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Freshippo’s grocery division of Alibaba Group Holding is set to close its last membership-only store. The final member-exclusive supermarket in Shanghai will cease operations on August 31, according to employees at the shopping mall housing the store.
Earlier, three membership stores in Beijing, Suzhou, and Nanjing had already shut down at the end of last month. The company launched its first members-only supermarket in 2020, marking a first in China’s retail scene by adopting a model where customers pay a membership fee upfront to shop.
At its height, the chain operated ten Freshippo X supermarkets. However, in 2023, Alibaba reorganized into six separate business groups to foster independent growth, prompting Freshippo to shift focus toward expanding smaller and standard-store formats.
In March, the company closed three more members-only locations in Shanghai and announced plans to open 100 fresh food supermarkets within the current fiscal year, with intentions to expand into dozens of new cities.
Establishing members-only outlets requires significant investment in store rollout, warehouse placement, and supply chain prowess to develop and source high-quality, exclusive products. An industry insider noted that this asset-intensive approach results in a return on investment of eight to ten years per store, making it difficult to sustain profitability in the short term.
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