identification remains a core part of the business model, if it might limit the appeal to the broader market…
SaaS and unified commerce platforms to make the customer experience more cohesive or quicker will continue to have big upside for grocers like H Mart, including many other specialty or regional grocers. It can also help differentiate them and help improve awareness of their products from around the world. If deployed right, they’ll also be able to operate closer to a level playing field with the largest chains who have already made investments in this area. This is good for H Marts potential growth, their customers, and the bottom line.
It is unlikely that H Mart will become a major player in the overall grocery industry, but it certainly will be a major player in the Asian market with further expansion.
As far as mainstream markets are concerned, I cannot see H Mart challenging Walmart, Kroger, Albertson’s, Target, Albertson’s, Ahold, or HEB or Meijer, at least not in the near future. However, in the United States, the Asian market accounts for 22 million Americans, or about 7% of our population.
In addition to offering a wide selection of Asian foods, specialties, and ingredients not readily available at Kroger or Albertsons, the Hanahreum Group is an excellent operator, that provides fresh fishes and other delicacies in their stores.
There are currently only 100 or so H Marts, and most of them are located in specific markets, so there is still much to be done. – Db
…and that 7% of the demographic includes Indian, Pakistani, and Bangladeshi. H Mart somewhat caters to those ethnicities, but their wheelhouse is Southeast Asians.
Step 1: get more people trying and loving Asian food through food halls and delivery services. It’s a far cry from liking Asian food to cooking Asian food well at home, so Step 2 is to expand grocery offerings but perhaps with a foray into demos or cooking classes first to establish familiarity and a comfort level in making Asian-inspired dishes at home? Put those food halls to good use!
H Mart has too far to go to crack the top 10 grocery retailers, but it’s unique selection of Asian Products will make it an interesting add to orders on aggregators like Instacart and Uber. Personally, I love H Mart. Their seafood offering and breadth is unique, just go check out the Tiger Shrimp, which are currently $28 / lbs. It will always be popular among Asian audiences, but will require an awareness campaign for those who want access to Asian groceries like the best chili crisp (it’s Lao Gan Ma), the beauty of pea shoots or chinese water spinach as some of the top sauteed greens, or access to better asian fruits like champagne mangoes and rambutan. Delivery will unlock foodies like me, but there’s a long way to go to expand the palette and culinary comfort of greater audiences.
H Mart is a unique and well-managed retailer. The worst thing they can do is try to grow out of their niche. They cater to their customers’ desires. Asians are the fastest-growing ethnicity in the U.S., only to be surpassed by the astonishing growth rate of multi-racial Asians, which is 55%. A serious consideration for H Mart is how fast the generations of immigrants adapt to the American diet and forgo the diet of thier parents and grandparents.
Enhancing thier e-commerce ability is critical to long-term survival as it is to any grocery retailer. In the next five to ten years, more and more people or any shopping proclivity will move to e-commerce, limiting their trips to the grocery store.
Although H Mart doesn’t have the scale to crack the top ten based on revenue, it absolutely can put itself at the top of this list from an ‘experience’ standpoint by creating amazing food hall moments with its Asian cuisine partners. Northgate Markets is doing this exact same thing in Southern California with its authentic Mexican ‘Mercados’ concept which is a resounding Home Run by any measure. Authenticity and food quality are two major keys to success. If H Mart can deliver incredible tasting food with an amazing atmosphere, then they have strategic roadmap full of opportunity.
They are some ways off from cracking the top ten, but their move to a unified commerce platform could be a major accelerator for growth. I look forward to the American Dream food hall. It’s just 20 minute from my home. Yum.
The integration of modern SaaS platforms is good for all existing or would be H Mart shoppers. But as others have stated, the broader implication isn’t their ranking in the list of top grocery companies where other much larger competitors already outrank them by sheer scale. If anything, this will help H Mart significantly improve the shopping experience with existing customers. Asian shoppers are used to modern SaaS/mobile platforms which are par for the course in Asia so they’re really playing catch-up to what their shoppers already expect.
It is a good move for HMart to expand since Korean culture is broadening widely through Kdrama and Kpop among new generation of shoppers. However that is a long way to being a top volume retailer to the masses and also by trying to be a broad appeal it will lose traction with its core constituents. Hmart need to continue to grow but let the demographic do the work for them without overreaching on categories.
Given how difficult it can be to find ethnic grocery stores in local markets, the addition of online shopping should be a benefit for consumers and H-Mart.
However, given the percentage of US population that shops predominantly Aaian grocery, H-Mart will need to ensure their new ecommerce platform is driving increment revenue and not just canabalizing in-store traffic.
It’s a long game for H-Mart to make it to the top 10 in US Grrocery, given the heavy hitters already on this list. But, done well, expanding their digital Commerce foot print could deliver new revenue streams and even more valuable, introduce the omnichannel consumer to H-Mart’s ecosystem.
Grocery is a low-margin business, so the unit economics of an e-commerce model mostly don’t work out. Add the picker, packer, and logistics costs, and the margins would go sub-zero. Unless you are a mega-retailer, relying on platforms like Uber Eats is a much smarter choice.
nice article.The Kroger Corporation created the branding website Krogarfeedback to assist consumers in completing surveys on the official KrogerFeedback website, www.kroger.com/feedback. In order to get feedback regarding the quality of their supermarket items and in-store services, Kroger uses Qualtrics XM and Krogarfeedback.org to promote KrogerFeedback and create www.kroger.com/feedback. Clients can report issues with our customer service by contacting our headquarters at 1014 Vine St. Cincinnati, OH 45202-1141, by email at admin@kroger.com, or by phone at 1-800-KRO-GERS (1-800-576-4377).
https://krogarfeedback.org/