Alibaba rolls out Store X club hypermarket chain

After a successful launch in Shanghai in 2020, the retailer has decided to replicate the new format.

China’s Alibaba Group announced the opening of two more hypermarkets in the new Store X chain, designed to meet the needs of the fast-growing middle class in major cities. The company also shared plans that include opening eight more hypermarkets by the end of 2021. 

With more than 18,000 square feet of space and assuming an enclosed “clubhouse” model, the first Store X opened in October 2020 in test mode. The hypermarket in Shanghai reached profitability two months after opening. More than 40% of the assortment consists of own-brand products. The company recognized the pilot as successful and decided to replicate the project. The retailer offers its customers a range of services (free delivery, VIP-support, car-wash) for $40 a year. 

Alibaba Group sees prospects in building a new chain against the backdrop of general market conditions – the welfare of families is growing across China. In Beijing, the authorities have allowed couples to have up to three children since last year, which also positively affects consumer confidence. 

“Store X” is the latest adaptation of the big box format of Freshippo’s grocery multi-format retail chain. The online retailer seeks to combine the best practices of offline and online shopping for middle- and high-income shoppers with the project, Alizila reports. 

“‘Store X’ offers a membership-based experience beyond Freshippo’s existing supermarkets. The combination of different store formats can complement each other to meet the city’s rapidly changing and renewing consumption needs,” commented Freshippo CEO Hou Yee.

Analysts estimate that Chinese residents’ income has grown by 700% over the past twenty years, and urban consumers have accumulated surplus savings amid the country’s persistently low inflation. The average check at Freshippo stores is estimated at $152, which is higher than other retailers.