Core Insights - Hema's X membership store model, once seen as a promising new retail strategy, is set to close completely by August 31, marking a significant retreat from the membership store market in China [1][4] Group 1: Store Operations and Closure - As of August 5, only four Hema X membership stores remain operational, with the last one in Shanghai announcing its closure [1] - The X membership store model was launched in October 2020, aiming to create a unique membership shopping experience, but has failed to sustain its presence in the market [1][2] Group 2: Expansion and Membership Statistics - In 2021, Hema X membership stores experienced rapid expansion, with a goal to surpass Hema Fresh, reaching a membership count of 2.97 million by the end of the 2022 fiscal year [2] - Membership fee revenue contributed 588 million yuan, indicating a significant financial input from this segment [2] Group 3: Strategic Shift and Future Direction - In 2023, Hema paused membership renewals, indicating a strategic pivot towards Hema Fresh stores and community discount stores, deeming the X membership store as a non-strategic business [4][5] - Following a leadership change in March 2024, Hema reported nine consecutive months of profitability and a 50% year-on-year increase in customer numbers, contrasting sharply with the declining X membership store segment [5] Group 4: Market Challenges and Competitive Landscape - Experts suggest that the failure of Hema X membership stores stems from a lack of core retail values and service, particularly when compared to established competitors like Sam's Club and Costco [6] - Economic downturns and consumer fatigue have further exposed the weaknesses in Hema's membership model, highlighting issues with product differentiation and supply chain efficiency [6]