Reports have started floating around that supermarket chain Hema Fresh, or Freshippo, has been lowering its prices in 81 stores in Beijing, Nanjing and Changsha following the Chinese New Year, both online and offline. Instore, price adjustments cover almost all categories from seafood to alcohol.
Prices also went down on various items on the Hema Fresh app. The catch, however, is that the threshold for free delivery has been raised from 49 RMB (6.81 USD) to 99 RMB (13.76 USD), orders that don’t qualify will need to pay an extra 6 RMB (0.83 USD) delivery fee. The topic “Hema raises free shipping threshold” reached number 2 on the Nanjing local Hot Search list on Weibo, China’s Twitter equivalent. But many have pointed out that the price drop makes up for the shipping in most cases.
The moves came after the company announced last October that it would be switching to a discount strategy by optimising its supply chain. Indeed, last June, it also experimented with its “mountain moving prices” (移山价, with the “山” being Sam’s Clubs’ first character in Chinese, this was widely interpreted as a direct aim at the warehouse club) where Hema adjusted the prices of many popular Sam’s Club’s items to be lower than the membership giant.
Since late last year, low prices and discounts has been a main drive for many retailers. All platforms including Taobao, Tmall and JD.com embraced low price and simple discounts for Double 11. The snack retailer Bestore lowered its prices for the first time in 17 years last December. Apart from adjusting its prices, Hema is also adjusting its brand line-up, such as allowing 1 free shipping a day and 12% off on Tuesdays and Wednesdays for its Store X members while membership lasts, as well as expanding its NB Outlet store coverage. The effects of the shift remains to be seen as the strategic transition of the chain is still underway.
