Restaurant chain Li Bao Ge joins forces with Freshippo to tap mainland China’s vast online food delivery market as Hong Kong profits tumble amid protests
- Cantonese restaurant chain sees opportunity to boost its revenue, which has been battered by civil unrest in its home market
- Deal will allow it to set up counters in at least 10 Freshippo stores in Shenzhen over the next year, tapping the latter’s digital capabilities
Cantonese restaurants operator Li Bao Ge Group will step into China’s vast food delivery market by working with Alibaba’s online-to-offline grocery retail platform, Freshippo, in order to boost revenue that has been severely dented by the social unrest in Hong Kong.
Li Bao Ge entered an agreement with Freshippo to set up more than 10 counters at the latter’s stores in Shenzhen before December 15 next year, securing exclusive selling rights for its speciality spit-roasted meats, known as siu mei in Cantonese. In return, Freshippo, which enjoys wide brand awareness in China, will aim to provide Li Bao Ge with customer traffic, and digital and logistics support.
“Freshippo is our entry into a very fast-growing market in China. In fact, it was Freshippo that picked us. They have tried different restaurants in Hong Kong and they eventually decided we have very good Cantonese cuisine products, which can fulfil the needs of their online retail market,” said Philip Poon, chief financial officer of Li Bao Ge.
Freshippo, which originated from Alibaba founder Jack Ma’s concept of “new retail” – merging the benefits of physical shops with online retail – has taken its e-commerce experience across China into supermarkets, shopping malls and convenience stores, guaranteeing food be delivered within 30 minutes within a distance of three kilometres from the store.
Alibaba owns the South China Morning Post.
Poon said the restaurant’s Freshippo counters will be the driver of its revenue next year. Currently, revenue is mainly generated from its banqueting offerings.