Exclusive: an interview with Alibaba Freshippo’s Chief of Staff

Date : 19 January 2021

Jiong-Jiong Yu

Senior Retail Analyst

Freshippo, Alibaba’s grocery retail chain launched in 2016, is the gold standard for the integration of online, offline, technology and logistics to create a greatly enhanced shopping experience. In an exclusive interview with IGD, Guo Xulin, Chief of Staff of Alibaba’s Freshippo Business Group, highlights the aspects that distinguish the New Retail, which Freshippo represents, from old retail.

Prior to joining Alibaba, Xulin worked at Goldman Sachs, IDG Capital, and J.P.Morgan, where he was responsible for deals in IPO, M&A, securities trading, and venture capital investment.

All channels are integrated right from the start

Different to traditional supermarkets that add online elements to their exiting offers, Freshippo integrated all channels right from the start.

Stores are designed as mini warehouses to fulfil online orders and deliver goods to customers at home within 30 minutes.

The Location-Based-Service (LBS) technology in the mobile app assigns a default store to each customer. Everything the customer buys from the app is from that store. The staff fulfilling the online order are the same staff serving the customers in the store,” shared Xulin.

With this hyper-local fulfilment and rich offering of fresh food products, online accounts for 50% of Freshippo sales pre-COVID. The pandemic has caused a surge in demand for online grocery retailing. This number is now over 60% for Freshippo. For some stores, it can be as high as 70% or 80%.

The super app is key to Freshippo experience

The retailer’s mobile app plays a central role in blending online and offline shopping experiences.

It is a multi-function super app. In addition to ordering and paying for goods online, shoppers can scan the QR code of each product for pricing details, customer reviews, recipe ideas and videos.

The app also provides a clear traceability of products, which is extremely important in China. Scanning the QR code for a live lobster (Freshippo is one of the largest seafood retailers in the country), information such as where and when it was caught, safety and authenticity certificates will be displayed on the customer’s phone.

… with hyper-personalised content that drives customer engagement

Utilisation of data science for customer centricity and customisation is core to Freshippo’s business. The app’s sophisticated algorithm takes account of multiple parameters, including:

  • Customer’s shopping history
  • Behavioural data
  • Store’s inventory
  • Time of day and
  • Weather conditions

The content of the app is customised for individual shopper and changes throughout the day.

For example if you open the app in the morning, it is mainly the recommendations for breakfast items. If you open the app in the afternoon, say 4pm, it will be suggestions for coffee, fruits, and afternoon tea items. Around 5 or 6 pm, it will give you suggestions for ingredients that you would like to cook,” said Xulin, ”… so this app is like personal shopping assistant and it is also digital, 24 hours and 7 days a week.”

Unlike traditional retailers where the promotions are mainly in the store, we use the power of technology to provide more customised experience for our consumers and at the same time increase our operational efficiencies.” he added.

Continually innovating new formats to meet customer demands

In addition to the original supermarket format, the group has unveiled several other store formats, catering to different shopper needs, for example:

  • Freshippo X store: the whole sale membership-only store opened in October 2020, focusing on fresh category and ready-to-cook meals
  • Freshippo Mini: the community stores mainly located in city suburbs, serving the needs of residential areas
  • Freshippo Pick n’ Go: the breakfast format, targeting office workers with high quality Chinese and Western style breakfast meals

Watch the 30-minute video here for full details and Xulin’s view on:

  • How COVID has been a catalyst for new product development
  • How Freshippo sources premium goods and keeps the price down
  • Opportunities for brands to collaborate with Freshippo
  • How Freshippo shares data and customer insights with suppliers
  • The retailer’s priorities over the next few years
Source: IGD

 

Any question related to this webcast, please email AskIGD@igd.com

What to know more?

  • Read IGD’s news article on Freshippo’s format innovation here
  • Read IGD’s news article on Freshippo Bakery and Freshippo Cross-Border Go here
  • See video of Freshippo’s concepts on Alizila here
  • Subscribers can view our Freshippo store visit report here
  • Subscribers can view our Freshippo fast&freshade store visit report here