Alibaba, JD opening high-tech, bricks-and-mortar supermarkets in China

Published on
January 8, 2018

Two of China’s largest online vendors have begun opening bricks-and-mortar supermarkets, equipped with technological wizardry designed to create “premium-quality offline shopping experience.”

On 4 January in Beijing, officially opened of the first of a planned chain of 7FRESH stores, representing the e-commerce giant’s first foray into the world of traditional retail.

“One of the biggest factors that has driven the remarkable boom in China’s e-commerce sector is the traditional weakness of the country’s physical store infrastructure. JD has become China’s biggest retailer by offering a superior customer experience online. Unlike in other markets where shoppers enjoy going to the supermarkets – especially upscale experience markets – in China, the only premium experience was online,” the company said in a press release. “That’s all changing with the launch of 7FRESH.”

The launch came the day after Alibaba announced it would open a further 30 Hema Xiansheng supermarkets in Beijing in 2018, adding to the five it opened in 2017 – news that was first reported by China Daily. The near-simultaneous announcements revealed the increasingly intense competition in the lucrative fresh-food retail sector between the two online giants.

The expansion of 7FRESH and Hema also show traditional retail in China is being revolutionized e-commerce technology. Both chains offer remote shopping via an app and free delivery of groceries within 30 minutes. The companies have also sought to improve customers’ in-store experience, with screens displaying information on products when a customer picks them up, “smart” shopping carts that follow customers as they browse, and restaurant areas where customers can have a meal on-site or have it cooked to-go.

And in a country where food safety ranks highly in customers’ concerns about the good they buy, JD has said it will track every step in its supply chain, from production to delivery.

“Underscoring its commitment to food quality, JD recently partnered with Walmart, IBM and Tsinghua University to launch the Blockchain Food Safety Alliance, to enhance food tracing, traceability and safety in China,” the company said. “Consistent with this mission, 7FRESH offers products directly sourced from top-quality suppliers who have been carefully vetted by JD, an important differentiator for Chinese consumers who are increasingly focused on food safety and produce supply chains.”

Both Hema and 7FRESH stores will be stocked with freshly-caught seafood, which customers can have prepared and cooked on site, according to company announcements. The 7FRESH press release specifically calls out its fresh fish and seafood, which is “caught from the seas of Japan and delivered to the dinner table in just 24 hours.”

“JD is uniquely positioned to bring this premium-quality offline shopping experience to Chinese consumers because of our supply chain technology and scale as the country’s largest retailer,” 7FRESH CEO and JD Fresh President Xiaosong Wang said. “With the highest efficiency and the greatest knowledge of consumer preferences, as well as access to the highest-quality products, we can invest in a premium experience far beyond anything Chinese consumers have experienced before.”

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