Core Insights - The article highlights the success of "鹿岛会员店" (Lushang Membership Store) as a low-cost alternative to established brands like Muji, Ikea, and Uniqlo, attracting 5 million members with a membership fee of 20 yuan and generating an annual revenue of 4 billion yuan [1][3][30] Membership Strategy - 鹿岛会员店 has gained a significant membership base by offering a low entry fee of 20 yuan, making it accessible compared to competitors like Sam's Club and Costco [14][30] - The store allows members to share their membership with friends and family, enhancing its appeal [16] Pricing and Product Strategy - 鹿岛's pricing strategy is aggressive, with products priced significantly lower than competitors; for example, a basic T-shirt is priced at 19.9 yuan compared to Uniqlo's 79 yuan [10][12] - The store focuses on essential items that are convenient and affordable, appealing to budget-conscious consumers [8][30] Store Layout and Experience - 鹿岛's store design mimics successful elements from its competitors while emphasizing low prices, creating a unique shopping experience [10][18] - The store features a flower market at the entrance, attracting foot traffic and enhancing the shopping experience [18][20] Supply Chain and Cost Management - 鹿岛 has developed a robust supply chain by collaborating with over 100 small manufacturers, allowing for cost-sharing and inventory management [34][36] - The company employs a direct purchasing strategy, paying suppliers immediately to secure better prices and quality [40] Market Position and Future Challenges - 鹿岛 has positioned itself as a leader in the low-cost retail segment, capitalizing on consumer trends favoring affordability [30][32] - However, the sustainability of its business model is questioned due to reliance on low prices and potential competition from imitators [42][44]

Core Insights - Hema has decided to completely shut down its membership store format, marking the end of its attempt to establish a second growth curve that aimed to compete with Costco [2][4] - The closure of all Hema X membership stores indicates a strategic shift towards focusing on its core business of Hema Fresh and outlet formats [4] Summary by Sections Store Closures - Hema X membership stores in Beijing, Suzhou, and Nanjing will cease operations on July 31, 2023, leaving only one store operational, which is also set to close on August 31, 2023 [2][4] - The first Hema X membership store opened in Shanghai in October 2020, and by October 2023, a total of 10 stores had been established across major cities [4] Customer Experience - Observations from the Beijing store indicated that most shelves were empty, with only a few items left for sale, and minimal customer traffic was noted [4] Membership Structure - Hema X offered two membership tiers: a gold membership at 258 yuan per year and a diamond membership at 658 yuan per year, targeting middle-class and high-end consumers [4] Strategic Shift - The decision to close all membership stores is described as a proactive business adjustment by Hema, focusing on enhancing its fresh produce supply chain and delivery capabilities [4]

Core Viewpoint - The closure of Hema's last X membership store in Shanghai marks the end of its membership store experiment, reflecting a broader trend of membership store failures in China [1][4]. Group 1: Membership Store Closures - Hema's last X membership store will officially close on August 31, 2023, completing the shutdown of all 10 Hema X membership stores nationwide [1]. - Metro has also struggled with its membership model, closing four membership stores in major cities since 2024, indicating a failure to establish a sustainable membership business [3]. - Carrefour has drastically reduced its store count from over 300 to just 4, following its acquisition by Suning, which has seen little success in innovating the brand [3]. Group 2: Comparison with Established Brands - Established membership stores like Sam's Club and Costco have expanded cautiously, with Sam's Club operating around 52 stores in China since 1996, while Costco has only opened 7 stores by 2025 [4]. - In contrast, local brands have aggressively opened membership stores, which has led to high financial demands and unsustainable growth [4]. Group 3: Consumer Behavior and Market Dynamics - Chinese consumers generally prefer free entry and low-margin sales, leading to low acceptance of membership fees, even for established brands like Sam's Club and Costco [4][5]. - The primary consumer base willing to pay for membership is the middle class, but this demographic has shrunk, limiting the potential for large-scale expansion of membership stores [5]. Group 4: Supply Chain and Operational Challenges - The success of membership stores heavily relies on strong global supply chain integration and proprietary brand development, which local brands lack [6][8]. - Local brands often depend on existing supply chains for imported goods, resulting in high product homogeneity and reduced market appeal [8]. - Membership stores typically offer a limited SKU selection to control costs, which can lead to inventory issues if product selection fails [9]. Group 5: Future Outlook - The closures of various membership stores signal a need for local brands to reassess their strategies, focusing on supply chain capabilities, consumer habits, and operational models to potentially develop a successful domestic membership store brand [9].

Core Viewpoint - Hema's X membership stores are set to close, marking a significant shift in the company's strategy as it focuses on its main store formats and discount models [1][2][4]. Group 1: Closure of Hema X Membership Stores - Hema has begun shutting down its X membership stores, including locations in Beijing, Suzhou, and Nanjing, with the last store in Shanghai set to close on August 31, 2025 [1][3]. - The closure aligns with Hema's strategic focus on its main store formats and discount stores, as indicated by industry insiders [2][4]. - Hema X membership stores were launched in 2020, aiming to compete with Costco's membership model, but have not met growth expectations [3][4]. Group 2: Industry Context and Challenges - The membership store model in China has faced challenges, with Costco experiencing low membership renewal rates of 62% compared to a global average of 90% [5][6]. - Other retailers, such as Metro, are attempting to differentiate themselves by increasing the proportion of unique products offered [5]. - Hema's exit from the membership store segment reflects a broader trend where traditional retailers are moving away from membership models in favor of more established formats [7]. Group 3: Hema's Strategic Shift - Hema is pivoting towards hard discount formats and targeting lower-tier markets to create a new growth avenue [8]. - The company has merged its neighborhood and outlet stores into the "Hema NB Division," focusing on low-cost, high-frequency essential goods [8]. - Hema aims to open nearly 100 new fresh stores in 2025, primarily in third and fourth-tier cities, while expanding its neighborhood and outlet store presence [9].

Core Insights - The closure of Hema X membership stores marks a strategic shift rather than a mere reduction in scale, focusing on a broader consumer base rather than a limited membership model [2][4] - Hema's rapid expansion of X membership stores initially showed promise, but consumer dissatisfaction and operational challenges led to a decline in sales contribution [3][5] - The retail landscape is shifting towards community-oriented and cost-effective shopping options, with Hema adapting its strategy to target lower-tier cities and broader consumer demographics [7][9] Company Strategy - Hema X membership stores were launched in October 2020, aiming to create a Chinese brand in the warehouse membership model, but faced significant challenges in brand recognition and consumer loyalty [2][3] - The decision to exit the membership store model is seen as a necessary and logical step, given the operational complexities and market challenges faced by similar retailers [4][5] - Hema is now focusing on a dual-track strategy, expanding its Hema Fresh stores and targeting lower-tier cities, with a goal of achieving a GMV of 100 billion yuan in three years [7][8] Market Dynamics - The closure of Hema X stores reflects broader challenges faced by traditional supermarkets and membership models in China, with competitors like Carrefour and Metro also struggling [5][6] - Successful membership models, such as Sam's Club, rely on strong supply chain integration and consumer loyalty, which Hema has struggled to establish [5][6] - The down-market strategy is driven by the significant growth potential in lower-tier cities, where consumer spending is increasing and infrastructure improvements are enhancing shopping convenience [8][9]

Core Insights - Hema's X membership store model, once seen as a promising new retail strategy, is set to close completely by August 31, marking a significant retreat from the membership store market in China [1][4] Group 1: Store Operations and Closure - As of August 5, only four Hema X membership stores remain operational, with the last one in Shanghai announcing its closure [1] - The X membership store model was launched in October 2020, aiming to create a unique membership shopping experience, but has failed to sustain its presence in the market [1][2] Group 2: Expansion and Membership Statistics - In 2021, Hema X membership stores experienced rapid expansion, with a goal to surpass Hema Fresh, reaching a membership count of 2.97 million by the end of the 2022 fiscal year [2] - Membership fee revenue contributed 588 million yuan, indicating a significant financial input from this segment [2] Group 3: Strategic Shift and Future Direction - In 2023, Hema paused membership renewals, indicating a strategic pivot towards Hema Fresh stores and community discount stores, deeming the X membership store as a non-strategic business [4][5] - Following a leadership change in March 2024, Hema reported nine consecutive months of profitability and a 50% year-on-year increase in customer numbers, contrasting sharply with the declining X membership store segment [5] Group 4: Market Challenges and Competitive Landscape - Experts suggest that the failure of Hema X membership stores stems from a lack of core retail values and service, particularly when compared to established competitors like Sam's Club and Costco [6] - Economic downturns and consumer fatigue have further exposed the weaknesses in Hema's membership model, highlighting issues with product differentiation and supply chain efficiency [6]

Core Insights - Hema's X membership stores in Shanghai and other locations have ceased operations, marking the end of Hema's membership store business, which was previously seen as a "second growth curve" and aimed to compete with Costco [1] Group 1: Business Strategy - Hema's parent company Alibaba is retracting its retail footprint by divesting from businesses such as Gaoxin Retail and Intime Department Store [1] - The competitive landscape for membership stores in China has intensified, leading to a noticeable slowdown in overall expansion [1] - Hema is reallocating resources towards its core business segments, including Hema Fresh and Hema Neighbor Business [1] Group 2: Store Operations - The closure of the Beijing World Flower store was announced on July 29, with operations ending on July 31, followed by similar closures in Suzhou and Nanjing on the same day [1] - Observations from the Beijing store indicated that the entrance was closed, allowing customers to enter only through the exit without membership verification, and most shelves were empty with limited discounted items available [1] - During a half-hour visit, only five customers were seen in the store, none of whom made purchases, indicating a lack of consumer interest [1]

Core Points - Hema has decided to completely shut down its membership store format, marking the end of its attempt to establish a second growth curve that aimed to compete with Costco [2][5] - The closure of all Hema X membership stores follows a series of shutdowns, with the last remaining store in Shanghai set to close by August 31 [2][3] - Hema X membership stores were launched in October 2020, with rapid expansion occurring in 2021, but ultimately only 10 stores were opened across major cities by October 2023 [3] Summary by Sections - **Business Decision**: Hema has made a strategic decision to eliminate the membership store format, which was initially seen as a potential growth avenue [5] - **Store Closures**: The last operational Hema X membership store will close on August 31, 2023, following the earlier closures of stores in Beijing, Suzhou, and Nanjing [2][4] - **Market Positioning**: Hema X was intended to target middle-class and high-end consumers, with membership fees set at 258 yuan for gold members and 658 yuan for diamond members, aiming to compete directly with Costco and Sam's Club [5]

Core Viewpoint - Hema has completely shut down all its membership stores, marking the end of its attempt to establish a membership-based business model that was intended to rival Costco [1] Group 1: Company Actions - Hema's last membership store in Shanghai will close on August 31, following the earlier closures of its stores in Beijing, Suzhou, and Nanjing on July 31 [1] - The decision to close all membership stores is part of a broader strategy by Hema's parent company, Alibaba, to streamline its retail operations by divesting from various retail assets [1] Group 2: Market Context - The competitive landscape for membership stores in China has intensified, leading to a slowdown in overall expansion within this segment [1] - Hema is reallocating resources to focus on its core businesses, including Hema Fresh and Hema Neighbor Business [1] Group 3: Store Conditions - Observations from the Beijing store indicated that the entrance was closed, allowing customers to enter only through the exit without membership verification, and most shelves were nearly empty with only a few discounted items remaining [1] - During a half-hour visit, only five customers were seen in the store, none of whom made purchases, highlighting a lack of consumer interest [1]

Core Viewpoint - Sam's Club is currently facing a public relations crisis due to discrepancies between product adjustments and consumer expectations, leading to dissatisfaction among its members [4][6]. Group 1: Product Strategy and Consumer Response - Sam's Club has introduced traditional domestic brands like Holley and Wei Long, which some consumers feel lack differentiation and harm its middle-class positioning [5]. - The removal of high-repurchase products, such as low-sugar egg yolk pastries and mango sago, has also sparked significant consumer discontent [5]. - As of now, eight Sam's stores in China have annual sales exceeding $500 million (approximately 3.67 billion RMB), with an overall sales target of over 100 billion RMB for 2024 [5]. Group 2: Membership Growth and Communication - Sam's Club has accelerated its store expansion, planning to open 6-7 new stores annually in 2024 and 8-10 stores annually by 2025 [5]. - Membership numbers have surged from nearly 2 million in 2019 to around 8.6 million by the end of 2024, with projections to exceed 9 million by mid-2025 [5]. - The core issue of the current crisis lies in Sam's Club's failure to effectively communicate product removals and new introductions to its growing member base [6][7]. Group 3: Consumer Education and Brand Perception - There is a need for Sam's Club to educate consumers about its product offerings and the rationale behind product changes, especially for new members who may not fully understand the brand's positioning [10][12]. - The perception of domestic products as inferior persists, necessitating ongoing consumer education to shift these views and highlight the quality of local goods [12][13]. - Effective communication strategies, such as those employed by Trader Joe's, could enhance consumer understanding and acceptance of new products [14][19]. Group 4: Importance of Communication - Trust is fundamental to the membership model, and Sam's Club must improve its communication to maintain this trust, especially regarding product changes [7][19]. - The company has historically been silent in the face of competitive marketing strategies, which may need to change following this incident to better engage with consumers [19].