Costco Opening First China Store in Shanghai

By Bridget O'Donnell, October 3, 2017

American retailer Costco, famous for its exclusive "members only" model, will open its first China warehouse in Shanghai.

While no date has yet been announced for the grand opening of the wholesaler's first brick-and-mortar shop, the brand already launched its flagship Tmall store in September.

The Shanghai store will also follow the brand's unique members only model. Unlike most stores, which profit from the products they sell, Costco earns most of its revenue from membership fees.

While Costco is the top wholesale retailer in the US, it will face stiff competition from Walmart-owned Sam's Club in China, which as of 2016 has already opened 13 branches around the country since it debuted in Shenzhen in 1996, as well as an online-only flagship store on JD.com. Membership fees are RMB150 per year.

A Sam's Club in Guangzhou

Since 2008, Sam's Club's main Shenzhen branch has been the brand's most popular out of 800-some outlets around the globe, and four of the top ten are based in China. It currently has no rivals for the "pay first, shop later" concept in China.

Last year Sam's Club also announced it was planning to add seven more stores by the end of 2017. The strategy of stocking up its China stores with foreign imports from household appliances to food (including China's first shipment of US beef) has earned Sam's Club plenty of affluent customers, which in turn has helped it become Walmart's biggest success in the Middle Kingdom.

Costco already has already hit the ground running in building up publicity for the brand. Along with the Tmall shop, a giant teddy bear stunt that went viral last month was widely rumored to be part of a marketing campaign for Costco.

Was it all just a giant publicity stunt for Costo?

During the stunt, a rich college student tried to impress his crush with a massive eight-foot-tall teddy bear, but was rejected. News reports for this particular story also just happened to note that giant stuffed animal came from Costco and was one of three left on the Chinese mainland.

[Images via Flickr, China Daily]