Published: Fri, August 30, 2019
Money | By Ethel Goodwin

Costco opened its first store in China, and everyone came

Costco opened its first store in China, and everyone came

Costco opened, then promptly closed, its first location in China yesterday after it became overcrowded with customers. "Our buying teams have already been in Perth a couple of times and had some discussions with a large number of suppliers", said Patrick Noone, Managing Director, Costco Australia, said to the The West Australian.

Images posted online showed shoppers clambering to get in, jostling with others to grab roasted chickens and meat, and waiting in huge lines at the checkout.

"Please do not come", the message ended, with a plea.

On Tuesday afternoon, Costco announced on its official app that its business would be temporarily suspended in the afternoon to provide a better shopping experience.

A woman pushes a trolley with a teddy bear during the opening day of Costco's first outlet store in mainland China. One member told Caixin that just one hour after the opening, Costco issued an update saying the store was full and newcomers needed to wait three hours for entry. "During the upcoming week, we'd like to ask our members to check there SMS before visiting-we will notify you if we are nearing maximum capacity or if there are long wait times".

People visit the first Costco outlet in China on the stores opening day in Shanghai
People visit the first Costco outlet in China on the stores opening day in Shanghai

In June, French chain Carrefour agreed to sell 80% of its China business to domestic retailer Suning after suffering recurring losses.

So I morphed into the stereotype, a walking embodiment of "Capitalism with Chinese Characteristics", flashing my red bills bearing the portrait of Chairman Mao, embracing my consumerist passion in an authoritarian Communist state.

Membership at Costco Shanghai has been available since July 1, with an annual membership card priced at 299 yuan ($42).

However, the store does have a secret weapon of sorts that separates it from other local supermarkets. Hoards of Chinese consumers poured into the store the second after it opened, pulling products from shelves as if they were free.

Analysts have said that Costco may do better in larger Chinese cities than in smaller ones because of differences in customer recognition of the USA brand. But in China's highly segmented retail market, suppliers have more choice, eroding such an advantage.

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