Consumers shop at a Freshippo outlet in Putuo district, Shanghai, on March 13. FAN JIANLEI/FOR CHINA DAILY

Freshippo, the omnichannel supermarket chain of Alibaba Group Holding\r\n Ltd, is planning to incubate 100 new food and beverage brands this year\r\n through an initiative called "Freshippo Xccelerator".

Leveraging the company's proprietary customer insights derived from \r\nconsumption big data as shoppers purchase from its mobile app and 300 \r\nphysical stores nationwide, the company aims to help merchants create \r\nand customize offerings that have a high propensity to "go viral", \r\naccording to Hou Yi, president of Freshippo.

It is utilizing zero kickoff capital and no fee collaboration, and \r\noffers free marketing resources to promote emerging brands, Hou said at a\r\n news conference in Shanghai in late May.

"Today's China is seeing the tremendous rise of domestic fast-moving \r\nconsumer goods, and we are working hard to ride this wave," Hou said.

Freshippo said it will focus on innovation collaboration with four \r\ntypes of brands: its existing key account brands, high-flying consumer \r\nbrands with a critical mass of avid online followers, catering \r\nenterprises and time-honored local brands.

Hou said it aims to incubate 100 such brands per year, and \r\n"cooperation on the capital front is also likely", though he did not \r\nelaborate.

Freshippo is adept at coining crossover collaboration and making \r\nnovel offerings a splash in the digital sphere. Just last month, the \r\ncompany came up with an iced, yellow rice wine-flavored crawfish, which \r\nis a summertime favorite among Chinese diners.

"We really want to bring old-time memories to local diners, as they \r\nget a bite of innovative dishes," said Chen Meijun, Freshippo Shanghai's\r\n manager for catering and"3R", which stands for the company's pledge to \r\noffer "Ready to cook, Ready to heat and Ready to eat" products.

Teaming up with local brewery Shanghai Jinfeng Wine, Freshippo is \r\nalso using rice liquor as an ingredient to produce chocolate cakes, \r\nhoney cakes and a traditional Chinese pastry.

Other successful cases include the blend of a traditional sticky rice\r\n pastry with internet celebrity milk tea brand Heytea, which quickly \r\nbecame a sought-after item since it debuted.

Customers' desire for novel culinary experiences is driving sales of \r\nimported food and snacks, according to Lu Xiao, Freshippo general \r\nmerchandise deputy general manager. This has propelled the introduction \r\nand co-creation of innovative products like Russian biscuits and chili \r\nsauce from Rwanda.

Between 2020 and 2025, total spending on supermarket products in \r\nChina is projected to grow to 12 trillion yuan ($1.88 trillion) from 9 \r\ntrillion yuan, said IDG Capital.

Among these supermarkets, e-commerce penetration is likely to surge \r\nfrom 17 percent in 2020 to around 50 percent in five years, giving an \r\nextra edge for those offering seamless online-to-offline experiences, \r\nsaid Sun Yuhan, managing director of IDG Capital.

"Marketplaces offering differentiated, experience-driven products, \r\nand with clear target audience profiles in their minds, will gain a \r\nstrong foothold," Sun said. "On the contrary, those with homogenized \r\nproduct portfolios occupying massive spaces are likely to lose their \r\nallure."