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China: NB discounter opens for franchise

Updated: Jul 6

Discount model "NB", supported by Freshippo, owned by Alibaba, opens franchise model (after the Pickup format franchising) with the following key parameters:


  1. 700 square meters in size

  2. Wide range of products, including frozen fast food, beverages and snacks, fruits and vegetables, seafood, and cooked food and bakery

  3. Freshippo will open 800 to 1,000 stores in the 19 cities where O2O format has already entered within 3 years

  4. Average daily sales of more than 400 Hema NB pickup stores in Shanghai reached 8,000 yuan, with the highest daily sales reaching 26,000 yuan. 

  5. More than 60% of NB pickup store franchises have achieved profitability


Now for a mere 60,000 RMB (8,263.44 USD) budget, you can become a proud shop proprietor for Freshippo, also called Hema. The catch is, though, it’s not a supermarket. The franchising is for the smaller pickup shops. On 17 June, it was reported that Hema NB (Neighborhood Business) app from Freshippo had launched a page for franchising, but only for smaller pickup shops.


Hema NB is Freshippo’s “hard” discount community supermarket brand that focuses on direct price reduction and Freshippo’s own brand products which are nearing their expiry date. It recently opened its 110th discount store in Chongming, Shanghai on 15 June. Freshippo is pursuing a strategy of “1+N”, meaning for each Hema NB outlet, there will be several pickup shops in the surrounding area, where local residents can place orders online and collect them at the smaller shops the next day.


Prospective franchisees can choose to start a pickup shop from scratch or build a corner for Hema NB in their existing shops. They also offer group options for those without enough funds or time and just looking for a part-time job. The required 60,000 RMB budget threshold includes 30,000 RMB (4,131.66 USD) for deposit, 10,000 RMB (1,377.22 USD) to use Freshippo’s online platform and roughly 10,000 RMB for fit, finish and equipment for the store. Freshippo will in turn provide assistance in location selection, recruitment, training and support on management and IT.


Freshippo’s plans is to open 800 to 1,000 stores in the 19 cities that already have a Freshippo presence or Hema NB shops in the next 2 to 3 years. In 10 years, Freshippo will aim for 10,000 stores in China. Recently, Freshippo welcomed a new CEO and switched further to a discount strategy. With its own brand starting to see overseas exposure with Chinese supermarkets in the US, Freshippo’s next steps are definitely worth watching.



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