Site icon AllTechAsia

Chinese tech giants battle to provide better fresh-food ‘New Retail’ experience

Chinese Internet giants, particularly e-commerce companies, have transferred their former battleground of online shopping to the realm of the so-called “New Retail” experience, which uses technology and data to merge online and offline shopping. The model seeks to offer consumers a more efficient and flexible shopping experience, especially in the fresh-food supermarket sector.

Within a week, three well-known Chinese e-commerce companies made announcements highlighting their ambitions in supermarkets. The latest move was taken by China’s second largest Chinese e-commerce company,, which on January 4th opened its first offline fresh food store, 7FRESH.

7FRESH aims for expansion

Located in southern Beijing’s Yizhuang District where is headquartered, the new 7FRESH supermarket covers over 4,000 square meters. As much as 75% of the products at 7FRESH are fresh food, including imported ones. The supermarket also provides cooked-food stalls, which turn the supermarket into a restaurant-market hybrid.

7FRESH is making self-service counters available to customers and accepts mobile payments such as WeChat Pay and JD Pay. At the self-service counter, customers can finalize payments via facial recognition or through the 7FRESH app. Customers within 3 kilometers of the supermarket can submit orders on the app and receive deliveries within 30 minutes. has a well-developed online fresh-food service with cold-storage and logistics sites, which have become a strong pillar of support for its “New Retail” consumer experience. The company plans to open 1,000 additional 7FRESH locations across the country in the next three to five years, according to Wang Xiaosong, president of 7FRESH.

Alibaba’s Jack Ma visiting a Hema Store. Photo from Alibaba

Super Competitors’s 7FRESH store utilizes advanced logistics technologies to serve consumers in a similar way to that of the Hema Store, which is owned and operated by Chinese tech giant Alibaba. As the role model of “New Retail”, the Hema Store has opened 25 outlets in seven Chinese cities over the last two years.

On January 3, the company announced it would add 30 more stores in Beijing this year, dramatically expanding its presence in the capital to 35 stores from the current five. Hema Store claims that nearly 1.5 million local Beijing residents are covered by its 3-kilometer delivery radius within half an hour.

Hema CEO Hou Yi once said Beijing would serve as the first testing ground for Alibaba Group to realize its new “3-kilometer ideal living community” concept, a joint collaboration between Alibaba and its affiliates — including Hema, Tmall, bike-sharing app Ofo, and mapping services provider Autonavi — to create communities that provide the most advanced online-to-offline services.

On December 31, Suning Supermarket Company, a subsidiary under Suning Commerce Group, whose e-commerce platform ranks among the top 3 Chinese B2C companies, opened three more Su Fresh supermarkets in Chengdu, Beijing, and Nanjing. Since April 2017, the company has opened supermarkets in Xuzhou, Nanjing, and Chuzhou,

The company said that they plan to open more than 50 of these supermarkets in 2018 and about 300 by 2020 with aims to cover most major Chinese cities.

Super Species, the New Retail unit of Yonghui Superstores. Photo from

Tencent joins the game

China’s Internet giant Tencent, has also made inroads into the “New Retail” business. In mid-December, Tencent purchased a stake in Super Species, the New Retail unit of China’s leading supermarket chain operator Yonghui Superstores.

Shanghai-listed Yonghui announced on December 11 that Tencent would buy 5% of its stake and would increase investment in its supply chain and logistics subsidiary. In return, Tencent will gain a15% stake in Super Species.

Launched last year, Super Species is a smaller-sized supermarket brand operating under the model of “high-end supermarket + fresh food restaurant + O2O (online to offline)”. It has entered six cities with 17 offline stores in China.

Don’t forget traditional markets

The competition among the new investors in the “New Retail” business seems intense, but their real rivals remain traditional supermarkets.

The fresh-food offline market has huge potential for transformation, which has drawn attention from avid Internet tycoons and capital giants. So far, Internet companies make up less than 3% of investment in China’s fresh food market, while the whole fresh food business in China could be worth as much as RMB 10 trillion (USD 1.54 trillion), Chinese media reported.

Traditional supermarket brands with established advantages in location, supply, and distribution chains, and their management experience in offline retail are more efficient than the newcomers, said Li Yongjian, director of the Internet Economy Research Office, at Chinese Academy of Social Sciences.

To face the challenges, internet giants should seek more partnerships in the retail sector. Doing so will be a win-win situation, Li added.

(Top photo from 7FRESH)

Exit mobile version