(Yicai Global) April 17 -- Chinese e-commerce giant Alibaba Group Holdings plants to relocate the head office of its New Retail supermarket Hema Fresh to Shanghai, where it hopes to form an industrial hub generating upwards of CNY10 billion (USD1.4 billion) a year.

Hema will shift its headquarters from Hangzhou to the Lujiazui financial business district in Pudong New Area and open the new offices this year, The Paper cited an insider who opted to remain anonymous as saying.

Alibaba will also set up a processing and distribution center in Pudong New Area integrating automated three-dimensional warehouses and automated storage, transport and processing functions, according to a company statement. It hopes the facility will open in 2022 to serve Hema outlets across Shanghai, Alibaba Vice President Hou Yi said at a launch ceremony today.

The firm has already opened more than 220 Hema outlets in 23 Chinese cities since it launched the chain in January 2016. It hopes to open another 100 regular-sized stores in China this year, and 100 smaller shops, Hou said last month.

The company may receive special support from the local government to do so, after authorities said on April 13 that they would offer substantial support for 12 new online sectors that proved their worth during the pandemic, including fresh food delivery, over the next three years.

Online traffic at Hema has been three times larger than last year during the Covid-19 pandemic as people ordered fresh food for home delivery rather than heading out. Orders online are now making up about 80 percent of all sales, up from 50 percent a year earlier.

Editor: James Boynton