Alibaba’s grocery unit, Freshippo, has announced plans to increase the number of physical stores in China.

This move comes as the business prepares to separate from its parent company and become publicly traded.

Freshippo, also known as Hema in China, is set to launch 12 new stores in mainland China, targeting major cities such as Beijing, Shanghai and Guangzhou.

The expansion aims to strengthen the company’s presence in the grocery market.

Competition heats up between Alibaba and in China

China’s two largest e-commerce firms, Alibaba and, are engaged in fierce competition in the grocery sector.

In late June, established a new business unit, 7Fresh, dedicated to its grocery business and appointed an experienced executive to lead the division.

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By GlobalData

Alibaba’s Freshippo endeavours to integrate its e-commerce and logistics capabilities with a more conventional shopping experience. Customers can conveniently order groceries online and have them delivered, but they can also visit physical stores renowned for their fresh produce, including items such as lobsters.

Preparing for independence and expanding reach across China

Alibaba split itself into six separate business units three months ago in an effort to revitalise the company. These units have the potential to attract external investments and pursue initial public offerings (IPOs).

However, Freshippo operates as a distinct and independent business under Alibaba, separate from the six business groups. Last month, Alibaba approved an IPO for Freshippo, although a specific timeline has not yet been announced.

Freshippo currently operates more than 300 stores across 27 cities in China.

With its ongoing expansion, the grocery unit aims to further solidify its position in the Chinese market and offer its innovative shopping experience to a wider audience.

This expansion follows Alibaba’s CEO stepping down last month to concentrate on the company’s cloud division.