US membership-only retailer Sam’s Club has sped up its expansion in China this year, with the launch of its sixth Beijing location on Monday drawing long queues of eager shoppers.
The Walmart-owned warehouse retailer has found a winning formula in China, with its value pricing and exclusive goods attracting middle-class consumers even as some foreign brands shut down stores or pull out of the country.
Sam’s Club said last month that it had 10.7 million paid members in China as of June. Its total annual membership revenue could hit 3 billion yuan (US$450 million) this year, with its basic and premium memberships priced at 260 yuan and 680 yuan a year, respectively.
“The appeal of Sam’s Club is the breadth and quality of goods offered along with wholesale pricing,” said Cathy Chao, senior director of Asia-Pacific corporate ratings at Fitch Ratings. “Many goods are unique and cannot be found through alternate channels, and consumers hold a general impression of consistently high-quality goods at a reasonable price, which can justify the membership pricing.”
In addition, the membership model encouraged frequent visits by consumers seeking to maximise the value of the annual fee, Chao added.
The company said that it planned to open 13 new Sam’s Club stores nationwide this year, including in several lower-tier cities, bringing the total to 76.