Hema Xiansheng, the grocery brand affiliated with Alibaba’s Freshippo supermarket chain, aims to transform approximately 350 offline stores into discount supermarkets by the Chinese New Year in 2024. This noteworthy adjustment, anticipated to slash prices on over 5,000 items by an average of 20%, is set to extend to online orders in the future, as reported by local media outlet 36Kr, citing Freshippo. The implementation of these discounts is facilitated by a more direct supply chain, mirroring the approach of competitors such as Sam’s Club and Costco, renowned for their members-only models, by cutting costs through the elimination of intermediary transactions. Since initiating a price war with Sam’s Club in early August, Freshippo has experienced a notable 13.3% growth in average weekly DAU (Daily Active Users), signaling a strategic move to enhance its market share, particularly in light of potential profitability challenges amid considerations for an IPO. [36Kr, in Chinese]
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