(Yicai Global) April 20 -- Super Species, a chain of innovative fresh food shops set up four years ago to compete with Alibaba’s Hema Fresh, no longer forms the core business of Chinese supermarket operator Yonghui Superstores, Beijing News reported today, citing a company official.

The person described the closure of Super Species outlets, which combine retail and catering, in the cities of Chongqing and Shenzhen as a “normal business adjustment.” But he said that despite the pandemic, Yonghui had opened 114 new supermarkets last year alone.

Super Species was launched in 2017 to compete with Hema Fresh, which was set up by Alibaba Group Holding the year before. Tencent Holdings bought a 15 percent stake in Super Species’ operator Yonghui Yunchuang Technology at the end of 2017, opening up another battleground between Alibaba and Tencent.

Recent media reports said Super Species in Chongqing had gradually closed, with the city’s last one also in the process of packing up. Several also shut in Shenzhen and Beijing. In February, it was reported that Yonghui would only keep Super Species stores in Fuzhou in southeastern Fujian province, where the firm’s headquarters are located. But Yonghui denied that.

Just 20 percent of the more than 80 Super Species stores across China were profitable in 2019. Yonghui Yunchuang posted a total loss of CNY1.3 billion (USD200 million) from 2017 to 2019, dragging on its parent’s performance.

It was only last year, amid Covid-19, that Yonghui Yunchuang vigorously developed its home delivery business to turn a profit.

Editor: Peter Thomas