CHINA'S INTERNET COMPANIES PUSH FURTHER INTO THE SUPERMARKET SECTOR

In the past year, I have been sharing information on how China's internet companies are taking over the supermarket sector, where many traditional players are struggling.

Alibaba's Hema has seen strong growth and is likely now the #2 supermarket chain after Walmart. Meituan and JD are continuing to open both upscale supermarkets and community discount stores.

These are the figures of planned store openings for 2026 and expected total stores by the end of the year, as shared by Lianshang:

▶️ Walmart +13 new Sam's Club stores. 2026 total: 76. While not an internet company as such, Sam's Club generates half of its GMV online and uses front-end warehouses for most deliveries.

▶️ Alibaba's Hema Xiangsheng (Freshippo): +100 stores in 50 new cities. 2026 total: 500+.

▶️ Alibaba's Chaohesuan NB (formerly Hema Outlet/NB) community discount format: +200 stores. 2026 total: 600 stores in 300+ counties, with South China as the core expansion area.

▶️ Meituan's Kuailehou (Happy Monkee) discount format: dozens of new stores on top of the 7 it opened last year. Planning to grow to 1.000 stores in a few years.

▶️ Meituan's Xiaoxiang (Little Elephant) upscale supermarket: 3 new stores in Ningbo, Beijing and Zhengzhou in the foreseeable future.

▶️ JD's 7Fresh upscale supermarket: 100 new flagship stores. 2026 total: 150.

▶️ JD's Zhekou Chaoshi discount supermarket: adding 30-50 new stores in lower-tier cities in North and East China to its current 9 stores.

It's worth mentioning that ALDI plans to open 30 new stores in Shanghai and Jiangsu province, bringing the total to 100. The battle in the discount market will heat up further.

The sector is also moving into a combination of offline experience & branding stores (Hema, 7Fresh, Xiaoxiang) and online instant retail for convenience through front-end warehouses (Hema, 7Fresh, Taobao Instant Commerce, Meituan Lightning Warehouses, Xiaoxiang, etc).

Instant retail is expected to incorporate the various discount stores for quick delivery to nearby communities.

Among this expansion, traditional supermarkets are in a vicious cycle of "closing stores to cut losses - shrinking scale - declining bargaining power in the supply chain" due to declining customer traffic, high rent and labour costs, and serious product homogenization. In the first half of 2025 alone, 720 supermarkets closed in China, including leading companies such as Lotus Supermarket, China Resources Vanguard, and RT-Mart (the latter sold by Alibaba last year).

Traditional chain Yonghui shifted from 'scale expansion' to 'quality growth' and closed 381 stores in 2025, while upgrading 381 stores and expanding its network of front-end warehouses for instant retail.

If this trend continues, the supermarket sector will be owned by a handful of foreign players (Walmart, ALDI, etc.), a few survivors that manage to adapt (Yonghui?), but primarily China's internet players. Imagine that.