Freshippo, the supermarket chain owned by e-commerce giant Alibaba, is reportedly making preparations for an initial public offering (IPO) in Hong Kong, according to sources cited in a Bloomberg report.
The report, which quoted people familiar with the matter, said Freshippo has already tapped investment banks, including China International Capital Corp and Morgan Stanley, to explore a potential sale at a valuation of $10 billion.
The size and timing of the offering, however, remain under consideration, and the IPO plan, which is still at an early stage, might not happen until next year or later, according to the report.
Founded in 2015 and wholly owned by e-commerce behemoth Alibaba, Freshippo has 300 stores in 27 cities that provide grocery delivery services, according to its website.
The supermarket chain, known as Hema in Chinese, offers a wide range of fresh produce, seafood, meat, and other groceries as well as a restaurant section where customers can select from a variety of dishes cooked with the freshest ingredients.
The seafood section is particularly unique, with live lobsters and fish swimming in tanks, ready to be chosen and cooked on the spot.
Customers can shop in-store or place orders online through the Freshippo app, which offers a variety of payment options, including Alipay and WeChat Pay.
The app also allows customers to track their orders, view their purchase history, and receive personalised recommendations based on their shopping behaviour.
If the IPO pushes through, Freshippo will be Alibaba’s second business unit to pursue a separate listing. In March, Alibaba’s logistics arm Cainiao was also reported to have begun preparations for a $20-billion market debut.
Cainiao is targeting a listing as soon as the end of this year, and the firm hasn’t decided on the IPO size, while the timeline is still subject to changes depending on market conditions, Bloomberg earlier reported.
Freshippo’s planned listing comes as Alibaba announced plans to split into six units and explore fundraisings or listings for most of them.
The six units will include Cloud Intelligence Group, Taobao Tmall Commerce Group, Local Services Group, Cainiao Smart Logistics Group, Global Digital Commerce Group, and Digital Media and Entertainment Group.