JD.com Merges 7Fresh, Other Brands to Form New Grocery Unit to Rival Alibaba’s Freshippo

JD.com, which is also known as Jingdong, is a leading Chinese e-commerce firm based in Beijing. In addition to its online retail platform, it also operates a chain of supermarkets in the country, and now it is expanding further by forming a new grocery unit in response to Alibaba’s introduction of its own spinoffs.

To create a new division focusing on “innovative retail,” JD.com plans to merge its 7Fresh supermarkets and Pinpin group-buying platform. Sources said that on-demand online services will also be added to complete the new grocery arm of the company, which will operate independently.

According to Bloomberg, starting this week, the former chief of JD.com’s international business, Yan Xiaobing, will lead the newly-formed unit. He is expected to report directly to the firm’s chief executive officer, Sandy Ran Xu. The source who provided these details refused to be named as the company has yet to officially announced the restructuring.

After setting up the independent supermarket division, JD.com will promote and establish it as a fresh food and grocery chain that is ready to serve the citizens across China. This project also appears to be part of the e-commerce firm’s aggressive expansion plans to boost sales and market value.

Reuters further reported that this business development comes after JD.com unveiled its 20-year plan earlier this month. It aims to build seven businesses that will be valued at more than 100 billion yuan or around $13.83 billion each.

In any case, JD.com will pit its new supermarket unit with Alibaba’s Freshippo, which may soon be listed. It is already in the process of raising funds for an initial public offering (IPO) as part of its restructuring scheme. Meanwhile, JD.com’s new business will be similar to Freshippo’s unit, which is called Hema in Chinese.

Photo by: JD Corp. Media Resources