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The encyclopedia · Product & Design · Product decision · 2016–2021

Alibaba's Freshippo made each supermarket a 30-minute mini fulfillment hub

Freshippo built stores as fulfillment centers, so the same stock answers shop floor and app orders within 30 minutes in a 3-km radius.

Freshippo (Hema), Alibaba Group

the move

Most grocers that went online bolted e-commerce onto stores that were never designed for it, so picking competed with shoppers and delivery crawled. Freshippo started from the other direction and built the store to be a fulfilment node from day one.

Each Freshippo store holds one stock that serves both the physically shopped supermarket and mobile-app orders. Online orders are picked from the same shelves and moved on overhead conveyor tracks to a dispatch area, then couriers deliver within roughly 30 minutes to a 3-km radius. The first store opened in 2016 and there were about 250 locations by the end of 2020.

The design inherits Alibaba's supply chain and adds a robot-staffed in-store restaurant, so the same product can be bought raw or cooked. Because the store is the warehouse, there is no separate delivery facility to pay for, and the fastest products are exactly the ones already closest to the customer.

why it works

  • One inventory serves online and in-store, so no extra capital
  • Stores are placed near demand, making the last mile short
  • Overhead conveyors cut walking and picking time
  • The store, restaurant and app share the same demand signal
the payoffThe store IS the warehouse — one stock, two channelsclever

what transfers

Instead of adding a new warehouse for online, make the store's stock answer every order; the physical store becomes the cheapest last-mile asset you already own.

what came after

Freshippo grew to hundreds of stores and later added a membership-only format to take on Costco and Sam's Club in Shanghai. It showed Chinese grocery rivals the cost of a store built for online, pushing 'New Retail' onto the industry agenda, even as the format remained expensive to roll out.

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