Hema Xiansheng, the grocery brand under Alibaba Group Holding’s supermarket chain Freshippo, broke even last year in China when its sales of fresh produce including vegetables, seafood and meat via online applications were boosted during the country’s Covid-19 lockdowns and quarantines.
Sales of fresh foods at the chain, known in Chinese as Hema – homonyms that sound like the words for the hippopotamus – were profitable after seven years of development, according to a letter to staff by Freshippo’s chief executive Hou Yi.
The break-even showed that Alibaba’s “new retailing is finally bearing fruit” after years of investments, putting Freshippo on track to serve 1 billion customers with the estimated sales value of 1 trillion yuan (US$145 billion) over the next decade, Hou said, without divulging the company’s current customers and sales figures.
Freshippo was created to take advantage of the supply chain prowess of Alibaba’s e-commerce platforms Taobao and Tmall, offering consumers the convenience of online ordering with door-to-door deliveries and in-store dining. Over the years, it diversified into a range of services like the takeaway lunchboxes called Hema F2, its membership store Hema X, and the street-corner convenience store called Hema Mini.
An employee at a Freshippo outlet. Photo: Alibaba News
The break-even is a milestone in the new frontier of China’s fiercely competitive retail industry, where a number of internet-powered retailers like Meituan’s Maicai unit and the independently run Dingdong Maicai are vying to deliver fresh produce to consumers.
