Alibaba’s Freshippo struggles to meet demand during Shanghai lockdown

Alibaba’s supermarket chain Freshippo says it is adding more couriers to meet high demand in Shanghai but this was not yet catching up with the rising needs of locked-down residents as the city battles a surge in Covid-19 cases.

Shen Li, a vice president at Alibaba Group’s Freshippo, told reporters on Sunday that while the company’s delivery capacity had recovered to about 60-70 per cent of pre-outbreak levels as more couriers were allowed back on the roads, many difficulties remained.

“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,” she said.

China’s most important economic hub has locked down most of its 25 million residents for more than three weeks in an effort to stamp out the country’s largest outbreak since the virus first emerged in Wuhan in late 2019.

After most supermarkets and stores were shut across the city, residents resorted to online buying to procure food and other essentials but have faced difficulties. Shanghai authorities have said they are trying to ease these bottlenecks but it remains a key public frustration.

Many residents have described waking up as early as 5am to try and grab delivery slots from online grocers such as Freshippo, only to find them sold out in seconds. While Freshippo and other vendors have launched bulk-buying purchase schemes, some people have complained about the inability to reach the volumes needed to guarantee orders.

Shen said Freshippo as of Sunday had 47 stores open for online deliveries in Shanghai and it also had set up six additional ad hoc warehouses for the city, due to issues with inter-province supply chains.

About 5000 staff were working in these stores and its warehouses while a further 1000 were working online from home, she added.