Alibaba Freshippo opens its first wholesale store

Jiong-Jiong Yu
Senior Retail Analyst
@RetailAnalysis

Date : 30 September 2020

Joining the competition with Costco and Walmart’s Sam’s Club, the retailer opens its first membership-only wholesale store in Shanghai.

Challenging Sam’s Club and Costco

The new wholesale store, known as X store, opens in Shanghai on 1 October. Goods bought in the X store can be delivered in half a day if the customer lives within a 20-km radius from it.

We hope we can improve our capabilities quickly and effectively via directly competing with Costco and Sam’s Club,” said Hou Yi, president of Freshippo (better known as Hema in China) in a statement.

To differentiate from competitors, more than 40% of the X store's products are Freshippo’s exclusive products, including those from its private label range Hema MAX. 10% of the products are sourced overseas.

Nearly 10 different Freshippo formats

To cater for different customer needs, Alibaba has been actively rolling out various formats. To date, there are close to 10 different formats under the Freshippo banner. Supported by Alibaba’s cutting-edge retail technology, these innovative formats are all very different to conventional store concepts. More details can be found here in IGD’s previous news article. The membership-only X store is the latest addition.

X store’s potential rivals, Sam’s Club and Costco, have been both investing to strengthen their presence in the country:

  • Sam’s Club opened its 27th store in China in July, serving middle and high-end income families. Read the full report here
  • Costco now has three stores in China, read the full report here. It opened its first physical store in China last August in Shanghai with massive crowds of shoppers forcing it to close half a day early