On the last day of 2024, it was reported that the CEO of the Alibaba-backed supermarket chain Freshippo (also known as Hema), Yan Xiaolei issued an internal letter to the supermarket’s employees regarding the company’s results in the past 9 months. The letter acknowledges the double-digit growth in revenue, as well as large expansion.
The correspondence points out that the brand has renewed 50% of its regular Freshippo stores and increased its customer base by over 50% in 2024. In the last year, Freshippo also opened 72 new locations, averaging one new store every 5 days, doubling the speed of 2023. It appointed over 200 new store managers across the country, as well as reforming pay for store manager positions. In the financial year of 2024, the chain earned 59 billion RMB (8.08 billion USD) in gross merchandise value (GMV), higher than the 55 billion RMB (7.53 billion USD) GMV in the previous financial year. 63% of the GMV this financial year was via online transactions.
Yan concluded in the letter that Freshippo has done three things right in the past nine months to achieve such impressive results: returning to value for customers, focusing on the direction of growth, and building the organisation. Some pundits believe that the results and measures mentioned in the letter show that Freshippo, since the departure of its founder Hou Yi and the then CFO Yan, who was named the new CEO in March 2024, has finally found its “Freshippo model” of the supermarket business.
Indeed, Yan had already achieved Freshippo’s first profitable “off-season” between March and June and started its profitable streak. When Yan was first named CEO back in March, many suspected that having the head of finance in charge meant Alibaba would be exploring the sale of the business. However, with the recent sale of Alibaba’s other retail business, the Sun Art Retail Group, owner of the RT-Mart supermarket chain, what Alibaba has in store for Freshippo is still unclear.
