Alibaba’s grocery arm Freshippo, also called Hema, has corrected its course after founder Hou Yi stepped down as CEO last month. On 17 April, the first wave of changes since the new CEO, former company CFO Yan Xiaolei took over came in the form of an announcement on the Freshippo app. From 24 April onwards, the Freshippo X gold and diamond membership will resume new applications and fee top-ups, marking the return of the membership strategy previously thought to have been abandoned.
The renewed membership will be trialled at a Freshippo X membership store in Nanjing on 20 April before being available across the country on 24 April. The new members or those topping up after 24 April will be able to choose between Monday and Thursday as their membership day of the week, on which they will get 12% off. Gold members can earn 1% cash back for future purchases and both gold and diamond members will receive a birthday gift every year.
Since April, Freshippo has quietly ended the offline-only lower prices, bringing uniformity to the prices of both online and offline channels. This addresses Freshippo’s earlier focus on discounts and low prices on these channels. The move made regular prices so low that with the offline special prices, membership perks were rendered meaningless. X membership fee top-up stopped last December as the original plan was after all prices had been lowered, there would be no need for a membership price.
To some, this adjustment might seem to be another trial-and-error as Freshippo refocuses on higher-value clientele by bringing back memberships and competing with the likes of Sam’s Club and Costco. However, as regular Freshippo continues to expand, with its plans to open 70 new stores across tier 1 and 2 cities, discounts and low prices are likely to stay. It will be interesting to see how Freshippo reconciles membership and lower prices after all this time.
