Unmanned checkout kiosks, mobile-scanned product details, fast-running fulfillment conveyor belts – these are just some of the things you’ll find at Freshippo, the New Retail-powered supermarket by Alibaba.
Since launching in 2016, the chain has brought grocery shopping into the digital era and has soared in popularity with Chinese consumers thanks to its mobile-first shopping experience, 30-minute delivery options and vast selection of products, including live seafood with cook-in-store options. Within a few years since creation, Freshippo has expanded to about 200 stores.
To expand its reach and capabilities in China, Freshippo has been experimenting with new store formats that cater to the needs of different consumers across the county. While the original supermarket concept remains at the heart of most Freshippo locations, the chain started to introduce new shopping experiences to its portfolio about two years after its initial launch.
The Freshippo brand now includes everything from convenience stores and breakfast pick-up stations to even a shopping mall. As a sign of just how quickly Alibaba is moving, five out of the six new store formats were launched in 2019 alone.
Freshippo’s Expanding Digital and Physical Footprint
By adapting to local shopping habits and needs, Freshippo’s new store formats allow the chain to expand its digitally enabled grocery-shopping experience to more segments of consumers, all with the same mobile app.
For example, Freshippo Farmers’ Markets cater to more price-sensitive consumers living in residential neighborhoods on the outskirts of top-tier cities. Similar to a traditional farmers’ market, there are fresh produce sold in bulk and daily essentials, but the experience is also upgraded with digitally enriched features and 30-minute delivery services.
WATCH: A Tour of Freshippo’s New Store Formats
Meanwhile, in lower-tier cities, where high-quality products are less accessible, Freshippo Mini stores – at approximately 300-500 square meters, or about one-tenth of the size of a regular Freshippo store – are designed to be set up to quickly scale to address the rising consumption demand of lower-tier markets in China without a significant investment of capital.
There’s also Freshippo Station, which fulfills fresh-produce orders for residents living in urban residential areas where Freshippo supermarket stores are not yet available. The station’s focus on fresh produce and a hyper-local delivery radius of 1.5 kilometers are designed to meet Chinese consumers’ demands for frequent, fast and fresh deliveries.
Other versatile formats, such as Freshippo F2 and Freshippo Pick’n Go, complement the original New Retail supermarket concept by providing customers with ready-to-eat foods. Freshippo F2, short for “Fast and Freshly Made,” offers lunch boxes and snacks for office workers in central urban business areas. Freshippo Pick’n Go is a breakfast stand that sells on-the-go Chinese and Western breakfast foods all day, addressing the demand by busy urban residents in China for quick and tasty take-out options.
From a Food Focus to Community Building
Having amassed a loyal following of Chinese consumers since its launch, the brand’s latest experiment, Freshippo Mall, expands the brand’s digital experience beyond food to address the full spectrum of consumers’ everyday needs.
The first Freshippo Mall opened in Shenzhen last November and is a 40,000-square-meter complex that provides everything from retail, entertainment and dining to education and cleaning services.
There are currently close to 60 tenants, including clothing shops, restaurants, drug stores, grocers, beauty parlors and recreational facilities for children – all connected through the Freshippo app, which offers consumers a digital discovery journey, mobile checkout and one-hour delivery within a 3-km radius.
Freshippo’s evolution tells a story of New Retail in action, digitizing the shopping experience in China – and quickly. Indeed, the supermarket’s speed of innovation is what differentiates it from its peers in the West. By developing new formats that span supermarkets, convenience stores, micro fulfillment stations, breakfast-service locations and shopping malls, Freshippo continues to explore ways to digitize different retail sectors and provide an blueprint for retailers in China and globally.
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