Zhitong Finance App News, Li Baoge Group (01869) announced that the Group and Shenzhen Hema Network Technology Co., Ltd. (“Shenzhen Hema”), a subsidiary of Alibaba Group, signed a strategic cooperation agreement on December 16, 2019. The cooperation agreement allows the Group to enter China's rapidly growing food and beverage takeout and food delivery market through an innovative online and offline (O2O) retail model combining physical stores and e-commerce platforms.
According to the cooperation agreement, the company will launch the company's brand products at Hema Xiansheng physical stores and exclusively provide customers with Hong Kong-style grilled meal food prepared on the spot at specific Hema Xiansheng stores, as well as unique dishes such as soup, dim sum, desserts, and holiday food. Hema Xiansheng is a new retail flagship owned by Alibaba Group and managed by Shenzhen Hema. Hema Xiansheng provides the company with comprehensive online and offline platforms, site facilities and technical support, including marketing promotion, online sales channel resource coordination, potential customer development, and online and offline (O2O) channel construction.
According to the cooperation agreement, the company promised to set up no less than ten stores in Hema Xiansheng by December 15, 2020. The company will attract more young people by making full use of Hema Xiansheng's brand awareness and high customer traffic, and set up multi-channel sales to effectively penetrate the Chinese takeout and food delivery market. Through the launch of the company's Hong Kong-style yakimai and other signature dishes, Hema Xiansheng, it will provide its customers with a new shopping experience.
Since the company's storeroom floor in Hema Xiansheng is larger than that of existing traditional high-end Cantonese restaurants, investment costs will be greatly reduced, and the company will transition to a capital-light business model. This cooperation allows the company to commercialize famous yakiniku and dishes under the “Li Bao Ge” brand and seize huge business opportunities in China's huge online and offline retail catering market.