Benzinga | Dec 30, 2021 06:27AM EST

Alibaba's Grocery Retail Chain To Add 3 Membership Stores Shortly: Report

Alibaba Group Holding Ltd's (NYSE:BABA) grocery retail chain Freshippo looks to add three new membership stores in January 2022, China Daily reports.

* Dubbed Freshippo Business Group-X Wholesale Store (X store), Alibaba will set up the three stores in Shanghai, Suzhou, and Nanjing in the neighboring Jiangsu province.

* Alibaba added one store in early December in Shanghai.

* The stores feature 16,000 - 20,000 square meters, each with around 3,000 stock-keeping units.

* The report adds that over 40% of products in the membership-only X store are the company's exclusive products.

* Retail giants like Costco Wholesale Corp (NASDAQ:COST) and Walmart Inc (NYSE:WMT) Sam's Club, known for the membership-only warehouse chain model, are flocking to set up a physical presence in China. The retailers aim to tap China's rapidly-expanding middle-income consumers aspiring for premium quality products at reasonable prices.

* The report quoted Jason Yu, general manager of consultancy Kantar Worldpanel, stating, "The membership-only model is still in its infancy in China, with more growth prospects expected not just from metropolises like Beijing and Shanghai but emerging first-tier cities such as Hangzhou over the next two to three years."

* Price Action: BABA shares traded higher by 0.05% at $112.15 in the premarket session on the last check Thursday.