Behind Pupu Supermarket’s Aggressive Expansion

Just as I stepped out of my residential building, a young man in his early twenties approached me. He was wearing a black T-shirt with the green characters “Pupu” printed on the right chest and back. With no promotional materials or gifts in hand, he directly pitched the app to me.

In county-level markets, a single Pupu station covers a 3-kilometer radius, handling several thousand orders daily with a high repeat-purchase rate. The station in my area has over a hundred employees. Every time delivery services open up for a new neighborhood, the ground promotion team swarms in. This has created a peculiar sight where dozens of promoters take over a single residential community. A large group of them—wearing green vests and riding electric scooters with massive green baskets attached to the back—can be seen scattered around: some at the main gate, some on the road outside, and others just cruising leisurely through the neighborhood, looking quite relaxed and unhurried.

This year, Pupu has been expanding aggressively across Fujian province (including Putian, Zhangzhou, Ningde, and Pingtan), with Ningde being the next stop for their ground promotion team. Their strategy is highly coordinated: wherever a new station opens, the entire promotion team mobilizes for a collective campaign.

Near our neighborhood, competition is already fierce. There are five fresh food supermarkets, a Yonghui Supermarket, and various grocery delivery options available on flash-sale platforms. Now, Pupu has joined the fray. However, there are currently no internet-based community discount stores in this area yet.

Can they actually turn a profit with this kind of expansion? Staffing over a hundred people for a station with only a few thousand daily orders is clearly a loss-making operation. My guess is that this might be tied to their ongoing acquisition negotiations with Alibaba (especially since Pupu recently launched on Taobao Flash Sale). Are they burning cash to drive traffic and boost performance metrics simply to gain leverage in the negotiations?

If the acquisition goes through, there will likely be business adjustments, followed by a wave of layoffs.

Looking at their marketing strategy, the offline promoters do not hand out free gifts on the spot. Instead, gifts are offered only after placing an online order, which makes user acquisition harder. On top of that, new users are required to place an immediate order with a minimum actual payment of 18 RMB (likely utilizing a “spend 26, get 8 off” coupon), making the promotion even more difficult. The promoters have a KPI of securing several hundred active users per month. To offset these friction points, Pupu relies on a strength-in-numbers approach. The goal of this strategy seems to be lowering overall acquisition costs while ensuring the quality of the newly acquired active users.

Compared to rivals like Hema, Dingdong, and Xiaoxiang, Pupu’s plastic bags are extremely thin, making you feel like they could rip at any moment. Dingdong and Xiaoxiang have the sturdiest bags, while Hema charges a packaging fee but offers rather mediocre bag quality.

The fresh food business is undeniably tough. It involves traditional community supermarkets, e-commerce platforms (discount stores, delivery apps, group buying), neighborhood shops, and wet markets. It is an incredibly difficult industry to navigate, and finding a unique differentiator is the only way to survive.