Core Insights - Hema X, once a promising retail format aimed at competing with Sam's Club and Costco, is closing its last store, marking the end of its operations [1][2][5] - The membership store model, which required annual fees for entry, failed to meet growth expectations and contributed less than 10% to Hema's overall sales by 2023 [4][3] - Hema's strategy of price competition, including aggressive discounts, did not resonate with consumers who prioritize quality over price [14][15] Company Overview - Hema X opened its first store in Shanghai on October 1, 2020, and expanded to 10 locations across major cities like Beijing, Nanjing, and Suzhou [2] - The business model included a membership system with annual fees of 258 RMB for gold members and 658 RMB for diamond members, alongside a promise of fast delivery services [2][3] - Hema's founder claimed that Hema X was designed to cater to Chinese consumer preferences, but it ultimately did not achieve its intended market penetration [3] Financial Performance - Hema's overall sales reached over 75 billion RMB in the fiscal year ending March 2025, while Hema X's contribution remained minimal [4] - Hema's core business, Hema Fresh, has over 420 stores, with a target daily sales of 150,000 RMB per store, indicating a strong performance in its primary operations [4] Market Comparison - In contrast to Hema X's decline, Sam's Club has seen significant growth in China, with a 22.5% increase in net sales and over 40% growth in membership revenue [6][8] - Sam's Club's strategy focuses on a limited selection of high-quality products, which has fostered strong brand loyalty among consumers [7][12] Industry Trends - The closure of Hema X reflects broader challenges faced by domestic membership-based supermarkets in China, as evidenced by similar struggles of international brands like Metro [17] - Despite the setbacks, other retail formats, such as JD's 7Fresh and local brands like Pang Donglai, continue to explore innovative business models in the grocery sector [14]