Hi,
1 - Smtp error
User not local
The joomla configuration for the smtp should be correct yes but it does not allow you to send external emails.
Your SMTP server does not authorize you to send emails to the domain "126.com".
Please see it directly with the manager of the smtp server, but HikaMarket won't be the only component which will have an error if your SMTP server does not accept emails address which are not local.
2 -
Thumbnail generation
Please check that the folder "media/com_hikashop/upload/thumbnails/" have write permissions.
HikaShop is trying to generate some thumbnails in this folder for your images but if it can't create image files into it, you will have "broken" images in your side.
You should have a folder "media/com_hikashop/upload/thumbnails/50x50" (or "50x50fsO") with the generated thubmnails.
Regards,