Core Insights - Hema X membership stores, once seen as a key growth initiative, are set to close all locations by the end of the month after less than five years of operation [1][3] Group 1: Business Performance - Hema X membership stores aimed to emulate Costco and rapidly expanded, opening ten stores across major cities like Shanghai and Beijing by October last year [3] - Despite rapid expansion, Hema X membership stores failed to establish a competitive advantage in supply chain and product selection, leading to a lack of differentiation [3] - The pricing strategy of Hema X membership stores has been criticized, with some products priced higher than those in Hema Fresh, contradicting the value proposition of membership stores [3][5] Group 2: Market Position and Strategy - Hema X membership stores have not built a substantial user base, with their contribution to overall sales remaining below 10% [5] - In contrast, Sam's Club has seen significant success in China, growing its membership from 2 million in 2019 to nearly 9 million by 2024, generating annual membership revenue of 2.3 billion yuan [5] - Following the closure of Hema X membership stores, Hema is shifting focus to expanding Hema Fresh and Hema NB formats, planning to open nearly 100 new Hema Fresh stores by 2025 and aiming for 300 Hema NB stores in three years [6] Group 3: Customer Engagement - To retain customer loyalty, Hema is collaborating with Taobao 88VIP to offer a limited-time promotion for 90 days of free X membership rights [6] - The upgraded "Cloud Enjoyment Club" will continue to offer over 800 MAX products and exclusive member prices, providing consumers with more choices and discounts [6]

Core Insights - Hema X membership stores will completely shut down by the end of August, marking their exit from the market after less than five years of operation [1][8] - The membership store model was initially seen as a potential second growth curve for Hema, aiming to compete with Costco [3][4] - Despite rapid expansion, Hema X faced challenges in differentiating its offerings and maintaining competitive pricing, leading to consumer dissatisfaction [4][6] Group 1: Business Performance - Hema X membership stores opened their first location in Shanghai in October 2020 and expanded to 10 stores across major cities by October 2023 [3] - The average SKU count for Sam's Club is around 4,000, with strict selection criteria, while Hema X struggled with product differentiation [4] - Hema X's pricing strategy faced criticism, with some products priced higher than in regular stores, contradicting the value proposition of membership [4][6] Group 2: Strategic Adjustments - Hema's overall sales contribution from X membership stores remained below 10%, prompting a strategic shift under the current CEO [6] - The company plans to open nearly 100 new Hema Fresh stores by 2025, focusing on county-level markets, and aims to establish 300 Hema NB stores within three years [6] - Hema is not abandoning its membership system; it plans to collaborate with Taobao 88VIP for promotional activities and maintain a selection of exclusive products [8]

Core Viewpoint - Hema has decided to completely shut down its membership store business, which was previously seen as a "second growth curve" for the company, following the closure of its membership stores in Beijing and Suzhou [1] Group 1: Store Closures - Hema X membership store in Shanghai will cease operations on August 31, following the closure of its Beijing and Suzhou locations on July 31 [1] - After August 31, all Hema membership stores will be closed, marking the end of this business segment [1] Group 2: Strategic Shift - Hema has stated that the closure of the membership stores is a proactive adjustment, with a focus shifting towards Hema Fresh and Hema NB formats [1] - The company plans to continue expanding Hema Fresh stores, with nearly 100 new locations expected to open in the new fiscal year [1] Group 3: Background Information - Hema X membership store is a membership-based retail format launched by Hema, which was the first Chinese brand in the warehouse-style membership sector, competing with Costco and Sam's Club [1] - The first Hema X store opened in October 2020 in Shanghai [1]