Core Viewpoint - The article emphasizes that the essence of membership-based supermarkets is not merely a replication of business models but a deep integration of supply chain, product strength, operational capability, and brand trust, which requires time to develop into a systematic project [1][5]. Group 1: Membership Supermarket Trends - Hema has decided to close all offline X membership stores by the end of August this year, marking a complete withdrawal from the membership store format [2]. - The membership supermarket format, which originated in the U.S. and entered China in the 1990s, requires consumers to pay a membership fee to gain shopping access, distinguishing it from traditional supermarkets [2][3]. - The initial enthusiasm for membership stores, sparked by Costco's success in Shanghai in 2020, has faded, with many retailers like Yonghui and Carrefour moving away from this business model [3]. Group 2: Challenges Faced by Membership Supermarkets - Membership supermarkets require a robust supply chain to ensure product uniqueness and cost-effectiveness, with Costco's model exemplifying this through its strict gross margin policy [3][4]. - Product strength is a core competitive advantage, necessitating a deep understanding of member preferences, as demonstrated by Costco's focus on high-income families and Sam's Club's appeal to the middle class [4]. - Operational capabilities are critical, with Hema's X membership store facing issues such as product quality fluctuations and member rights management, contributing to its decline [4]. Group 3: Brand Trust and Market Positioning - Membership stores operate on a "fan" business model, where brand trust is a significant competitive advantage, as profits are derived from membership fees rather than product markups [5]. - The decline of membership supermarkets reflects a rational return to the industry, prompting players to reassess their strengths and consider more practical market strategies [5].

Core Insights - The closure of Hema X membership stores indicates challenges faced by local membership store models in China, contrasting with the success of international players like Sam's Club [1][2][4] - Membership stores target middle-class families and high-end consumers, relying on high-frequency and high-ticket purchases to create customer loyalty [2][3] Group 1: Market Performance - Walmart's international business reported Q1 2025 revenue of $29.8 billion, with China contributing $6.7 billion, reflecting a 22.5% year-on-year growth, significantly above the global average [2] - Sam's Club in China has surpassed 5 million members by 2025, generating over 1.3 billion yuan in annual membership revenue [2] Group 2: Supply Chain Management - Successful membership stores like Sam's Club have a robust supply chain management system that encompasses product selection, quality control, logistics, warehousing, and pricing [3] - Sam's Club's product selection process involves optimizing supplier processes and even participating in product design, which is difficult to replicate [4] Group 3: Future Outlook - The exit of Hema X membership stores is seen as a temporary setback for local membership models, with expectations for more domestic companies to enter the market [4] - The future success of local membership stores will depend on refining supply chains and developing proprietary brands, rather than mere imitation of successful models [4]

Core Viewpoint - Hema's membership stores will cease operations entirely, marking the end of its attempt to establish a membership-based retail model in China [2][9][12]. Group 1: Store Closures - Multiple Hema X membership stores across the country have already announced their closure, with the last remaining store in Shanghai set to close on August 31 [4][9]. - As of now, only one Hema X membership store remains operational in Shanghai, which will also shut down soon, leaving no Hema X stores in operation [6][9]. Group 2: Business Strategy and Market Position - Hema X was launched in October 2020 as a separate membership store format, intended to serve as a "second growth curve" for Hema, aiming to compete directly with Costco [10][12]. - The membership model included two tiers: a 258 yuan/year gold membership and a 658 yuan/year diamond membership, targeting middle-class and high-end consumers [12]. - Despite initial expansion, with 10 stores opened by October 2023, the membership store format has struggled to maintain its market presence [10][17]. Group 3: Industry Context - The closure of Hema X comes amid a broader trend where local retailers have attempted to replicate the success of Costco, with various membership-based stores emerging since Costco's entry into the Chinese market in 2019 [14][16]. - Hema's strategic shift focuses on enhancing its core business through Hema Fresh and Hema NB community stores, moving away from the membership store model [17][19].

Core Viewpoint - Hema has completely shut down all its membership stores, marking a significant strategic shift away from its previously envisioned "second growth curve" that aimed to compete with Costco [2][5][8]. Group 1: Membership Store Closure - Hema X membership stores in Beijing, Suzhou, and Nanjing ceased operations on July 31, 2023, with the last remaining store in Shanghai also set to close by August 31, 2023 [2][4]. - The closure of all membership stores indicates Hema's decision to abandon this business model amid increasing competition and a slowdown in the domestic membership store market [2][6]. Group 2: Background and Development - Hema X membership stores were launched over four years ago, with the first store opening in Shanghai in October 2020, initially seen as a promising venture to rival Costco [5][6]. - The membership model included two tiers: Gold members at 258 yuan/year and Diamond members at 658 yuan/year, targeting middle-class families and high-end consumers [5][6]. Group 3: Strategic Shift - Hema's parent company Alibaba is reducing its retail footprint, selling off assets like Gaoxin Retail and Intime Department Store, which has influenced Hema's strategic focus [2][8]. - The new CEO, Yan Xiaolei, aims to achieve profitability and has shifted focus towards Hema Fresh and Hema Neighbor Business, moving away from the membership store model [8][10]. Group 4: Market Competition - The membership store sector has seen rapid growth, with competitors like Costco and Sam's Club expanding aggressively in China, while Hema struggled to differentiate its offerings [6][9]. - Hema's membership stores faced challenges in product differentiation and pricing, leading to consumer dissatisfaction regarding the value proposition of membership fees compared to regular retail prices [11][12]. Group 5: Future Plans - Hema plans to concentrate on its core businesses, Hema Fresh and Hema Neighbor Business, which are seen as more aligned with consumer shopping habits and preferences [9][13]. - Despite the closure of membership stores, Hema continues to offer membership benefits through partnerships and online platforms, indicating a potential pivot rather than a complete abandonment of the membership concept [14].

Core Viewpoint - Hema has completely abandoned its membership store model, which was initially seen as a "second growth curve" to compete with Costco, following the closure of all its membership stores across China [1][2][5]. Group 1: Business Strategy and Adjustments - Hema's parent company Alibaba is shrinking its retail footprint, selling off subsidiaries like Gao Xin Retail and Intime [1]. - The competitive landscape for membership stores in China has intensified, leading to a slowdown in overall expansion [1][4]. - Hema is reallocating resources to focus on its core businesses, Hema Fresh and Hema Neighbor Business (NB) [1][7]. Group 2: Membership Store Development and Closure - Hema X membership stores were launched over four years ago, with the first store opening in Shanghai in October 2020 [2][3]. - By October 2023, Hema had opened a total of 10 membership stores across major cities, including Shanghai, Beijing, Nanjing, and Suzhou [3]. - The closure of Hema X membership stores aligns with a management transition, as new CEO Yan Xiaolei aims for stable development and profitability [6][7]. Group 3: Market Competition and Consumer Response - The membership store sector in China saw rapid growth with the entry of Costco and Sam's Club, prompting local retailers to follow suit [4]. - Hema's membership store model faced challenges in differentiating its product offerings and maintaining competitive pricing, leading to consumer dissatisfaction [8][9]. - Despite the closure of physical membership stores, Hema continues to offer membership benefits through online platforms and promotional activities [10].

Core Viewpoint - Sam's Club China is facing backlash from its members due to the introduction of mass-market brands, which members feel dilutes the value of their membership and undermines the quality promise that distinguishes Sam's from regular supermarkets [6][17][29]. Group 1: Membership and Brand Strategy - Sam's Club China has over 5 million members, generating annual membership fees exceeding 1.3 billion yuan, and aims to maintain its appeal to the middle class by offering high-quality, unique products [9][38]. - The introduction of brands like Holley Friend has led to significant member dissatisfaction, with many feeling that the quality of products has declined and that they are now paying a premium for items available in regular supermarkets [12][18]. - Members have expressed their frustration through social media and have taken actions such as canceling memberships, indicating a strong reaction to perceived changes in product selection and quality [15][39]. Group 2: Product Quality Concerns - Reports indicate that the quality of products has deteriorated, with examples such as organic soybeans being downgraded from first to third grade quality, and changes in ingredient transparency leading to further distrust among members [32][34]. - There have been numerous complaints regarding food safety issues, including contamination in products, which have contributed to a decline in consumer trust [36][38]. - The rapid expansion of Sam's Club China has strained its supply chain management and quality control processes, making it difficult to maintain high standards [35][36]. Group 3: Market Position and Competition - The competitive landscape is changing, with Costco planning to open additional stores in China and local players like Hema and RT-Mart gaining traction, prompting Sam's Club to adjust its strategy to attract a broader customer base [23][29]. - The shift towards including more mass-market brands is seen as a response to changing consumer behavior, where members are increasingly engaging in "smart consumption" by purchasing both premium and budget items [23][27]. - Sam's Club's strategy reflects a broader industry trend of balancing elite offerings with more accessible products, but this has led to internal conflict regarding brand identity and member expectations [29][30].

Core Viewpoint - Sam's Club is facing a public relations crisis due to product selection issues, with topics related to "downgraded product selection" and "removal of popular items" trending on social media, accumulating over 140 million views [2][3] Group 1: Product Selection Controversy - The controversy began when consumers reported that Sam's Club removed high-repurchase-rate products like sun cakes and rice puddings, replacing them with common supermarket brands such as low-sugar snacks, leading to customer dissatisfaction [3] - The most criticized change involved domestic brands being rebranded with English names to create a false "high-end imported" image, which angered many members who felt betrayed [3] - A specific product, "Low Sugar Haoliyou Pie," received over 300 negative reviews for not meeting its advertised sugar reduction claims, raising concerns about its ingredients and contradicting Sam's Club's "strict quality" promise [3][5] Group 2: Quality Control Issues - Sam's Club's quality control has come under scrutiny, with multiple complaints about products like organic milk showing signs of spoilage, leading to urgent product recalls [6] - In 2024, Sam's Club was reported to have faced five incidents related to food safety within ten days, including issues with meat products and labeling discrepancies, resulting in administrative penalties for selling substandard goods [7][8] Group 3: Membership and Customer Experience - Complaints about Sam's Club have exceeded 11,579, with over 1,000 related to poor after-sales service, highlighting a growing dissatisfaction among members regarding customer support [10] - Members have expressed frustration over the perceived lack of value in their membership, with some considering switching to competitors like Costco due to unfulfilled promises of benefits [10] Group 4: Strategic Changes and Market Competition - Sam's Club has recently undergone organizational changes and is accelerating its expansion strategy, with plans to open 8 to 10 new stores in 2025, despite the challenges of maintaining product quality and selection [11][12] - The competitive landscape is intensifying, with rivals like Costco and Hema aggressively targeting Sam's Club's customer base through differentiated product offerings and pricing strategies [13] Conclusion - The impressive membership numbers, exceeding 5 million, mask an imbalance between rapid expansion and quality assurance, indicating that Sam's Club must refocus on its core promise of quality to retain customer trust [14]

Core Viewpoint - Sam's Club is facing member dissatisfaction due to a decline in exclusive product offerings and the introduction of common brands, raising questions about the value of its membership fees [1][3][5] Group 1: Product Offering Changes - Sam's Club has removed over 200 exclusive products in recent years, with its private label product share dropping from 38% to 30% [1][3] - The introduction of popular brands like Haoliyou and Weilong has led to member complaints, as they feel they are paying high membership fees for products available in regular supermarkets [3][5] - Despite the decline in exclusive products, some private label items still rank high in sales, indicating ongoing consumer interest [3] Group 2: Member Expectations and Market Position - Members express dissatisfaction with the shift from "exclusive selection" to "ordinary supply," which undermines the perceived value of membership [5][6] - The current strategy of introducing common brands contradicts market trends, as consumer preferences have shifted towards product differentiation and exclusivity [6][9] - The competitive landscape is intensifying, with rivals like 1号会员店 and Hema actively introducing similar products, further challenging Sam's Club's market position [1][9] Group 3: Trust and Brand Loyalty - The changes in product selection have led to a trust crisis among members, who feel that the value proposition of the membership is diminishing [9] - Transparency in pricing and product sourcing, as demonstrated by competitors like Pang Donglai, is becoming increasingly important to consumers [9] - Experts suggest that the core of membership retail is not just selling products but building trust, emphasizing the need for Sam's Club to return to its roots of quality and exclusivity [9]

Core Insights - Sam's Club has recently replaced high-repurchase items like sun cakes and low-sugar egg yolk pastries with more common snacks, leading to member dissatisfaction and questioning of the store's unique value proposition [1][2] - The shift in product selection disrupts the established "high quality, high cost-performance" image that Sam's Club has built, blurring its differentiation from other retail channels [1][2] - The reliance on self-owned brands, which accounted for 40% of sales, is crucial for maintaining member trust and loyalty, as members pay annual fees not just for discounts but for a unique lifestyle experience [1][3] Membership Dynamics - The dilution of the "identity marker" for members occurs as Sam's Club introduces more mainstream brands, leading to a perceived decrease in product value and a collapse of self-identification among members [2] - Members' fees represent a premium for the brand's unique value and exclusive rights, and any failure to deliver on core promises can lead to questioning the value of membership [2][3] - The challenge for Sam's Club lies in balancing expansion with brand loyalty, as attempts to attract a broader customer base through mainstream products may sacrifice existing member loyalty [2][3] Market Positioning - The conflict between maintaining high-value perception and the need for product scarcity and quality stability presents a paradox for membership-based economies [3] - Sam's Club's recent turmoil reflects a broader conflict between consumerism narratives and commercial realities, emphasizing the importance of maintaining a "circle culture" through selective product offerings [3] - The company must reassess its product selection strategy to either uphold the symbolic value of membership or shift towards broader market coverage, as a decline in self-owned brand representation could undermine quality assurance [3]

Core Viewpoint - The incident involving the temporary listing and quick removal of Haoliyou snacks at Sam's Club highlights a deeper issue regarding the trust and expectations of the middle-class consumer in China, revealing a potential strategic crisis for the brand [3][4][5]. Group 1: Understanding the Incident - The backlash against Haoliyou snacks signifies a breach of trust among Sam's Club members, who associate the brand with a refined and quality-driven shopping experience [3][4]. - The core issue is not the product itself but the social narrative it represents, reflecting how the middle class defines its aesthetic standards and values [4][5]. Group 2: Forces at Play - Businesses today are influenced by two opposing forces: the "efficiency vortex," which prioritizes scale and cost, and the "trust bedrock," which relies on uniqueness and long-term relationships [7][8]. - Sam's Club has traditionally operated within the trust bedrock but is now attempting to expand into the efficiency vortex, creating tension [9]. Group 3: Trust and Membership Model - Sam's Club's business model is built on a membership system that fosters long-term trust through a commitment to quality and service [11][12]. - This trust is crucial for the middle-class consumer's purchasing decisions, as it allows Sam's Club to focus on cost reduction and supply chain optimization rather than short-term profit maximization [13][15]. Group 4: The Impact of Social Media - Social media has transformed customer-brand relationships, amplifying any perceived breaches of trust and turning individual experiences into collective narratives [18][19]. - The "Haoliyou incident" serves as a catalyst for questioning the trust relationship between Sam's Club and its consumers, highlighting the fragility of middle-class narratives [19][20]. Group 5: Expansion Challenges - As Sam's Club seeks to expand, it faces the challenge of maintaining its established standards while increasing store numbers and purchasing volumes [22][23]. - The need for growth may lead to compromises that could erode the trust built with its consumer base, as any deviation from established standards can create cracks in the brand's credibility [23][24]. Group 6: Competitive Landscape - Sam's Club's competitors, such as Hema and traditional supermarkets, are not only vying for market share but are also adopting different operational strategies that emphasize efficiency over curated experiences [25][26]. - The rise of instant shopping platforms poses a potential threat to Sam's Club's business model, as consumers may prioritize immediate availability over the curated shopping experience [27].