The brick and mortar competition among China’s tech giants continues to heat up with JD.com announcing earlier this week that it would open 500 of its 7Fresh supermarkets in five years. This latest expansion into offline retail by China’s second-largest ecommerce player follows soon after rivals Tencent and Alibaba each announced their own offline grocery initiatives.
Within this year JD.com’s 7Fresh physical grocery chain will add 50 stores to its portfolio, Wang Xiaosong, president of 7Fresh revealed at an event in Beijing on Monday. The ecommerce company aims to reach its goal of 500 grocery outlets within the next five years, Wang added.
JD debuted its first 7Fresh supermarket in January, a 4,000 square metre store in Beijing that features “smart carts” that guide customers to their desired aisles. During the six-day trial, the store recorded an average of over 10,000 visitors per day, according to local media reports.
Apart from visiting the stores in person, customers can also buy their bitter gourd, lotus root and frozen chicken feet via 7Fresh’s mobile app, which promises 30-minute delivery to locations within three kilometres of a physical store.
Online Giants Battle to Win China’s Produce War
JD is boosting its efforts in offline groceries as its tech competitors are making their own bids to take a bigger share of China’s shopping market. Last week, Carrefour opened its first-ever smart supermarket in Shanghai in partnership with Tencent, four months after the Wechat-maker bought a stake in the French retailer. The new store in Shanghai’s Changning district covers two floors totalling 4,000 square metres.
Meanwhile, China’s biggest e-commerce company by sales, Alibaba, is speeding up the expansion of its Hema high-tech supermarket chain, which already had 22 stores under operation by the end of 2017. The tech company led by billionaire Jack Ma has set a target of opening 2,000 Hema stores nationwide in the next three to five years.
In March, Alibaba signed a cooperation agreement with China’s top property developers including China Vanke, Evergrande and Country Garden to provide Hema with store locations and related service support.
JD Brick And Mortar Empire
The plan to ramp up 7Fresh followed JD.com’s debut of its first unmanned store in Beijing’s Xiong’an New Area earlier this month. The 246 square metre (2,648 square foot) high tech retail store allows smartphone-enabled shoppers to make purchase via facial recognition. The store also features digital price tags that show updated price discounts and offers in real time.
JD has since opened over 10 staffless supermarkets in cities like Beijing, Tianjin, Dalian and Xian after unveiling its first unmanned store in Shanghai at the beginning of the year.
In addition to its supermarket chain and clerk-less stores, JD.com is on an ambitious plan to open one million convenience stores in the next five years. Last month, the company’s founder and chief executive Liu Qiangdong vowed to open 1,000 convenience stores every day by the end of this year, with half of those new outlets located in rural areas across the country.