Core Insights - In 2024, competition among large supermarkets in China has intensified, with Sam's Club achieving an annual revenue exceeding 100 billion yuan, significantly outperforming local competitors like Hema, Yonghui, and RT-Mart by over 20 billion yuan each [1][3] Company Strategy - Sam's Club, a membership-based store under Walmart, has a unique operational model that has contributed to its success in China since its first store opened in Shenzhen in 1996 [3] - The membership system, with an annual fee of 260 yuan, allows Sam's Club to precisely target middle-class families in China, who are willing to pay for quality and have higher consumption capabilities [4] - By leveraging membership fees as a significant source of profit, Sam's Club can focus less on product markups and more on understanding customer preferences through big data, leading to tailored product offerings [6] Pricing and Product Strategy - Sam's Club utilizes bulk purchasing and strong bargaining power with suppliers to offer competitive prices, often 20% lower than traditional supermarkets, while maintaining high quality through exclusive or custom products [8][9] - The store adopts a "few but excellent" product strategy, offering around 4,000 carefully selected items compared to the 30,000-40,000 items typical of traditional supermarkets, which reduces customer choice fatigue and enhances word-of-mouth marketing [8] - Sam's Club's commitment to quality and differentiation creates a strong barrier against competition, fulfilling the core needs of middle-class families for high-quality products at lower prices [9] Customer Experience - Sam's Club promotes a lifestyle brand by offering high-end products and a unique shopping experience, including generous sampling, which enhances customer enjoyment and engagement [11] - The average annual spending per member at Sam's Club is 13,000 yuan, with a renewal rate exceeding 60%, indicating strong customer loyalty compared to traditional supermarkets [11] Industry Implications - The success of Sam's Club in China highlights the importance of understanding consumer needs and providing targeted services, rather than merely selling products [13]