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 - Hema's decision to exit the membership store business reflects a broader trend in the Chinese retail market, indicating a shift away from the membership supermarket model that gained popularity in recent years [1][3][4] Group 1: Hema's Membership Store Closure - Hema will close all its offline X membership stores by the end of August this year, marking its exit from the membership store sector [1] - The X membership store model, initiated by Hema in 2020, required consumers to hold a membership card to shop, with annual fees of 258 yuan and 658 yuan [1] Group 2: Market Trends and Competitor Actions - The membership supermarket model gained traction in China after Costco's successful opening in Shanghai in 2020, prompting various retailers like Hema, Yonghui, Carrefour, and Metro to enter the market [3] - However, five years later, membership stores are fading from the business strategies of these retailers [3][4] - Yonghui and Metro have not mentioned warehouse membership stores in their recent annual reports, while Carrefour's first membership store in China closed in 2023 [4] Group 3: Challenges Facing Membership Supermarkets - Successful membership supermarkets rely on strong supply chain networks, precise product positioning, operational excellence, and brand trust [4] - Costco and Sam's Club have built unique product procurement pools through global supply chains and have tailored products based on member preferences [4] - Hema's X membership store faced issues such as product quality control fluctuations and membership rights management problems, contributing to its decline [4] Group 4: Broader Implications for the Retail Industry - The exit of Hema from the membership store model signifies a rational return in the retail industry, as the initial enthusiasm wanes [5] - The essence of membership supermarkets is not merely a replication of business models but a deep integration of supply chain, product strength, operational capability, and brand trust [5] - Retailers are encouraged to reassess their strengths and seek more suitable development directions rather than forcing entry into mismatched business areas [5]

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]