Member-only chain stores attract customers with low prices and free samples. In the current economic downturn in China, American retail giants like Costco and Sam’s Club, both member-based warehouse chain stores, are gaining popularity among Chinese consumers.
These chain stores offer a shopping experience and product lineup different from traditional supermarkets and online retailers. They charge annual membership fees, and the profits are used to build their own supply chain, enabling them to provide discounted goods to their members. The competitive prices have resonated with frugal Chinese consumers, who have developed a habit of stockpiling goods during the COVID-19 pandemic.
Although membership fees are not low in China, starting at 299 yuan (about $41) for Costco and 260 yuan for Sam’s Club, the prices of the products they offer are very competitive. For example, the price of Diet Coke sold at Costco in Shenzhen is about 30% lower than local supermarkets. Some gift-wrapped chocolates are priced at about half of what local stores charge.
The low prices are highly attractive to Chinese shoppers looking to cut costs. After the lifting of COVID-19 restrictions, China’s economy did not show the expected signs of recovery but instead was burdened by various issues. The real estate crisis looms, the stock market sees waves of sell-offs, foreign capital is withdrawing, unemployment rates remain high, and Chinese people have lost confidence in the economic outlook. Many are now carefully managing their spending. Some have joined “money-saving buddies” groups on social media, where they encourage each other to reduce consumption and save money together.
According to Nikkei News, a woman from Hangzhou who frequently shops at Sam’s Club believes that her membership fee is well spent.
“I can save about 2000 yuan a year,” she said.
A 45-year-old man shopping at Costco in Shenzhen expressed his love for the free food samples offered there, which are rare in China. “Every time I come here, I enjoy tasting new things,” he said. Costco and Sam’s Club have set up dedicated tasting areas to encourage customers to try new products.
To attract shoppers, Costco and Sam’s Club are working hard to make their stores a place for consumer treasure hunting rather than just shopping.
Despite offering low-priced goods, both Costco and Sam’s Club do not compromise on product quality. The careful selection of products by both chain stores has helped them earn the trust of customers.
A 40-year-old man in Beijing said, “I no longer worry about what to buy.”
Costco entered the Chinese market in 2019. In January of this year, Costco opened a store in Longhua District, Shenzhen, making it their sixth store in China. Local media reported that on the opening day, over 140,000 people signed up for membership.
In 1996, Walmart introduced Sam’s Club to China, adapting its product lineup to local preferences. The chain has increased the number of stores in China from 26 at the end of 2019 to 47.