Alibaba's Grocery Brand Hema Breaks Even Thanks To China's Covid Lockdowns

Alibaba's Grocery Brand Hema Breaks Even Thanks To China's Covid Lockdowns
  • Alibaba Group Holding Limited BABA supermarket chain Freshippo-owned grocery brand Hema Xiansheng broke even last year in China as Covid lockdowns boosted online sales of fresh produce, including vegetables, seafood, and meat. 
  • Sales of fresh foods at the chain, known in Chinese as Hema, were profitable after seven years of development, SCMP reports citing a letter to staff by Freshippo's CEO Hou Yi.
  • The break-even reflected that Alibaba's "new retailing is finally bearing fruit" after years of investments, putting Freshippo on track to serve 1 billion customers with an estimated sales value of 1 trillion yuan ($145 billion) over the next decade, Hou said.
  • Also Read: Tim Hortons's China Coffee Operator Bonds With Alibaba To Tap Country's Beverage Market
  • Alibaba created Freshippo to tap the supply chain prowess of Alibaba's e-commerce platforms, Taobao and Tmall.
  • China's fiercely competitive retail industry boasts internet-powered retailers like Meituan's MPNGF Maicai unit and Dingdong Maicai, contending to deliver fresh produce to consumers.
  • Freshippo will continue to source products from around the world to win customers, wrote Hou, who led a tour to Europe last month to search for boutique beers, drinking water, and chocolates.
  • Freshippo closed dozens of shops under the Hema Neighbourhood Business last year within months of opening them. 
  • The agility to adapt helped Freshippo generate healthy growth in its same-store sales and pared its losses, which "benefited" Alibaba's earnings in the September quarter.
  • Price Action: BABA shares traded higher by 8.25% at $99.62 on the last check Wednesday.

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