Hong Kong-listed Shirble Department Store Holdings is looking to its new partnership with Alibaba’s Hema supermarket concept to help boost lacklustre sales.

The company has declared group revenue of RMB602.1 million (US$87.6 million)  for the first half year, 8.9 per cent down on the same period last year and profit attributable to shareholders was down 63.4 per cent to RMB14.9 million ($2.16 million). Much of the decline was due to the closure of the Wanxiang Store upon the expiry of its lease and a write-off of costs associated with the conversion of store space to the Hema format.

Shirble Department Store has 19 stores, including supermarkets, with a total gross floor area of 342,955sqm.

In June, Shirble signed a partnership with Alibaba to open Hema Fresh Supermarkets inside its stores.

“Based on the information provided by Hema, it can deliver online orders within 30 minutes to customers within a 3km radius of a Hema physical store, and offers a mobile app that allows consumers to research products and shop while browsing the store,” explained Shirble Department Store chairman Yang Xiangbo.

“The group believes that the business will enjoy long-term development in the foreseeable future and provide customers with more convenient and express services.”

Explaining the decision to partner with Hema, he said the fast development of online retail platforms has created challenges for chain store operators.

“Although the group has its own online retail platform, the operation scale is restricted to the local population in Shenzhen. In addition, the latest combination of online-to-offline business concept creates new business model in retail business so that consumers can enjoy shopping experience at stores with the support of and the convenience provided by online purchase and payment facilities.”

Meanwhile, Yang says the group will also explore suitable locations to introduce the food and beverage business in other regions of the mainland.