Core Viewpoint - Hema's decision to exit the membership store business reflects a broader trend in the Chinese retail market, indicating a shift away from the membership supermarket model that gained popularity in recent years [1][3][4] Group 1: Hema's Membership Store Closure - Hema will close all its offline X membership stores by the end of August this year, marking its exit from the membership store sector [1] - The X membership store model, initiated by Hema in 2020, required consumers to hold a membership card to shop, with annual fees of 258 yuan and 658 yuan [1] Group 2: Market Trends and Competitor Actions - The membership supermarket model gained traction in China after Costco's successful opening in Shanghai in 2020, prompting various retailers like Hema, Yonghui, Carrefour, and Metro to enter the market [3] - However, five years later, membership stores are fading from the business strategies of these retailers [3][4] - Yonghui and Metro have not mentioned warehouse membership stores in their recent annual reports, while Carrefour's first membership store in China closed in 2023 [4] Group 3: Challenges Facing Membership Supermarkets - Successful membership supermarkets rely on strong supply chain networks, precise product positioning, operational excellence, and brand trust [4] - Costco and Sam's Club have built unique product procurement pools through global supply chains and have tailored products based on member preferences [4] - Hema's X membership store faced issues such as product quality control fluctuations and membership rights management problems, contributing to its decline [4] Group 4: Broader Implications for the Retail Industry - The exit of Hema from the membership store model signifies a rational return in the retail industry, as the initial enthusiasm wanes [5] - The essence of membership supermarkets is not merely a replication of business models but a deep integration of supply chain, product strength, operational capability, and brand trust [5] - Retailers are encouraged to reassess their strengths and seek more suitable development directions rather than forcing entry into mismatched business areas [5]

Core Viewpoint - Hema is shifting away from its ambition to replicate the Sam's Club model in China, as evidenced by the closure of several Hema X membership stores and a strategic pivot towards expanding its Hema Fresh and Hema NB formats [2][4][6]. Group 1: Hema's Strategic Shift - Hema X membership stores will reduce from a peak of 10 to 5 locations nationwide due to business adjustments [4]. - Hema plans to open nearly 100 new Hema Fresh stores in the new fiscal year, indicating a focus on core business areas [4][6]. - The closure of Hema X stores signals a departure from the membership model, as Hema aims to concentrate on Hema Fresh and Hema NB [4][6]. Group 2: Challenges Faced by Membership Stores - Other membership-based supermarkets like Yonghui and Carrefour are also facing operational difficulties, with reports of store closures and business contractions [2][9]. - The initial enthusiasm for membership supermarkets in China has waned, as many local retailers struggle to adapt the Sam's model to the Chinese market [9][12]. - The performance of Sam's Club in China remains strong, with a reported sales figure of 100.5 billion yuan and 50 stores by 2024, contrasting sharply with the struggles of local competitors [14][15]. Group 3: Market Dynamics and Future Outlook - The collective retreat of local "Sam's Club" imitators highlights the challenges in supply chain management, brand recognition, and operational efficiency compared to established players like Sam's Club [14][15]. - The retail landscape is evolving, and the ability of local companies to adapt and find their unique paths will be crucial for future success [12][15].