US-headquartered warehouse-club retailer Costco Wholesale will open its first physical store in Mainland China in August.
Costco China’s first location will be in Shanghai’s Minhang district, offering memberships to family and corporate consumers at RMB299 (US$43). The firm’s membership strategy has been largely successful in most markets, with an 88-per-cent renewal rate globally.
“Costco is good at building a loyal shopper base through its paid membership program with low prices and a select number of stock-keeping units,” said Kantar Worldpanel China GM Jason Yu on Costco China’s debut. “The question is whether they can replicate this in China easily.”
The group will prove strong competition for Walmart China’s Sam’s Club, a premium goods retailer targeting high-end buyers and which has been accelerating store expansion for the past two years, with a target of reaching 40 locations in the territory by next year.
Costco now has 773 warehouses worldwide and operates e-commerce sites in several international markets.
Costco has also announced plans to launch in New Zealand, with the first store scheduled to open in 2021.