Freshippo Upgrades to Regional Management System and Establishes AI Committee to Accelerate Digital Transformation

Introduction: A Retail Giant's Dual Transformation

As competition in the new retail industry intensifies, Freshippo (Hema) is simultaneously advancing two deep-seated transformations — organizational restructuring and AI technology upgrades. According to 36Kr, Freshippo has internally completed a management restructuring of its fresh food business, shifting entirely from a city-based system to a regional system, while establishing a CTO-led AI Committee. This marks the Alibaba-affiliated new retail benchmark company's unprecedented embrace of the AI wave.

These moves represent not only a major strategic adjustment for Freshippo itself but also reflect the transformation pressures and opportunities facing the entire retail industry in the AI era.

Key Move One: 19 Cities Consolidated into 9 Regions for Comprehensive Management Efficiency Gains

One of the core measures in Freshippo's organizational restructuring is upgrading from the previous "city-based system," which used major cities as basic management units, to a "regional system" spanning the entire country. Specifically, the original 19 city-level divisions will be consolidated into 9 major regions, including the Shanghai Region, North China Region, Central China Region, South China Region, and others.

This adjustment signifies a significant streamlining of Freshippo's management hierarchy. Previously, each core city operated independently, which often led to redundant resource allocation and poor cross-regional coordination. Under the regional system, each region will oversee store operations across multiple cities, facilitating resource sharing, supply chain coordination, and unified operational standards within each region.

Industry analysts suggest the regional system will deliver three direct benefits:

• Flattened management: Reducing intermediate management layers so headquarters decisions can be transmitted more quickly to frontline stores
• Supply chain consolidation: Enabling more efficient coordination of procurement, warehousing, and logistics within each region
• Maximized talent utilization: Allowing management talent and technical teams to be flexibly deployed across cities within a region

Notably, the architectural design led by the Shanghai Region also reaffirms Shanghai's strategic position as Freshippo's headquarters and core market.

Key Move Two: Establishing an AI Committee to Build a Technology-Driven Engine

Compared to the organizational restructuring, Freshippo's establishment of an AI Committee has drawn even more attention. The AI Committee, led by Freshippo's CTO, will coordinate the research, development, and practical application of AI technologies at the company level.

Even more noteworthy is the introduction of the entirely new "AI BP" position as part of this transformation. Similar to the commonly seen HRBP (Human Resources Business Partner) role in enterprises, the AI BP's core responsibility is to embed within frontline business operations, serving as a bridge between AI technical capabilities and specific business needs. This design indicates that Freshippo is not simply treating AI as a standalone technology department but is instead attempting to permeate AI capabilities into every business scenario.

Simultaneously, Freshippo is optimizing its existing product and engineering architecture with the goal of achieving direct alignment between AI capabilities and business requirements. In other words, Freshippo aims to break the traditional linear process of "business submits requirements, technology implements" and instead build a new collaborative model where AI capabilities and business scenarios are deeply integrated.

From a technology deployment perspective, AI application scenarios at Freshippo are extremely diverse, covering at least the following key areas:

• Intelligent product selection and pricing: Using AI algorithms to optimize product mix and pricing strategies based on consumer data and market trends
• Supply chain forecasting: Predicting product demand at individual stores through AI models to reduce waste and improve turnover efficiency
• Intelligent customer service and marketing: Leveraging large language model capabilities to enhance customer service experiences and precision marketing effectiveness
• Store operations optimization: Using computer vision and other technologies to enable intelligent store displays and inventory management

In-Depth Analysis: The Strategic Logic Behind the Dual Transformation

Freshippo's simultaneous organizational reform and AI upgrade are not two isolated events but rather a tightly interconnected strategic combination.

From an industry perspective, since 2024, China's retail sector has been undergoing a profound reshuffling. Traditional supermarkets face sustained pressure, and competition among new retail players has shifted from pure scale expansion to refined operations and technology-driven strategies. Against this backdrop, Freshippo needs a more efficient organizational structure to support nationwide operational management while leveraging AI technology to build differentiated competitive advantages.

The regional system provides organizational support for scaled AI deployment. Under the previous city-based system, individual city teams may have operated independently in their technology applications, causing AI project advancement to become fragmented. Under the regional system, the AI Committee can more effectively promote AI projects uniformly at the regional level, ensuring concentrated and consistent technology investment.

On the other hand, the AI BP position reflects Freshippo's emphasis on the "last mile of technology implementation." In many enterprises' digital transformation efforts, the greatest challenge is not the technology itself but the disconnect between technology and business. The AI BP role is designed precisely to address this pain point, ensuring that AI capabilities are not "castles in the air" but can genuinely solve business problems and create commercial value.

From a broader perspective, Freshippo's transformation also represents an important trend in China's retail industry — a paradigm shift from "Internet + Retail" to "AI + Retail." If the core of new retail over the past decade was the integration of online and offline channels, the keyword for the next decade will be AI-driven end-to-end intelligence.

Future Outlook: A New Starting Point for AI Reshaping Retail

Freshippo's dual transformation undoubtedly sets an important reference point for the industry. As the AI Committee begins formal operations and the regional system is implemented and refined, Freshippo is expected to achieve several key breakthroughs within the next one to two years:

First, in terms of operational efficiency, AI-driven supply chain optimization and store management are expected to significantly reduce waste rates and operating costs — a development of great significance for the high-waste fresh food retail sector.

Second, in terms of user experience, AI-based personalized recommendations and intelligent services will further enhance consumers' shopping experiences, strengthening user engagement and repeat purchase rates.

Finally, in terms of industry impact, if Freshippo's practices prove successful, they will inevitably prompt more retail enterprises to follow suit, accelerating the AI adoption process across the entire industry.

Of course, the path of transformation is never smooth. Personnel adjustments and redistribution of responsibilities during the regional consolidation process, as well as balancing investment and returns during AI project implementation, will all be real challenges Freshippo must face. However, what is certain is that against the backdrop of accelerating AI penetration across all industries, Freshippo's strategic move is both decisive and forward-looking.

The AI race in the retail industry has officially begun.