Hema to hire idle restaurant staff as delivery demand surges

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New hires from restaurant chains working at a Hema store in Beijing. (Image credit: Hema)

Alibaba’s Hema grocery store unit is in talks with more than 30 restaurant chains in China to temporarily hire their employees to help meet surging demand for deliveries.

Why it matters: The current novel coronavirus outbreak is spurring staffing shortages in China’s food delivery industry as demand climbs from residents sequestered indoors. Meanwhile, employees at many restaurant chains sit idle.

  • Business interruption caused by the coronavirus outbreak has had an especially devastating impact on offline businesses and small- to medium-sized enterprises (SMEs).
  • Cooperation helps eliminate inefficiencies typical to normal workforce fluctuations.

Chinese tech firms ramp up support to battle outbreak

Details: Hema is hiring nearly 2,000 employees from more than 30 restaurant chains including Mystic South Yunnan Ethnic Cuisine and Youth Restaurant, Xibei Restaurant, South Memory, and Shudaxia Hotpot.

  • The cooperation will be applicable to employees in major cities like Beijing, Shanghai, Hangzhou, Nanjing, Xi’an, Shenzhen, Guangzhou and Kunming.
  • Hema will interview and train the potential new hires, and have them go through medical checkups.
  • The new temporary staff will work from Hema’s stores across the country for in-store jobs such as product packing, sorting, food preparation, and others. In-store jobs require less complicated training than delivery roles, Hu Qiugen, Hema’s managing director, told Chinese media.
  • There were 170 self-operated Hema stores in China as of Sept. 30, primarily in top-tier cities.
  • Human labor is a major cost for restaurant chains. For example, Xibei Restaurant chain operates more than 400 branches in 60 cities. Jia Guolong, its founder, told local media that nearly all of its restaurants have halted operations except for 100 locations that offer delivery services. The company’s workforce of more than 20,000 costs around RMB 150 million ($21 million) per month to employ. If the impact from the coronavirus epidemic continues, the company’s cash will only last three months, he added.

Context: Alibaba and other large Chinese tech firms been boosting their social responsibility efforts as they look to expand globally. Many of the measures are aimed toward supporting SMEs.

  • Meituan plans to offer no less than RMB 10 billion in low-interest loans to small- to mid-sized lifestyle merchants.
  • Separately, Ant Financial’s online commercial lender Mybank reduced interest rates for business loans by 10% for 1.8 million small business owners in Hubei province, where the outbreak was first reported and widely considered its epicenter.