Core Insights - Costco has successfully established itself in the Chinese market over the past six years, leveraging its unique membership model and high-quality product offerings to enhance consumer shopping experiences [1][12] - The company has expanded its store presence to seven locations across six cities in mainland China, demonstrating a strong growth trajectory since its first store opening in Shanghai [4][12] Expansion Strategy - The first Costco store in mainland China opened in Shanghai on August 27, 2019, with a shopping area of nearly 14,000 square meters and over 1,000 parking spaces, attracting significant customer traffic [2] - Following the successful launch, Costco opened its first store in Shenzhen in January 2024, achieving a remarkable membership registration of 140,000 prior to the opening [2][4] Operational Excellence - Costco's expansion in China is supported by precise site selection and refined operational strategies, resulting in a solid foundation for growth [4] - The company has introduced unique services, such as the first Costco member-only gas station in Nanjing, which offers self-service fueling at discounted prices [4] Global Sourcing and Pricing Strategy - Costco employs a global sourcing strategy that ensures popular international products are available in China, while also providing opportunities for local products to reach global markets [5] - The company maintains a strict gross margin cap of 14% on all products, ensuring competitive pricing through a robust global procurement system and partnerships with leading manufacturers [5] Enhanced Member Services - In response to the growing demand for efficient online shopping, Costco launched a home delivery service in 2024, offering same-day delivery within 90 minutes in select cities [6] - The online platform features a wide range of products, including food, personal care, electronics, and large appliances, allowing members to enjoy a seamless shopping experience [6] Private Label Strategy - Costco has maintained a high standard for supplier management, offering around 4,000 carefully selected global products while adapting its offerings to local consumer preferences [7] - The company has localized some of its private label products, such as Kirkland Signature, to reduce costs while ensuring quality comparable to mainstream brands [7] Commitment to Sustainability - Costco emphasizes sustainable practices, such as reducing plastic use in packaging and offering products certified by international organizations for environmental responsibility [10] - The company’s products, including Kirkland kitchen paper and seafood, adhere to sustainability certifications, ensuring traceability and environmental stewardship [10][12] Future Outlook - China is a key market for Costco, and the company aims to continue expanding its store footprint while enhancing member value through a combination of global procurement and local innovation [12] - The company plans to deepen its market trust through a sustainable product strategy and an integrated online-offline shopping experience [12]

Core Viewpoint - Hema's membership store business, which started with high expectations in 2020, is set to close all locations by 2025, marking a rapid decline in less than five years [4][6]. Group 1: Hema's Membership Store Journey - Hema's membership store business launched during a "membership craze" in China's retail market, following the successful opening of Costco's first store in Shanghai in 2019 [8][9]. - Hema's first membership store achieved profitability within two months, with a peak daily revenue exceeding 10 million yuan and an annual sales figure nearing 1 billion yuan [12]. - Despite initial success and rapid expansion, by 2023, many stores were underperforming, with some losing over 10 million yuan annually, leading to a strategic retreat and closure of multiple locations [17][20]. Group 2: Strategic Shift and Market Focus - In March 2024, Hema's new CEO shifted the focus from membership stores to expanding "Hema Fresh" and "Hema NB," targeting lower-tier cities [21][23]. - Hema plans to open nearly 100 new "Hema Fresh" stores in 2025, emphasizing growth in third and fourth-tier cities, with a significant increase in customer numbers and profitability reported [23][24]. - Hema NB has rapidly expanded, surpassing 300 stores and achieving annual sales exceeding 10 billion yuan, with plans to reach 1,000 stores [26]. Group 3: Industry Landscape and Competitors - As Hema exits the membership store market, competitors like Sam's Club are thriving, with sales projected to exceed 100 billion yuan in 2024 and a significant increase in membership revenue [28][30]. - Costco faces challenges in China, with a low membership renewal rate of 62%, while local players struggle with supply chain and product selection issues [30][31]. - The varying success of membership-based supermarkets highlights the importance of adapting retail models to local market conditions [30].

Core Insights - The core issue revolves around the shift in Sam's Club's product selection strategy and the changing consumer mindset, leading to dissatisfaction among its members [1][5][14] Group 1: Changes in Product Strategy - In 2025, Sam's Club accelerated its localization strategy, with 70% of products sourced from domestic suppliers, reducing the import ratio from 30% to 18%, which resulted in a decline in product quality [3][4] - The introduction of popular but controversial brands like Haoliyou and Weilong has conflicted with Sam's Club's previously established "strict selection" image, leading to consumer complaints [1][4] - Complaints on the Black Cat Complaint platform surged by 65% in 2025, highlighting issues such as spoiled milk and moldy fruits, indicating a significant decline in quality control [1][3] Group 2: Consumer Sentiment and Market Dynamics - Sam's Club's membership base in lower-tier cities has reached 45%, prompting a shift towards more price-sensitive products to capture this demographic [5][10] - The perception of Sam's Club as a high-quality provider is being challenged as consumers now prioritize both quality and lower prices, complicating the company's ability to balance these demands [17][24] - The decline in the willingness of core middle-class members to renew their memberships, with a reported 18% drop in average spending per new member, reflects a broader trend of changing consumer expectations [9][18] Group 3: Strategic Implications - The management's shift from an "expansion-driven" to an "efficiency-driven" approach under new leadership has led to a focus on short-term financial metrics, which has negatively impacted product quality [7][8] - The challenge for Sam's Club lies in navigating the delicate balance between appealing to price-sensitive consumers while maintaining its reputation for quality, as failure to do so could lead to a decline in membership and sales [28][30] - The evolving family structure in China, moving towards smaller households, necessitates a reevaluation of Sam's Club's bulk product offerings, which may not align with the needs of modern consumers [19][22]

Core Viewpoint - The recent changes in product selection at Sam's Club have raised concerns among consumers about the perceived decline in the quality and uniqueness of offerings, shifting from "global premium goods" to more common supermarket brands [3][4][10]. Group 1: Product Selection Changes - Sam's Club has removed several popular items, including Haldirams and Wei Long products, from its shelves, leading to consumer dissatisfaction and inquiries about the rationale behind this shift [3][4]. - The removal of these items has sparked discussions on social media, with many consumers questioning the value of their membership fees due to the perceived decline in product quality [3][4]. - Despite the removal of certain products, other items from traditional domestic brands remain available, indicating a potential shift in product strategy [5][6]. Group 2: Strategic Implications - The change in product selection may be linked to a recent management shift within Sam's Club China, with new leadership potentially influencing the direction of product offerings [12][13]. - The company has been expanding rapidly, opening 6-7 new stores annually, which may necessitate a broader range of products to cater to a more diverse membership base [14]. - The competitive landscape in the retail sector is evolving, with many traditional supermarkets looking to Sam's Club for lessons in quality retailing and membership models [14][15]. Group 3: Market Positioning - Sam's Club's unique selling proposition relies on a strong supply chain and stringent product selection standards, which are crucial for maintaining its competitive edge in the membership retail market [14]. - The company has historically emphasized differentiation in its product offerings, avoiding common items found in other stores to maintain its premium positioning [10][11]. - As consumer preferences evolve, the company may need to adapt its product development strategy to include both premium and popular domestic brands to meet diverse consumer demands [11][12].

Core Viewpoint - The article discusses the recent backlash against Sam's Club for removing popular products like low-sugar snacks and replacing them with items that consumers find less appealing, leading to dissatisfaction among members [1][3][9]. Product Changes - Sam's Club has recently made significant adjustments to its product offerings, including the removal of high-repurchase-rate items such as sun cakes and low-sugar egg yolk pastries, while introducing new products like low-sugar snacks and oatmeal cakes [1][9]. - Specific products that have been removed include the low-sugar Holi-Ryo pie and the cow mushroom konjac, which were previously popular among consumers [5][10]. Consumer Reactions - Many consumers expressed frustration on social media, feeling that Sam's Club is not providing value for their membership fees by offering products easily available elsewhere [3][9]. - The high approval rating of the removed Holi-Ryo pie, which had a 93.6% positive feedback rate, highlights the disconnect between consumer preferences and the company's product strategy [9]. Company Response - Walmart, the parent company of Sam's Club, acknowledged the feedback from members regarding product selection and stated that it would consider this input in future product strategies [11][12]. - Sam's Club has also indicated that it is aware of the recent public sentiment and plans to hold high-level meetings to discuss potential responses to the backlash [15]. Product Customization - Some brands, such as Holi-Ryo and Lulumei, have confirmed that their products are specially customized for Sam's Club, tailored to meet the preferences of its membership base [14][16]. - The introduction of these customized products is part of a strategy to differentiate offerings and cater to health-conscious consumers [14].

Core Viewpoint - The closure of Hema X membership stores in Beijing indicates a strategic shift for Hema, moving away from the membership supermarket model, while Sam's Club continues to expand aggressively in the same market segment [3][13][19]. Summary by Sections Hema X Membership Store Closure - Hema X membership stores will cease operations in Beijing by July 31, 2025, following a series of closures in other cities [3][4]. - The membership fee structure for Hema X included tiers such as Gold (258 RMB/year) and Diamond (658 RMB/year), similar to Sam's Club's pricing [4][5]. - Hema X had approximately 3 million paid members by the end of 2022, compared to Sam's Club's 4 million members in China [5][6]. Signs of Decline - The decline of Hema X stores was foreshadowed by reduced customer engagement and product availability, with reports of closed sections and diminished product quality [8][10][11]. - Customers noted a significant drop in the perceived value and quality of products, leading to decreased foot traffic and loyalty [11][12]. Strategic Shift and Market Dynamics - Hema's strategic pivot is evident as it focuses on its core businesses, Hema Fresh and Hema Neighborhood, while discontinuing the Hema X model [18][19]. - In contrast, Sam's Club is expanding its footprint, with plans to open 8-10 new stores annually starting in 2025, indicating a robust growth strategy [22][23]. Membership and Product Structure Comparison - Hema's membership system created confusion among consumers due to overlapping benefits with Hema Fresh, leading to a decline in Hema X store visits [26][27]. - Sam's Club maintains a stable membership structure, while Hema's recent discount strategies have undermined the value proposition for its members [28][30]. Supply Chain and Product Quality Issues - Hema's shift towards lower pricing has affected product quality and supplier relationships, resulting in a reduction of SKUs and a decline in premium offerings [31][32]. - In contrast, Sam's Club emphasizes quality control and supplier relationships, ensuring a consistent product offering that appeals to consumers [33][34].

Core Viewpoint - Hema X membership stores in Beijing will cease operations by July 31, 2025, indicating a strategic retreat from the membership-based supermarket model, while Sam's Club continues to expand aggressively in the same market [1][7][9]. Group 1: Store Operations and Membership Model - Hema X membership stores, similar to Sam's Club, required a membership fee for entry, with initial fees set at 218 yuan per year, later adjusted to 258 yuan for gold members and 658 yuan for diamond members [1][2]. - As of the end of 2022, Hema X had nearly 3 million paid members, while Sam's Club had around 4 million, showing a competitive landscape [2]. - The closure of the last Hema X store in Beijing follows a trend of declining membership and customer engagement, with reports of reduced product offerings and customer visits [3][5][6]. Group 2: Market Dynamics and Competitive Landscape - Hema's retreat from the membership model contrasts sharply with Sam's Club's expansion, which plans to open 8-10 new stores annually starting in 2025, significantly increasing its market presence [11][12]. - Hema's strategic shift is attributed to a broader focus on its core businesses, leading to the closure of multiple Hema X locations and a pivot towards profitability in its remaining operations [9][12]. - The differences in membership service structures and product offerings between Hema and Sam's Club have contributed to Hema's struggles, with Hema's membership benefits perceived as less valuable compared to Sam's [12][14]. Group 3: Product Quality and Supply Chain Issues - Hema X has faced criticism regarding product quality and value, with customers noting a decline in the quality of fresh produce and an increase in prices, leading to a loss of competitive edge [5][6][16]. - The shift in Hema's pricing strategy has resulted in the removal of many SKUs and a focus on lower-cost suppliers, which has negatively impacted product quality and supplier relationships [16][17]. - In contrast, Sam's Club maintains a strong emphasis on quality control and supplier relationships, which has helped it retain customer loyalty and market share [16][17].

Core Viewpoint - Sam's Club has faced significant backlash due to food safety issues, particularly involving the discovery of worms in nut products, which has led to widespread consumer concern and negative publicity [2][3][16]. Group 1: Incident Overview - A consumer reported finding a worm in a nut product purchased from Sam's Club, which has been confirmed by the company's customer service as not an isolated incident [4][16]. - The consumer expressed disgust and stated that she would no longer purchase any food items from Sam's Club after this experience [6][9]. - Sam's Club's response to the incident involved multiple compensation offers, including refunds and additional compensation, but the consumer was dissatisfied with the resolution [8][9]. Group 2: Company Performance and Growth - Walmart reported strong growth in its first quarter, with net sales in China reaching $6.7 billion, a 22.5% year-over-year increase, driven by Sam's Club and e-commerce [17]. - Membership revenue for Sam's Club in China grew over 40%, with membership numbers continuing to rise [17]. - Sam's Club's revenue in China is projected to exceed 100 billion RMB in 2024, indicating robust business performance despite recent controversies [17]. Group 3: Quality Control Issues - There have been multiple reports of quality issues at Sam's Club, including a case where a consumer found a glass-like object in a meat product [22]. - The company has been criticized for its inability to ensure food safety, which has led to a decline in consumer trust [9][21]. - The emergence of "scalpers" offering services to bypass membership requirements at Sam's Club highlights potential operational challenges and consumer dissatisfaction [25][26].