Core Viewpoint - The closure of Hema X membership stores in Beijing indicates a strategic shift for Hema, moving away from the membership supermarket model, while Sam's Club continues to expand aggressively in the same market segment [3][13][19]. Summary by Sections Hema X Membership Store Closure - Hema X membership stores will cease operations in Beijing by July 31, 2025, following a series of closures in other cities [3][4]. - The membership fee structure for Hema X included tiers such as Gold (258 RMB/year) and Diamond (658 RMB/year), similar to Sam's Club's pricing [4][5]. - Hema X had approximately 3 million paid members by the end of 2022, compared to Sam's Club's 4 million members in China [5][6]. Signs of Decline - The decline of Hema X stores was foreshadowed by reduced customer engagement and product availability, with reports of closed sections and diminished product quality [8][10][11]. - Customers noted a significant drop in the perceived value and quality of products, leading to decreased foot traffic and loyalty [11][12]. Strategic Shift and Market Dynamics - Hema's strategic pivot is evident as it focuses on its core businesses, Hema Fresh and Hema Neighborhood, while discontinuing the Hema X model [18][19]. - In contrast, Sam's Club is expanding its footprint, with plans to open 8-10 new stores annually starting in 2025, indicating a robust growth strategy [22][23]. Membership and Product Structure Comparison - Hema's membership system created confusion among consumers due to overlapping benefits with Hema Fresh, leading to a decline in Hema X store visits [26][27]. - Sam's Club maintains a stable membership structure, while Hema's recent discount strategies have undermined the value proposition for its members [28][30]. Supply Chain and Product Quality Issues - Hema's shift towards lower pricing has affected product quality and supplier relationships, resulting in a reduction of SKUs and a decline in premium offerings [31][32]. - In contrast, Sam's Club emphasizes quality control and supplier relationships, ensuring a consistent product offering that appeals to consumers [33][34].

Core Viewpoint - Hema X membership stores in Beijing will cease operations by July 31, 2025, indicating a strategic retreat from the membership-based supermarket model, while Sam's Club continues to expand aggressively in the same market [1][7][9]. Group 1: Store Operations and Membership Model - Hema X membership stores, similar to Sam's Club, required a membership fee for entry, with initial fees set at 218 yuan per year, later adjusted to 258 yuan for gold members and 658 yuan for diamond members [1][2]. - As of the end of 2022, Hema X had nearly 3 million paid members, while Sam's Club had around 4 million, showing a competitive landscape [2]. - The closure of the last Hema X store in Beijing follows a trend of declining membership and customer engagement, with reports of reduced product offerings and customer visits [3][5][6]. Group 2: Market Dynamics and Competitive Landscape - Hema's retreat from the membership model contrasts sharply with Sam's Club's expansion, which plans to open 8-10 new stores annually starting in 2025, significantly increasing its market presence [11][12]. - Hema's strategic shift is attributed to a broader focus on its core businesses, leading to the closure of multiple Hema X locations and a pivot towards profitability in its remaining operations [9][12]. - The differences in membership service structures and product offerings between Hema and Sam's Club have contributed to Hema's struggles, with Hema's membership benefits perceived as less valuable compared to Sam's [12][14]. Group 3: Product Quality and Supply Chain Issues - Hema X has faced criticism regarding product quality and value, with customers noting a decline in the quality of fresh produce and an increase in prices, leading to a loss of competitive edge [5][6][16]. - The shift in Hema's pricing strategy has resulted in the removal of many SKUs and a focus on lower-cost suppliers, which has negatively impacted product quality and supplier relationships [16][17]. - In contrast, Sam's Club maintains a strong emphasis on quality control and supplier relationships, which has helped it retain customer loyalty and market share [16][17].