On July 1, Alibaba’s supermarket chain Freshippo launched a new store format, Pick’n Go, a breakfast pick-up store, in Shanghai’s Huangpu District. What is Freshippo? Freshippo, previously known as Hema, aims to give customers a seamless shopping experience. Shoppers can purchase fresh produce, including seafood, and have it cooked on site. Customers can also place orders through Freshippo’s mobile app for home delivery from store within 30 minutes or less, within a radius of 3 kilometres (1.9 miles). [caption id="attachment_93401" align="aligncenter" width="700"] Freshippo customers select live lobsters to be cooked on site.
Source: Alibaba [/caption]   Introducing Pick’n Go On July 1, Freshippo launched its new store format, breakfast pick-up store Pick’n Go, to target not just the breakfast market but to offer snacks throughout the day. The store sells more than 20 breakfast items, such as pancakes, bread, steamed buns, soy milk and coffee. The first Pick’n Go store is quite small: only 10 square meters (around 108 square feet). It has two main parts: a serving counter and a self-service locker. Orders can be placed via the Freshippo app for pick-up from the locker to avoid morning rush-hour lines. [caption id="attachment_93402" align="aligncenter" width="599"] Order list on the Freshippo app Source: Coresight Research [/caption]   Freshippo’s Strategy with Pick’n Go There is huge potential for China’s away-from-home breakfast market, with spending in the category estimated to reach ¥840 billion (around $126 billion) by 2021, increasing at a CAGR of 7.4% since 2016, according to research firm Mintel. In addition, Freshippo is looking to diversify in the face of challenges in the supermarket sector. The company closed its store in Kunshan, a county-level city in Suzhou, in May, citing poor site selection: It was in a mall in an industrial area with low customer traffic and poor buying power. Freshippo’s rival Ella Supermarket, launched by service platform Meituan, has also shuttered some of its stores. In addition to Pick’n Go, Freshippo has introduced four other store formats this year. [caption id="attachment_93403" align="aligncenter" width="700"] Source: Company reports/Coresight Research[/caption]   Key Insights Alibaba’s supermarket chain Freshippo’s introduction of Pick’n Go leverages China’s growing away-from-home-breakfast market, expected to be worth ¥840 billion (around $126 billion) by 2021. The new store format is also part of Freshippo’s effort to diversify its revenue streams.