It has been 5 months since Freshippo, also known as Hema, parted ways with its founder Hou Yi and welcomed its current CEO Yan Xiaolei. Recently, there has been several reports on the profitability of Freshippo, the aftermath of restructuring, as well as the continued rumours about Alibaba preparing to sell off the supermarket branch.
Yan has reportedly addressed the rumours directly in several employee meetings advising that Freshippo is not for sale. Yan has also set out a mid-term goal of growing its GMV (Gross Merchandise Value) to 100 billion RMB (13.98 billion USD) in 3 years, up 69% from 2023. Notably, the company achieved profitability for a consecutive 4-month period between March and June this year, which includes an off-season profit, a first for Freshippo. The last time it turned a continuous profit was in Q1 2023 before taking a loss due to the low-price discount strategy introduced in H2 2023.
Freshippo has turned its focus to its core “Xiansheng” stores and the local lifestyle NB (Neighborhood Business) stores. With the latest franchising policy, Freshippo plans to open 70 Xiansheng stores this year and 300 NB discount stores before the end of FY 2025. As for the Hema X membership stores, once thought to be aiming at warehouse clubs such as Sam’s Club and Costco, are also slowing down, with two stores closed this year and no new location planned.
It would seem Freshippo is no longer chasing the footsteps of Sam’s Club and is trying to find its own way of navigating the ever-shifting retail landscape of China. With Yan stating that going public will be the natural next step after reaching its three-year goal, the brand has more reason to feel hopeful. In other news, Hou Yi, the retired founder and former CEO is reported to have started his next project, a 60 RMB per person (8.38 USD) seafood barbeque restaurant in Shanghai called Oyster Bistro.
