Freshippo's membership store part of new retail trend

Ding Yining
Alibaba's supermarket chain will soon open its first membership store in Pudong, a move which comes as other consumer retail chains test new formats.
Ding Yining

Alibaba's Freshippo will unveil its first membership store on Thursday in Shanghai's Pudong New Area as consumers embrace new retail formats.

Freshippo has gained around 500,000 paying members in Shanghai since the scheme was first launched in 2018.

The company's annual plan costs 258 yuan (US$37), compared with 299 yuan at Costco and 99 yuan for an entry-level subscription plan at Metro.

Different from overseas retailers with big-box formats, Freshippo said its advantage lies in deeper understanding of local tastes.

"We want to try out different retail formats and collect user preferences and shopping behavior," said Zhao Jiayu, senior director of general merchandise at Freshippo.

Shanghai is hailed as a top destination for shopping and new retail formats.

Since the incubation of Freshippo in 2016 in Shanghai, it has added innovative formats such as Hema Mini and Pick'n Go to cater to demands for breakfast, fresh food and vegetable shopping and fast delivery. 

This was due to Pudong government's open mindset to encourage trial operations of new sales models such as the combination of catering and retail sales, according to Zhao.

Other retailers are adding new formats and membership stores vowed to offer high value for money for bulk purchases. 

Metro's Putuo District store completed renovations and upgrades last weekend, which will serve as a model for the adjustment and upgrade of 35 stores in China by 2023.

Metro also started trial operation of its online platform after Wumei Group completed an 80-percent purchase of Metro's China unit for 1 billion euros (US$1.17 billion). 

It has integrated Wumei's retail technology solution subsidiary Dmall into its offline operations with self-service checkout facilities first rolling out in Shanghai stores.

Adding a digital fulfillment center to it new store format allows the retailer to combine corporate customer solutions with delivery orders from retail shoppers.

Shoppers can also order from Dmall's application for delivery or self pickup order from eight existing Metro stores in Shanghai. 

Delivery service has become an essential part of the retailer's China strategy.

Meanwhile, Sam's Club said its domestic store has about 4,000 items. It expanded into fresh food home delivery in 2018, and now offers delivery services in 21 cities by using storefronts as dispatch centers and delivery stopovers.

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