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Alibaba's Freshhema Exceed 130 Stores in China
COVID-19 and China
Freshhema's website cover photo. PHOTO: Credit to Freshhema

Mar 31, 2019 /EqualOcean/ - Freshhema (盒马鲜生) has more than 130 stores across China, according to Retail Boss Internal Reference (零售老板内参) report. As Freshhema is owned by Alibaba, ZHANG Yong (张勇) or Daniel ZHANG, Alibaba’s CEO, attributes this success to the following six factors: efficient organization, to be a “good person”, putting customers first, to be self-aware, employee growth, and refining management and operations.

Last year, Freshhema launched a three-tier management structure at its headquarters, branches, and stores. As management becomes increasingly complicated, ZHANG wonders how the company can build soft power under these circumstances. “How can we unite people from different cultures and backgrounds who have different ideas and opinions?” According to ZHANG in the article, organizational strength is a top priority in the future.

“Values do not simply hang on the wall; they should be integrated into our subconscious and reflected in our thinking and behaviour,” ZHANG said. As Freshhema is a member of Alibaba, ZHANG hopes that people will use Ali’s values to perceive the online-offline supermarket despite it having its own distinctive features.

Freshhema’s CEO, HOU Yi (侯毅) picked up multiple awards last year. ZHANG extended these awards to be a reflection of the company and colleagues working at Freshhema. As there are conflicts that arise online and offline, ZHANG encourages his employees to focus on the good. “The management at Freshhema must have the right attitude [toward the customer],” ZHANG explains. And to solve problems, “we must think about [it] from a positive side.”

Regarding management, ZHANG encourages them to strengthen their learning. As Freshhema combines online and offline retail, operations, logistics, supply-chain and services, the business is not the same as others. This integration, ZHANG notes, is Freshhema’s “core competitiveness.” Therefore, he hopes everyone can learn “from a full perspective” as everyone’s positions are connected to each other. ZHANG also explains how he disapproves of the phrase “one will make a fortune.” He strongly believes that everyone should grow from a company’s progress.

Freshhema users can “order groceries online and have them delivered to their homes within 30 minutes, or they can shop at the physical stores and have their purchases delivered to their doorstep,” according to South China Morning Post. The online-offline supermarket is seeing great success: 64 Hema stores across 14 cities have opened since the beginning of 2016.

According to Ali Group’s 2018 June quarterly results, their China commerce retail business revenue was CNY 53, 968 million (USD 8,156 million), a 47% increase compared to the same quarter in 2017. The “robust revenue growth” consisted predominantly of their new retail initiatives, including Freshhema. Revenue from Ali’s China retail marketplaces is also seeing continuous success. Their customer management revenue had a 26% YOY growth and commission revenue had a 55% YOY growth.

However, Alibaba’s commerce retail revenue in China has been slightly decreasing since 2016.

Whether this is concerning is too early to tell, and whether ZHANG’s hour-long speech will considerably make an impact on internal management will be reflected in the future numbers. EqualOcean did an in-depth analysis of Freshhema (see more in this article.

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