(Yicai) Sept. 1 -- China’s internet giants are bringing their online price war into the high street, with Meituan last month opening its first Happy Monkey supermarket in Hangzhou, home to Alibaba Group Holding, and JD.Com opening five budget supermarkets.

Meituan is also preparing to open a Happy Monkey store in Beijing after the one launched in Hangzhou on Aug. 29, Yicai learned. JD.Com opened its first discount supermarket in Zhuozhou, Hebei province mid-August before four others in Suqian, Jiangsu province on Aug. 30.

In addition, on the same day the first Happy Monkey opened, Alibaba’s grocery arm Freshippo renamed its affordable community supermarket chain to Super Box Suan NB from Hema NB. The brand had nearly 300 outlets as of the end of last month.

Meituan's move is aimed at reaching older shoppers and people who rarely shop online, and to build consumer trust by establishing self-run physical stores, thereby strengthening the platform’s competitiveness, said Zhuang Shuai, an e-commerce expert and founder of Bailian Consulting.

These three e-commerce giants are drawing on their core research and development capabilities to differentiate themselves, while leveraging the supply chains and front warehouse model to integrate online and offline operations, boost customer loyalty, and scale instant retail services, Zhuang said. JD.Com’s foray into discount supermarkets is no experiment but a full-scale investment, he noted. 

The general push reflects both the slowdown in online retail’s growth potential, which forces big players to seek new markets, and a wave of supermarket closures in recent years, which has opened the door for digital behemoths to expand offline, Zhuang said.

The number of supermarkets run by China's top 100 operators fell 10 percent to 25,200 last year from 2023, according to data from the China Chain Store & Franchise Association.

“With their capital, user bases, technology, brand and merchant resources, delivery capabilities, and developed ecosystems, e-commerce giants are well positioned to craft diverse offline formats that give them a competitive edge and reinforce their dominance,” Zhuang pointed out.

Happy Monkey’s biggest advantage is the synergy with Meituan’s ecosystem, said Chen Liteng, an analyst at Wangjing She's e-commerce research center. Its half a billion users, supplier resources, digital management capabilities, and delivery-rider network all help reduce procurement costs and enhance the customer experience, Chen added.

Editors: Tang Shihua, Martin Kadiev