Core Insights - Hema has decided to abandon its membership store format, with the last Hema X membership store in Shanghai set to close on August 31, 2024, following the closure of seven other membership stores this year [4][5][6] - In contrast, Sam's Club and Costco are rapidly expanding their membership store presence in China, with Sam's Club reporting a 40% increase in membership revenue in the latest quarter [4][10] - Hema's shift away from the membership model reflects a strategic focus on its fresh food and discount store formats, aiming for profitability and resource concentration [7][8] Hema's Membership Store Closure - Hema's last X membership store will cease operations, marking the end of its high-end membership store format [6] - The closure of Hema X membership stores has been ongoing, with three stores closed earlier this year and additional closures in June and July [5][6] - Hema's decision to close these stores is part of a broader strategy to focus on Hema Fresh and Hema NB formats, with plans to open nearly 100 new Hema Fresh stores in the coming fiscal year [4][7] Comparison with Competitors - Sam's Club has significantly increased its store count in China, reaching 53 locations by 2024, and has seen strong performance in membership revenue [4][9] - Costco, which opened its first store in mainland China in 2019, is also expanding its footprint, with plans to continue opening new locations [9] - Hema's membership model faced challenges due to insufficient supply chain capabilities and a lack of unique products, leading to its decision to pivot away from this format [8] Financial Performance - Walmart reported a 22.5% year-on-year increase in net sales in China, with Sam's Club contributing to this growth through strong membership performance [10] - The membership fee for Sam's Club is comparable to Hema's, with ordinary and premium memberships priced at 260 yuan and 680 yuan respectively [9] - Hema's membership fees were 258 yuan for gold members and 658 yuan for diamond members, but the value proposition did not meet consumer expectations [7][9]