China’s selective shoppers embrace members-only retailers like Walmart’s Sam’s Club

While traditional brick-and-mortar supermarkets struggle amid the rise of e-commerce, Linda Wang from Shanghai still visits Sam’s Club, a membership-only bulk retailer owned by Walmart, the world’s largest retailer.

“Their selection feels more curated,” said Wang, a corporate executive who spends an average of more than 1,000 yuan (US$140) each time she shops for her family of four.

“Unlike traditional supermarkets, where there are just too many options, and you end up feeling overwhelmed by the choices, when you shop at Sam’s Club, you start developing this habit of trusting that they’ve already done the selection for you.

“They have their own brands, the ones with the Sam’s Club label. And you just trust that their private-label products are definitely of good quality and reasonably priced.”

As China’s retail landscape continues to evolve, membership-only bulk retailers such as Sam’s Club have emerged as key players catering to a growing middle class that values quality and exclusivity.

And locations on the mainland also appeal to Hong Kong residents looking for quality goods at bargain prices.

Other members-only retailers such as Costco and Alibaba’s grocery brand Hema Fresh, have also been burgeoning in China’s big cities in recent years. Alibaba owns the South China Morning Post.

Sam’s Club has carved out a niche role by offering a curated selection of goods, appealing to consumers willing to pay a premium for convenience and trusted brands.

This strategy helped fuel Walmart China’s 17.7 per cent sales growth in the second quarter of the current fiscal year, outpacing the global average of 4.8 per cent, according to its second-quarter earnings report released last week.

The company also revealed that Walmart China’s quarterly net sales reached US$4.6 billion, or about 33 billion yuan, and said this was fuelled by the rapid growth of Sam’s Club and its e-commerce business, with Sam’s Club seeing increased foot traffic, a record number of members, and a 23 per cent year-over-year rise in membership income.

Middle-class consumers desire quality goods that are rarely found in traditional grocery stores, including imported meat and produce, and they are willing to pay a membership fee at bulk retail stores such as Sam’s Club and Costco for an upmarket shopping experience.

03:39

Shop occupancy recovers in Hong Kong, but vacant stores still visible across the city

Shop occupancy recovers in Hong Kong, but vacant stores still visible across the city

Sam’s Club has nearly 50 stores in China, with plans to open six to seven new ones a year.

Beyond mainland China, Sam’s Club has also become a destination for shoppers from Hong Kong, drawn by the promise of relatively low prices and good quality, especially at stores in the Greater Bay Area.

Thanks to the scheme that allows private cars from Hong Kong to travel between Hong Kong and Guangdong via the Hong Kong-Zhuhai-Macau Bridge, Hong Kong shoppers can spend more freely at Sam’s Club locations in the Greater Bay Area.

William Au, 53, is among the Hong Kong residents who have frequented Sam’s Club in Shenzhen and Zhuhai over the past year.

“Every time we go to Zhuhai, we shop at Sam’s Club and we notice that almost half of the cars parked there have Hong Kong plates,” said Au, a Hong Kong university lecturer, adding that his family spends about 800 to 1,000 yuan on each visit to Sam’s Club, largely on groceries, as prices tend to be lower than in Hong Kong.