Source | Retail Krypton Planet ID | LS-KXQ Author | Retail Krypton Planet
The hottest topic in China's supermarket industry has shifted from "Pang Reform" to "hard discount stores."
Recently, Freshippo's community discount supermarket, Freshippo NB, which has been quietly incubated for over three years and is about to open its 300th store in the Yangtze River Delta market, officially debuted with a name change to "Super HeSuan NB."
Recently, the author visited a "Super HeSuan NB" store that opened that day. Located on the B1 floor of a commercial complex in Shanghai's outer suburbs, the new store covers 1,000 square meters and offers 1,600 SKUs. All categories, including fresh produce, are sold as pre-packaged standard products. With simple decoration and highly cost-effective products, it meets the daily needs of surrounding community families for three meals and household essentials.
On the day of opening, residents who had been waiting nearby flooded in, and the store instantly became crowded. Staff even implemented two-level flow control between B1 and the first floor. On August 29 alone, "Super HeSuan NB" opened 17 new stores across 10 cities in Jiangsu, Zhejiang, and Shanghai.
In an internal letter at the end of 2024, Freshippo CEO Yan Xiaolei proposed a dual-engine strategy centered on "Freshippo Freshippo and Freshippo NB." The official debut of "Super HeSuan NB" signifies that, unlike Freshippo Freshippo targeting urban new middle class, "Super HeSuan NB" has emerged from its incubation period and is now flying solo, serving the price-sensitive mass market.
"Super HeSuan NB": A Hard Discount Format Takes Shape
The slogan of "Super HeSuan NB" is "Real Value, Enough Peace of Mind." The name "Super HeSuan NB" is a homophone for "super cost-effective," sending a simple and direct signal of extreme value for money to price-sensitive customers. NB stands for Neighbor Business, emphasizing its community-oriented format.
The regional head of "Super HeSuan NB" revealed that they have refined two store formats of 600 square meters and 800 square meters, mostly street-front shops, offering about 1,500 SKUs, and excluding perishable flowers and live seafood. Among these, private-label products account for about 60% of sales. Turnover baskets and product cartons are placed directly on shelves, and the store decoration is simple—"extremely simple" and "extremely economical."
Since 2023, the Freshippo NB supply chain has been separated from Freshippo Freshippo, focusing on extreme cost-effectiveness and ensuring product differentiation. Based on the author's observations over the years, from 0 to 300 stores, the latest presentation shows that as a community discount supermarket with a hard discount model, "Super HeSuan NB" has taken shape in terms of store format, products, and operations.
"Super HeSuan NB" officially positions itself with the operational strategy of "three highs and three lows": high store efficiency, high labor efficiency, high product efficiency; low selling price, low loss rate, low gross margin. It mainly targets the three meals of pragmatic families, covering four major categories: fresh produce, 3R (ready-to-eat, ready-to-heat, ready-to-cook), standard products, and frozen foods, serving four core scenarios for community consumers: cooking at home, ready-to-eat/ready-to-cook, leisure and self-pleasure, and household daily use.
"Three highs and three lows" is the basic skill of the hard discount format. Over the past three years, "Super HeSuan NB" has used high-frequency, essential products, focusing on price and various demand dimensions, carefully selecting SKUs with "wide categories, narrow products." Through direct sourcing, centralized procurement, and deep cooperation, it achieves high product turnover and low-cost operations, delivering more competitive cost-effective products.
First, carefully selected SKUs, "wide categories, narrow products," have begun to take shape.
In the fresh milk category, compared to the richer selection at Freshippo Freshippo, "Super HeSuan NB" has streamlined to 11 products, covering various needs from protein content, capacity, to different price points, including small bottles, family large-capacity, basic protein standards, and high-value 4.0 private-label versions. Each product targets the high-frequency, essential scenarios of community families. "11 types of milk can basically meet all the needs of community families."
In the bakery category, "Super HeSuan NB" divides products into three sections: freshly baked in-store series (fermented, proofed, and baked in the back), fresh short-shelf-life room-temperature toast series, and refrigerated cake series, all produced in factories and delivered daily within 24 hours.
Each bakery section has both basic and upgraded versions. For toast, prices range from 6.6 yuan to 15.9 yuan, including basic white toast, fresh milk toast, healthier and younger options like cheese and plum, and lactic acid bacteria toast, as well as upgraded casein Hokkaido fresh milk toast.
Second, private-label products account for 60% of sales and are still increasing. Private-label products are the cornerstone of the hard discount model, achieving differentiation, avoiding homogeneous competition, eliminating brand premiums, and gaining unprecedented control over product costs. Large-scale centralized procurement and reverse customization further reduce costs.
Currently, the 5L private-label fragrant peanut oil is priced at 77.9 yuan, roughly 50% off similar market products.
The development principle for "Super HeSuan NB" private-label products is to lock in costs and raw materials on core basic products, ensure stable taste and quality, and then lower prices. At the same time, it also extends to some trendy products to meet the needs of consumers seeking novelty.
Overall, "Super HeSuan NB" products are divided into three tiers: "I have it, others have it, but mine is cheaper" basic large products; "I have it, others have it, but mine is better" series that improve the taste and quality of existing market products while lowering prices; and a small number of "I have it, others don't" series to meet the needs of first-tier or trendier consumers.
"Super HeSuan NB" private labels focus on large single products and scale cost reduction. For example, ensuring partner factory production lines run at full capacity per unit time, without changing products within a shift, reducing labor, thereby further lowering production, labor, and raw material costs for single products.
A person close to Freshippo revealed that "Super HeSuan NB" stores open for over a year have achieved daily revenues of over one hundred thousand yuan. In the first half of this year, new store openings in Jiangsu repeatedly broke records.
Freshippo DNA Hard to Replicate
ALDI has been in China for over six years and has opened fewer than 80 stores. But "Super HeSuan NB," as a local competitor, can start expanding within three years. A senior industry insider analyzed to the author, "This is closely related to the 'new infrastructure' of internet genes, supply chain, and brand momentum built by Freshippo over the past decade."
In terms of brand, as a community discount supermarket under Freshippo, backed by Freshippo Freshippo, "Super HeSuan NB" has more trust from the start than peers.
Relying on Freshippo's accumulated online and offline experience, "Super HeSuan NB" can also quickly open stores with an intelligent site selection system. Its private-label products are developed based on big data market research, with data-supported product selection and development, leading to higher operational efficiency and judgment accuracy.
More importantly, "Super HeSuan NB" has the natural advantage of sharing the supply chain with Freshippo Freshippo.
The toast series uses 2-3 tons of fresh milk raw materials daily and wheat flour, all sourced directly from dairy plants and brand manufacturers through Freshippo resources, reducing intermediate procurement links and costs, thus lowering toast prices.
A Freshippo employee revealed, "With the scale advantage of the entire Freshippo, 'Super HeSuan NB' can maximize supply chain efficiency." In some categories, "Super HeSuan NB" and Freshippo Freshippo coordinate procurement of raw materials in different specifications to reduce procurement costs.
In product development, following the hit product methodology proven by Freshippo Freshippo, "Super HeSuan NB" features fast R&D and iteration, bringing high user stickiness and sufficient industry differentiation.
Not only focusing on "cheap," "Super HeSuan NB" quickly responds to market changes, updates and upgrades product quality and popularity, and closely follows seasonal changes. For bakery products, the quarterly new product rate is 15%-20%. Although Mid-Autumn Festival has not yet arrived, "Super HeSuan NB" has already launched freshly baked mooncakes. It also sells persimmon-related refrigerated cake series before persimmons are widely available.
It is said that if a product fails to gain market validation within three months, "Super HeSuan NB" will immediately remove it. By locking in repurchase through product selection and differentiated private labels, and creating freshness with agile new product launches, without lowering quality standards at the same price, "Super HeSuan NB" turns "cheap and good" into a sustainable system capability.
The toast series is currently a star product for "Super HeSuan NB," with nearly 300 stores selling a total of 50,000 packs a day. The price is affordable, but quality and craftsmanship are not compromised. It uses Japanese hot water dough technique, fresh yeast low-temperature slow fermentation, fresh milk toast made without adding a drop of water, cold fresh milk and dough, 35% milk content, and butter content above 3.8%.
In "Super HeSuan NB," refrigerated craft beer replaces traditional beer and benchmarks against high industry standards. Partner factories have comprehensive quality management systems, certified with ISO 9001, HACCP, and BRCGS global food safety standards. The malt mainly comes from high-quality regions like Canada and Australia, providing a rich malt aroma, while hops are selected from the Czech Republic, the United States, and other places.
Hard Discount Format: Disrupting Market Structure
Currently, domestic consumption is becoming more rational and pragmatic. Consumers' demand for "quality-price ratio" and the general trend provide excellent soil for the hard discount format.
Some institutions predict that China's discount retail market will reach about 1.79 trillion yuan in 2023, accounting for about 3.8% of total social retail sales. Internet platforms and regional offline retailers are all entering, boosting the continuous growth of China's discount retail market.
Entering 2025, more players are entering the hard discount store format. In the community store sector, ALDI, which has been dormant in Shanghai for six years, has expanded to multiple cities in Jiangsu, Zhejiang, and Shanghai, and "Super HeSuan NB"'s performance in Jiangsu in the first half of this year has all drawn attention to the community hard discount store format.
"Super HeSuan NB" opened three stores in Ningbo on August 29. "Too many people squeezed in, as if it were free."
A Xiaohongshu netizen finally squeezed into one of the stores that night and was deeply impressed by its cheap prices and new products.
For ALDI, which is just beginning to penetrate the Yangtze River Delta, the influx of local players like "Super HeSuan NB" will bring considerable pressure for location. After all, it has strong technology and local supply chain, and is well-versed in local consumer tastes.
In some regional retail markets, new community discount supermarket brands with new products, cost-effectiveness, and higher efficiency will directly impact local traditional supermarkets.
A supermarket practitioner in Zhejiang admitted that his biggest sense of crisis now comes from "Super HeSuan NB" and ALDI. "They have raised efficiency to a level far beyond traditional supermarkets, and consumers are already tired of the old product systems in local markets. New brands and new products can well meet and iterate their daily needs."
Clearly, regional supermarkets are "passively" fighting a defensive counterattack. Lianhua Huashang's community hard discount store "Lianhua Fude" has opened 14 stores in Hangzhou. In July this year, the first six "Wumart Super Value" stores opened in Beijing, and Wumart Group regards it as a strategic priority, planning to open 25 stores in Beijing by the end of the year. Regional supermarkets like Wuhan Zhongbai Group have also begun to try discount stores, aiming to seize positions before foreign "barbarians" arrive.
"Super HeSuan NB" has national supply chain and scale advantages, with the ability to replicate in multiple locations. It is foreseeable that after penetrating the Yangtze River Delta market, it will definitely expand nationwide. Regional retailers need to respond faster.
China's retail industry is undergoing a structural change rarely seen in thirty years. From an industry perspective, the rise of the hard discount format is an efficiency reorganization initiated from the retail end around new consumer demands, which will drive the logic reconstruction of the entire industry chain. Formats that bring new value to consumers and are more efficient than peers will definitely have greater development space.
The future of retail will not be dominated by a single format. The official debut of "Super HeSuan NB" shows that a new efficiency war for supermarkets around community entrances is starting from the Yangtze River Delta market.