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The backstory: Alibaba's supermarket chain Freshippo is taking grocery shopping to a whole new level with its supermarket plus restaurant and delivery experience. So, essentially, you can either shop and dine in or have groceries delivered in just 30 minutes.
And guess what? This isn't just a pipe dream. Freshippo's grocery brand, Hema Xiansheng, was already turning a profit in 2022, according to a company website.
The company also has some cool tech in-store, like automated order-picking systems with conveyors attached to the store's roof and robots that serve food to customers in the restaurant.
More recently: Last month, Alibaba announced it would split into six different business units, which could bring about more initial public offerings (IPOs). Alibaba CEO Daniel Zhang has called it the "most significant governance overhaul" in the company's history. Each unit will have its own CEO and board of directors, meaning they can focus on their specific areas of expertise, like cloud computing, e-commerce, food deliveries, digital media, entertainment and every other pie the conglomerate has its finger dipped in. In fact, Alibaba's logistics arm Cainiao is also expected to go public, hopefully by the end of the year.
The development: According to insiders speaking to Bloomberg, Alibaba's Freshippo is considering an IPO in Hong Kong. Its market value is around US$242 billion, and it has teamed up with major investment banks like China International Capital and Morgan Stanley to make it happen. But the details of the IPO, like how much it plans to raise or the company's valuation, are still up in the air. It's still early days, and it may not even end up going through. No comments have come out yet from Alibaba, CICC or Morgan Stanley about this matter, either.
The IPO plan "raises the odds that the money-losing supermarket unit can become profitable this fiscal year ending March 2024, boosting its earnings outlook," said Catherine Lim and Trini Tan, Bloomberg Intelligence analysts, in a note on Wednesday.
"The market is the best litmus test, and each business group and company can pursue independent fundraising and IPOs when they are ready," wrote Daniel Zhang, CEO of Alibaba, in an email to employees, according to Alibaba's own Alizila news site.
"The biggest challenge we are facing now is that the demand and numbers of orders from consumers has increased by about two to three times compared with pre-outbreak levels," said Shen Li, a vice president at Alibaba Group last year, referring to the recovery of Freshippo's delivery capacity at the time.
"Most electronics industry suppliers studied have set long-term targets for carbon reduction, but their timelines do not reflect the level of ambition that is necessary in the face of catastrophic climate change," said Greenpeace in the report. "To achieve neutral emissions will require adopting 100% renewable energy by 2030."