Scale advantage is one of Costco’s core competitiveness in the United States, while China Costco does not yet have
Editor’s note: This article is from WeChat public account “Retail Shopping +“, author Ning Fujie, Ding Zhechuan, Zhou Jie. Original title: [China Merchants Retail | Depth Report] Costco’s winning geometry in China? – Sino-US Costco Contrast Report (Costco Series Report 2)
Core Summary
The US warehouse supermarket Costco opened its first mainland China store in Shanghai on August 27. In order to analyze its future development trend, we analyze the differences between China and the United States in terms of population density, family structure, eating habits and other major retail formats and commodity structures, compare the retail circulation system and competition pattern between China and the United States, and combine the Shanghai Costco stores. Field research and the development of Costco in other parts of Asia, looking forward to the development of Costco in the Chinese mainland market.
Report Summary
The difference in population distribution and eating habits between China and the United States has led to differences in mainstream retail formats between the two countries. The United States is sparsely populated and has a relatively large family population, which is suitable for large-volume purchases; China is densely populated, with a small family population and a small amount of single purchases; US cold food consumption accounts for a relatively high proportion, while China’s fresh life demand is large, and the frequency of purchases is high. high. Therefore, the US hypermarkets and warehouse supermarkets have a higher market share, while China’s small retail formats closer to consumers are more developed.
The circulation system and competition pattern of the retail industry in China and the United States are quite different. Scale advantage is one of Costco’s core competitiveness in the United States, while China Costco is not yet available, and China’s retail industry has more circulation links, or it is more difficult to obtain direct support from brand owners. In addition, the developed e-commerce industry will also be the challenge that Costco faces in China.
Costco China Store Research: Basically follow the American style, the price advantage of the standard is obvious. From the grassroots research situation, Costco Shanghai store basically continued the American display layout and business philosophy, and most of the commodity prices during the opening period also have obvious advantages. However, considering the opening promotion factors, it is still necessary to observe whether the future price advantage can be maintained for a long time.
Costco’s history and success in other parts of Asia. Costco had been cold at the beginning of its development in Taiwan and Japan. However, Costco always adhered to the business model of large-volume, factory direct supply and membership system. At the same time, it actively adjusted the products locally, and finally achieved remarkable results in Japan, South Korea and Taiwan. Drawing on the development history and successful experience of Costco in Asia, we believe that Costco also has the ability to occupy a place in the Chinese mainland market.
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