Freshippo: Business Model, Value Creation, and Sustainability Analysis

This report analyzes Freshippo's business model, focusing on its integrated online and offline approach, particularly its adoption of electronic shelf-labeling and online platforms. It examines how Freshippo creates value for customers through personalized marketing, fresh produce, and health-conscious initiatives, while also capturing value through customer preferences for convenience and quality. The report assesses the potential for sustainable and profitable growth, considering the impact of various business models and expansion strategies. It also provides an alternative perspective on the company's decision-making, particularly concerning store expansion and the introduction of different store formats, offering recommendations for future management of these models and highlighting the importance of balancing rapid growth with sustainable practices and competitive advantage.

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Management
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Table of Contents
Introduction......................................................................................................................................2
Discussion........................................................................................................................................2
Conclusion.......................................................................................................................................3
References........................................................................................................................................4

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Introduction
The research paper helps in understanding the role of Freshippo in managing their
business activities and managing preferences of the customers in an effective or ineffective
manner. The main aim and purpose is to understand and identify the business model of Freshippo
and the process through which they will be able to achieve sustainability.
Discussion
Freshippo has developed their online and offline business model with the adoption of the
electronic shelf-labeling system which helped in displaying product prices in real time, that
helped in ensuring consistency across the online and offline prices and parallel stores sales as
well as replenishment (Melati & Dewi, 2020).
Freshippo has created two events each week and provided WeChat Online group wherein
the customers could be able to discuss the food related topics. It used the account for informing
different customers regarding food and health, as the part of the value proposition for reaching
towards the customers through personalized marketing. In addition, Freshippo encouraged
healthy eating with fresh food being made available for consumption as well (Zhang & Zipser,
2019).
Freshippo has been able to capture value from the customers as the working women
preferred mostly the fresh produce and approximately 75% of the customers claimed that they
would be rather buying fresh produce than the others. In this manner, the company was able to
capture value from their customers.

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The business model of Freshippo is capable of achieving sustainable as well as profitable
growth as Alibaba’s mobile first supermarket brand which is capable of meeting the different
requirements of the customers without harming the environment. It is more eco-friendly which
will be capable of making the business highly sustainable in nature (Menozzi, 2019).
As per my choice, there was no requirement of creating the F2 convenience store, the
Freshippo cloud supermarket, and the Hexiaoma store while continuing to build the regular
Freshippo store. The main reason was that the regular Freshippo store was able to provide the
customers with dining and shopping experience which was adequate and it could have helped the
company in working towards the sustainability approach as well (Chang & Zhu, 2020)
In the future, Freshippo could manage the four different business models in an efficient
manner with the help of the employing the effective value chain related practices which will be
suitable for improving their practices and gain competitiveness in the near future as well (Chang
& Zhu, 2020). In place of Yi, I would not have opened 46 stores within the first two and half
years as I feel that there includes risk of products being copied or improved by the other
competitors. Therefore, it could have impacted the sales of the company to a large extent and it
created chaos within the first few years itself. I feel moving steadily and gaining profitability are
the two major elements which needs to be implemented for the growth of the company.
Conclusion
Therefore, it can be concluded that Freshippo has been capable of taking the advantage of
the market and satisfied the needs of the clients. However, opening 46 stores within two and half
years was not a brave decision as it have impacted their performance and sustainability to a large
extent.

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References
Chang. V., & Zhu, Q., (2020) Freshippo: Business Model Evolution in Alibaba's New Retail
Platform (Online) Retrieved from Harvard Business Review
https://www.iveycases.com/ProductView.aspx?id=105045 [Accessed on 20th April 2020]
Menozzi, D. (2019). Economic sustainability of healthy diets.
Zhang, D., & Zipser, D. (2019). Speak softly, make tough decisions: An interview with Alibaba
Group chairman and CEO Daniel Zhang. The McKinsey Quarterly.
Melati, K. R., & Dewi, S. N. K. (2020, March). Integrated E-Commerce Ecosystem in China and
Indonesia’s Giant Market. In 2nd International Media Conference 2019 (IMC 2019) (pp.
251-269). Atlantis Press.