THE RISE OF THE MEMBERSHIP-ONLY WHOLESALE SECTOR IN CHINA

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Following Alibaba’s example, Yonghui, Suning-Carrefour and fudi are opening membership-only wholesale stores in China.

Yonghui opened its first membership store in May and for more are under planning. The retailer upgraded one of its Bravo YH supermarkets in Fuzhou, China to a wholesale store. Launched on May 1, the store occupies an area of 11,000 sq m. The warehouse-style industrial shelves display the goods in bulk packages. In-store communication is centred around everyday-low-price.

To provide a convenient shopping experience, the retailer has set up unique services including staff riding electronic balance bikes inside the store, providing customers a helping hand, answering queries and providing support; Yonghui Station provides a door-to-door home delivery service; and shuttle buses provide customer transport.

Yonghui plans to open four more wholesale stores in the summer, two in Fuzhou and two in Chongqing.

fudi opens a localised wholesale store in Beijing

Following suit, fudi opened a membership store in Chaoyang District, Beijing, China.

The store is set over four floors. The sales area is on the first floor, the third and fourth floors are car parks, with the capacity to accommodate 600 cars.

The sales area is around 6,800sq m, divided into several zones such as fruit and vegetable, seafood, ready-to-eat and snacks. It carries more than 20,000 SKUs, 70% are directly-sourced fresh products. According to the retailer, its fresh products are 20% cheaper than other retailers in the market. Its private label goods account for 25% of the range. The goods are sold in large packages and full boxes, suitable for family purchases.

Jiong-Jiong Yu, senior retail analyst at RetailAnalysis, said: “fudi has taken consideration of shopping habits and behaviours of local consumers when designing the store layout and product structure. The key categories are fresh and cooked food, meeting the needs for family life.

“The annual membership fee starts at €46.87. Member benefits include free parking, free car wash, birthday gifts and other value-added services. Its WeChat mini program, provides door-to-door delivery services.”

The retailer plans to open two further stores in 2021, which will help it achieve its network expansion goal to 20 stores over the next three years.

Suning-Carrefour to open membership store in 2021

Suning-Carrefour CEO Tian Rui said recently that Carrefour will open a membership store in China this year.

Unlike Sam’s Club and Costco, Carrefour’s membership store in China will be “physically close to consumers”.

Yu of RetailAnalysis said: “It will not necessarily be a warehouse-style business. The emphasis is on product quality and freshness. The planned range is positioned around lifestyle of local residents, consisting of 5,000 to 6,000 SKUs. The store mission is to be a one-stop-shop that meets family needs. 

“The store envisages two target groups: family shoppers and virtual family groups that are made of friends.”

Suning-Carrefour’s home delivery range will not cover the whole city, but aims to serve consumers within a 5-10 kilometre radius.

On the subject of the transformation of Carrefour offline stores, Rui revealed that the focus is on the development of membership stores, community stores and cloud stores.

Yu added: “Sam’s Club introduced membership-only wholesale stores to China. However, it is Costco’s high-profile market entry in 2019 that really drew the attention of local retailers, who are starting to test the water.

“Also in China, Alibaba is planning to open 10 more Freshippo X Stores in 2021. The positioning and retail model of wholesale stores are in line with China’s family consumption concept. It is a format likely to be accepted by more customers in the country.“

At the same time, Sam’s Club is speeding up the new store openings, aiming to have 40 to 45 stores by 2022. Meanwhile, Costco has ongoing store planning in multiple locations, including Nanjing, Ningbo, Guangzhou, Shenzhen, Hangzhou, Suzhou and Shang

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