Construction underway at Freshippo's first self-built distribution center in China
Alibaba Group’s high-tech grocery chain Freshippo has unveiled plans to launch a next-generation distribution center in early 2022, kickstarting a rollout of the innovative hubs across the country.
Construction is underway at the new 150,000-square-meter facility in Wuhan, central China, with roofing work expected to be completed by the end of this month.
The distribution center is designed to supercharge Freshippo’s New Retail model, seamlessly blending online and offline shopping. Aside from the typical warehousing, packaging and delivery services, the new facility will come complete with indoor holding facilities for live seafood, cold-storage rooms, food-processing equipment and a centralized kitchen, the firm said last week.
“Integrating supply-chain facilities can greatly enhance efficiency,” explained Hao Jingbin, who oversees the distribution center’s development for Freshippo. Hao said it has become critical for the company to transform its supply chain to keep up with consumers’ demands for freshness and high-quality produce.
Freshippo plans to roll out similar distribution centers across China over the next few years, including in Chengdu, Shanghai, Hangzhou, Guangzhou and Xian. This upgraded network would help the supermarket ensure the safe and speedy handling of fresh produce as they’re transported across the country, such as crabs from China’s east coast and lychee fruit from the tropical island province of Hainan.
Freshippo’s partners among retailers and suppliers will be able to use the facilities as well, including the young, emerging brands that the supermarket has been incubating via its “Freshippo Xccelerator” initiative. Launched in May, the accelerator program brings together resources within Freshippo’s ecosystem to offer end-to-end support to promising new brands, including in funding, marketing, product development and supply-chain management.
The distribution centers will also help drive Freshippo’s rollout of product offerings, including “ready to cook, ready to heat, ready to eat” – a category expected to grow as Chinese consumers increasingly shift towards eating at home following the pandemic.
Freshippo CEO Hou Yi said the company sources and selects products for consumers based on their preferences. Chinese consumers are no longer devoted to big-name brands or bargains, but instead, they are prioritizing quality products and are starting to pay more attention to their health.
“This quality upgrade has become a mainstream trend in consumption,” he said.
Freshippo has nearly 300 stores in China. Not all of them are purely supermarkets: some stores come in new and innovative formats tailored to the needs of different consumers across the country. Freshippo’s portfolio of new retail concepts now includes everything from convenience stores, breakfast pick-up stations, members-only hypermarkets to a fully fledged shopping mall.
While Freshippo is known for its futuristic store experiences – everything from its fast-running conveyor belts, self-checkout kiosks, robot restaurants, to 30-minute online delivery options – it’s not stopping there.
“The upgraded distribution centers will not just provide a boost to our capabilities, they are also a part of our effort to build a possible blueprint for New Retail infrastructures,” Alibaba’s Hao Jingbin added.
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