Freshippo refutes claims of closing down, plans to add 70 stores

Alibaba’s grocery business Freshippo (盒馬鮮生) has refuted claims that it is shutting down and said it is planning to open 70 stores, the company said on Weibo in response to online rumours that it is closing some stores.

Due to expiration of property leases and sluggish business of certain stores, Freshippo has decided to close six to seven worst-performing stores in the first half of the year. However, it is seeking properties in other locations that can better meet consumers' demand.

The company also said over 360 shops are operating as normal, with the new stores it is planning to add this year, the total number of Freshippo could exceed 400.

Don't miss: Alibaba reportedly mulls selling Freshippo and RT-Mart

Back in February, it was reported that Alibaba was seeking to sell multiple consumer industry assets, including its grocery business Freshippo, which is considered a non-core loss-making division.

According to Reuters, three people with knowledge of the situation said that Alibaba has been focusing on its core eCommerce business for profitability while spinning off non-core loss-making divisions.

Alibaba has been in talks with both strategic and financial investors regarding these assets, according to the report. The assets include Alibaba's department store subsidiary, Intime Retail (銀泰百貨). While discussions regarding these sales are still in the early stages, Alibaba may decide not to proceed. 

On the other hand, Alibaba Group has achieved a healthy quarter with revenue growth of 5% year-over-year in Q4 2023, reaching a total of RMB260,348 million (US$36,669) million in revenue, according to its latest financial results. 

The group’s revenue from Taobao and Tmall Group was RMB129,070 million (US$18,179 million), a growth of 2% year-over-year. The success of 11.11 Global Shopping Festival demonstrates the increasing consumer demand and willingness to make purchase through the group’s platform.

"We delivered a solid quarter as we are executing our focused strategies across the organisation. Our top priority is to reignite the growth of our core businesses, eCommerce and cloud computing. We will step up investment to improve users’ core experiences to drive growth in Taobao and Tmall Group and strengthen market leadership in the coming year,” said Eddie Wu, CEO of Alibaba Group.

"We increased our investment in strategic priorities and improved shareholder return by leveraging our strong balance sheet and cash flow. Our board of directors approved an increase of US$25 billion to our share repurchase programme, demonstrating our confidence in the outlook of our business and cash flow. Our consistent share repurchase has also reduced outstanding share count while achieving EPS and cash flow per share accretion,” said Toby Xu, chief financial officer of Alibaba Group.

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