Crowds force Costco to shut maiden China store early on opening day

[Hamartia Antidote]

Seriously, your "knowledge" about China, probably from some asylum seekers decades ago, is in urgent need for an update. You think 199/299 RMB is still a big money nowadays in China? You may think you are insulting Chinese, but it just shows you are old and out.

Well I was chatting about Costco opening in China with some Chinese co-workers at lunch and THEY were the ones who suggested this would happen. So go figure. BTW an Executive membership at Costco is $120 in the US. Not sure if it is offered in China (or practical).

Their logic:
China has (or according to you...had) some of the smartest shoppers on the planet. If they can save a membership fee by sharing memberships amongst the extended family (and even neighbors/colleagues) that’s more money in the bank for them all (which is irrelevant of their income). If there is something that needs to be bought in a huge multipack and is a great price they’ll simply distribute what they can’t use. That’s why the Chinese have a history of being awesome savers...by not being STUPID with their money. Sharing memberships is actually a SMART strategy. The question is how many memberships does Costco need to stay in business.


But after reading the article below Costco may not have a problem with membership numbers. 2 Million members * $membership fee = Sam’s Club profit.

That sounds like Sam's Club, a similar set up which I had membership in their China Shenzhen outlet about 15 years ago. They were doing whole sale and single item sales to members at low prices (wholesale prices?), and was larger than Walmart Shenzhen in floor area.

https://www.pymnts.com/news/retail/2017/sams-club-china-bulk-buy-consumer-habits/
Why Moms Are The Secret To Sam’s Club’s Success In China

While many foreign firms complain that China is a hard market in which to do business, Walmart-operated Sam’s Club has managed to make some major inroads.

The bulk buy retailer has struggled head-to-head in its home country against Costco, but in China, it’s a very different story. Three of the top-performing Sam’s Clubs on Earth are located there, as the brand attracts a certain type of shopper with extreme regularity.

Choosy moms.

Sam’s Club in China is a hub for important goods and high-quality food products — not a hub for bulk-purchasing or discount-seeking. And it helps that there is no Costco.

“The quality here is guaranteed,” 47-year-old Yu Yufang told The Wall Street Journal as she shopped at the No. 1 Shenzhen store. “A lot of Chinese products, I feel, aren’t trustworthy.”

Zhou Rong, an affluent 39-year-old mother noted that Sam’s carries imported products Chinese stores don’t stock.

Sam’s now has nearly 2 million members in China, about half of whom have joined in the last five years, as the brand has added more locations and pitched more directly to well-off mothers.

“That target core member is a mom around 35 to 40 years old,” said Andrew Miles, president of Sam’s Club China. “She wants better quality products. She’s concerned about food safety and quality. She’s willing to pay for premium products, but she wants value.”

But the retailer has challenges ahead. Its main U.S. rival Costco is eyeing a mainland China expansion after operating in Taiwan for almost 20 years.

“We continue to explore the market” in China, Costco Chief Financial Officer Richard Galanti said.

Alibaba is adding more imported goods to its online marketplaces and also making bets on brick-and-mortar retail.

But Sam’s Club likes its current standing in China and aims to keep it by putting its “foot on the gas” and doubling its physical locations to 40 by 2020. The company is also selling products through Alibaba rival JD.com.

 

[Zsari]

You need to understand the intentions. Tweet has word limit and hence has to be made concise. But reality is that USA wants manufacturing to be out of China while it wants China to buy goods and services from USA based companies.

It is a different issue if China will allow USA companies to function in China if USA doesn't allow Chinese to manufacture

It's actually the same issue as manufacturers are in China not only for the lower cost but also access to the Chinese domestic market.

 

[Dungeness]

Well I was chatting about Costco opening in China with some Chinese co-workers at lunch and THEY were the ones who suggested this would happen. So go figure. BTW an Executive membership at Costco is $120 in the US. Not sure if it is offered in China (or practical).

Their logic:
China has (or according to you...had) some of the smartest shoppers on the planet. If they can save a membership fee by sharing memberships amongst the extended family (and even neighbors/colleagues) that’s more money in the bank for them all (which is irrelevant of their income). If there is something that needs to be bought in a huge multipack and is a great price they’ll simply distribute what they can’t use. That’s why the Chinese have a history of being awesome savers...by not being STUPID with their money. Sharing memberships is actually a SMART strategy. The question is how many memberships does Costco need to stay in business.


But after reading the article below Costco may not have a problem with membership numbers. 2 Million members * $membership fee = Sam’s Club profit.

Sharing Costco membership cards with others may happen in any countries, and that's why even in the US, Costco membership cards are "photo ID'ed". But if someone told you it would happen in China more often than in any other countries, he either hasn't been back to China for a very long time, or he is carrying the mentality of his original social segment that Costco is not targeting anyway.

At the grand opening of its first store in China, Costco has already signed up more than 100K members. For those Chinese who would buy large package/quantity, 299RMB annual membership is really nothing worth sharing.

Anyway, Chinese are spoiled with same day or next day Free Delivery, so I don't think Costco would keep in the headline news for long. Homedepot had its heydays in China too.

 

[hiseen]

I order you to leave China.

 

[313ghazi]

Imagine the disappointment when they got inside and found about 50% of the stuff is actually at retail rates. At least that's what it's like in the UK, especially after you work out VAT.

 

[Hamartia Antidote]

Pre-open VIP Party gives a better look

 

[Hamartia Antidote]

Seriously, your "knowledge" about China, probably from some asylum seekers decades ago, is in urgent need for an update. You think 199/299 RMB is still a big money nowadays in China? You may think you are insulting Chinese, but it just shows you are old and out.

My “old and thrifty” Chinese friends say you should read Chinese websites on the latest news about Costco membership counts. They knew this would happen. They think you must be a young ABC who is out of touch with the Chinese mindset.

 

[AViet]

Usually opening day you get a lot of freebies. Just wait a few days and nobody will go.

The same in Vietnam. They hire people for queuing, even fighting to get a place, in a few days to make noise on media. After that, nothing is ever heard about them. Like H&M store which once made a thread on PDF when they opened their first store in VN some months ago. Same about Starbucks some years ago.

 

[Dungeness]

My “old and thrifty” Chinese friends say you should read Chinese websites on the latest news about Costco membership counts. They knew this would happen. They think you must be a young ABC who is out of touch with the Chinese mindset.

hahaha, can't find anything funnier to make my day!

I know many Chinese are done with Costco, so they are getting their refund for their memberships. That's why I told you Costco may not have the future that the phenomenon of its grand opening might have indicated, falsely.

Here is a different American perspective for you that you will never see on MSM, if you are genuinely interested in China matter and you are still capable of learning with an open mind:

 

[Hamartia Antidote]

hahaha, can't find anything funnier to make my day!

I know many Chinese are done with Costco, so they are getting their refund for their memberships. That's why I told you Costco may not have the future that the phenomenon of its grand opening might have indicated, falsely.

Here is a different American perspective for you that you will never see on MSM, if you are genuinely interested in China matter and you are still capable of learning with an open mind:

LOL! Backtracking eh? YOU were the one saying 199RMB is nothing and my "asylum seeker" friends are out of touch with modern reality if they think people wouldn't pay it. Plus you mentioned 100,000 signed up the first day.

You looked at the membership fee from an affordability standpoint while they looked at it from a thrift viewpoint. That’s where they say you failed.

If Costco makes its profit through membership fees they are going to have a problem maintaining a high membership count not because of affordability issues but because of thrift issues.

 

[Mista]

I hope Costco would open a store in Xi'an, preferably near my university, so that I don't have to walk several kilometers to Walmart every time I shop.

Curious, why would you walk several kilometers to Walmart to shop? Isn't there Taobao or other shops?

I order you to leave China.

 

[rott]

Seriously, your "knowledge" about China, probably from some asylum seekers decades ago, is in urgent need for an update. You think 199/299 RMB is still a big money nowadays in China? You may think you are insulting Chinese, but it just shows you are old and out.

And you should be thankful to China for $200 70" TV.

He has no clue whatsoever about China. He's just going on by Google search I think or whatever he can gather up from the internet searches.

 

[Dungeness]

LOL! Backtracking eh? YOU were the one saying 199RMB is nothing and my "asylum seeker" friends are out of touch with modern reality if they think people wouldn't pay it. Plus you mentioned 100,000 signed up the first day.

You looked at the membership fee from an affordability standpoint while they looked at it from a thrift viewpoint. That’s where they say you failed.

If Costco makes its profit through membership fees they are going to have a problem maintaining a high membership count not because of affordability issues but because of thrift issues.

You are the one who is trying to move the goal pole, pal!

199/299RMB annual fee is peanuts if they they think the service is worth it, and they will get money back if they think it is not. They will not share a single membership card "among 100 reletives or friends" as you claimed. Here is what I said:

At the grand opening of its first store in China, Costco has already signed up more than 100K members. For those Chinese who would buy large package/quantity, 299RMB annual membership is really nothing worth sharing.

By the way, there are "free drink refills" in Shanghai Costco. "Costco西式餐饮部类似于宜家，提供热狗、披萨、牛肉卷、汤品、冰淇淋、拿铁、无限续杯的饮料等产品，很多消费者逛累了可以在此解决中饭或者晚饭"

No free drink refills at their food court that’s for sure!!

Why you have such a crooked mind about China and Chinese? Well, considering you "haven't been able" to go to China for the last 10-20 years and you don't read Chinese, you are certianly getting information about China nothing more than secondhanded one. It's fine, but just don't assume you know so much about China.

 

[Hamartia Antidote]

You are the one who is trying to move the goal pole, pal!

199/299RMB annual fee is peanuts if they they think the service is worth it, and they will get money back if they think it is not. They will not share a single membership card "among 100 reletives or friends" as you claimed. Here is what I said:



By the way, there are "free drink refills" in Shanghai Costco. "Costco西式餐饮部类似于宜家，提供热狗、披萨、牛肉卷、汤品、冰淇淋、拿铁、无限续杯的饮料等产品，很多消费者逛累了可以在此解决中饭或者晚饭"



Why you have such a crooked mind about China and Chinese? Well, considering you "haven't been able" to go to China for the last 10-20 years and you don't read Chinese, you are certianly getting information about China nothing more than secondhanded one. It's fine, but just don't assume you know so much about China.

Would you stop the defensive “you are against China” [anger..anger..anger] stuff. My original post was a simple observation relayed to me by my Chinese colleagues as to why Costco’s membership business model may not work well in China. That’s not to say it won’t work at all. It just won’t work as expected.

Immediately you focused on the actual cost of the membership striking out at me for thinking Chinese are too poor to pay it. I had to explain to you that the actual monetary amount was not the issue. It was how Chinese are ultra smart thrifty shoppers and they aren’t going to part with their money unless they have to (that doesn’t mean they are cheap or poor). It doesn’t matter if the membership is 199Rmb or 10. Why do you keep focusing on it?

I’m not going to take this thread downhill any further. My colleagues pointed out the membership counts took a hit and they believe their original assessment was correct.

 

[S10]

Anybody with Costco membership here? Is it really worth it?