Core Viewpoint - The company Oriental Selection has shown significant stock price recovery and operational improvement after the departure of its key figure, Dong Yuhui, with a focus on becoming a sustainable e-commerce platform akin to Sam's Club [2][6][12]. Group 1: Stock Performance - Oriental Selection's stock price has increased by approximately 248% since July, and by 357% from the low point of 8.92 HKD per share when Dong Yuhui left [2][4]. - As of August 15, the stock price rose by 17.9%, bringing the total market capitalization to over 43 billion HKD [2]. Group 2: Financial Performance - For the fourth quarter of the 2025 fiscal year, revenue is projected to be around 150 million USD, reflecting a year-on-year decline of about 30%, but with a narrowing decline compared to previous quarters [4]. - The company reported a net loss of 96.5 million RMB for the first half of the 2025 fiscal year, primarily due to the separation from "Hui Tongxing," but if this impact is excluded, the net profit would be 32.7 million RMB [5]. Group 3: Business Strategy and Development - Oriental Selection aims to transform into a membership-based e-commerce platform, similar to Sam's Club, having launched a paid membership service in October 2023 [12][13]. - The number of paid subscribers reached 228,000, nearly doubling year-on-year, indicating a strong potential for customer retention and revenue growth [13]. - The company has been increasing its self-operated product offerings, with self-operated products accounting for 46% of total sales in 2024, and the gross margin for these products rising from 10% to 21% [13][14]. Group 4: Market Position and Future Outlook - The company is focusing on developing "explosive" products, such as a self-operated sanitary napkin that sold 180,000 units in two days, indicating a positive trend in product development [14]. - Despite the optimistic outlook, challenges remain in scaling membership numbers, enhancing product explosiveness, and expanding sales channels beyond live streaming [14].

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 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 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].

Group 1 - The core controversy revolves around the perceived "downgrade" in product selection and the diminishing value of membership at Sam's Club, leading to consumer dissatisfaction [1][2] - Members are questioning the uniqueness of the offerings as Sam's Club shifts from exclusive products to more common brands, undermining the value proposition of the membership fee [1][2] - The introduction of lower-quality products and the removal of high-repurchase items have raised concerns about product quality and brand integrity [1][4] Group 2 - The adjustment in product selection is attributed to a shift in business strategy and management changes, with a focus on short-term profits over long-term brand loyalty [5][6] - There is pressure on suppliers to reduce costs, which has led to concerns about product quality and safety standards [4][5] - The management team change in January 2025 is seen as a pivotal moment, with new leadership prioritizing high-margin, mass-market products over previously popular items [5][7] Group 3 - The trust crisis in the membership model is evident as Sam's Club deviates from its "strict selection" promise, leading to a dilution of its brand identity [8][9] - Competitors like Hema and Costco are capturing market share by focusing on fresh and exclusive products, while Sam's Club is perceived to be losing its unique positioning [9] - There is a noticeable increase in customer inquiries about membership cancellations, indicating a potential trend of members reconsidering their loyalty [9][10] Group 4 - The fundamental issue lies in the erosion of the "paid trust" system, where membership fees no longer guarantee product scarcity and quality assurance, threatening the company's competitive edge [11]

Core Viewpoint - The recent introduction of low-quality products, such as the low-sugar Haoliyou cake, at Sam's Club has led to significant dissatisfaction among its members, who expect high-quality, unique offerings in exchange for their membership fees [1][3][4]. Group 1: Member Expectations and Reactions - Sam's Club members feel betrayed by the introduction of common products like Haoliyou, which they can easily find in regular supermarkets, undermining the perceived value of their membership [1][3]. - Many members have expressed their frustration online, with some even writing to the headquarters to complain about the declining quality of product selections [1][3]. - The expectation among members is for "scarcity privileges," meaning they desire products that are not available in regular stores, which is not being met with the current offerings [3][4]. Group 2: Strategic Shifts and Market Positioning - The decision to introduce more mainstream products is seen as a shift in Sam's Club's strategy, possibly influenced by changes in management and a focus on cost-cutting to increase profitability [4][5][8]. - Analysts suggest that this shift may be an attempt to capture the lower-tier market, where consumers prefer more affordable and familiar products, such as snacks and sweets [4][5]. - The management changes, including the appointment of new executives, indicate a potential shift in the company's operational focus and strategy [7][8]. Group 3: Future Challenges and Considerations - Sam's Club faces critical questions regarding its market strategy: whether to focus on expanding its core middle-class customer base or to cater to the lower-tier market [8][10]. - There is a pressing need for Sam's Club to restore its "Sam's Standard" of quality to regain member trust and loyalty [8][10]. - Suggestions have been made for Sam's Club to explore additional services, such as healthcare and travel, to enhance member value beyond just product offerings [9][10].