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China: Discount warehouse opens

Updated: Apr 13, 2021

Large scale Discount Retail Chain Hema's first X Member opens in Shanghai. This is the first project of Alibaba's paid membership business format. The discount store is located on the B1 floor of Shanghai Pudong Senlan Commercial Center, covering an area of ​​18,000 square meters. The store uses storage shelves and integrates online and offline operations.

This is a new warehouse discount retail format of Hema's membership system integrating online and offline operations. It is also a major upgrade of Hema's paid membership rights. It relies on Alibaba's intelligent technology platform and Hema's excellent buyer capabilities, global direct sourcing capabilities, and refined operations and supply chain capabilities to provide consumers with cost-effective product experience.

In June this year, Hou Yi, the president of Hema, revealed that the company would open its first X Membership store in Shanghai. X Membership is a paid membership system centred around product rights launched by Hema in 2018 and was expanded from Shanghai to Beijing, Shenzhen, and Xi'an the following year.

At present, there are two major brands of membership-based large warehouse discount retail chain stores in China: Sam's Club (owned by Walmart), which entered China in 1996, and US listed Discounter Costco, which opened its first store in Shanghai in 2019. Hema X Membership will become the third warehouse-style membership store brand and the first Chinese brand.

On August 27, 2019, Costco, a large American membership-based warehouse discount retail chain, opened its first store in mainland China in Minhang District, Shanghai. On the first day of opening, Costco was already extremely popular. Due to the large number of consumers visiting the store and the excessive customer flow, the store had to announce the suspension of business in the afternoon.

The popularity of its first store has incensed Costco to accelerate its expansion in the mainland Chinese market. The company has already announced plans for a second warehouse discount retail chain store in Pudong, Shanghai, and four new stores in Suzhou, Hangzhou, and Shenzhen.

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