The membership numbers are in for Costco’s first-ever store in China. And boy, are they insane.
Costco (COST) opened its first-ever store in China’s Shanghai on August 27. It proceeded to watch shoppers overrun the expansive aisles and take to Twitter to complain of the over-crowding and poor parking conditions. The crowds got so big that the store was forced to cut the opening day short over safety worries, according to news reports.
Costco Chief Financial Officer Richard Galanti told investors at a Goldman Sachs conference Wednesday that 139,000 people signed up for memberships at the store on day one. The figure had not been previously disclosed.
For Costco, the hearty day one response should temper concerns on Wall Street that its bulk-selling model wouldn’t work in the hyper local Chinese food market.
It’s very likely that Costco becomes a key retailer in China as the growing middle class — which is triggering investments in larger living spaces and creating more income — drives demand to buy in bulk (which is still a rather unique model in the country).
Galanti confirmed on a May conference call with analysts it plans to open its second warehouse in China within the next two years despite trade war concerns. He said at the Goldman conference the company will take a measured approach to China expansion despite the successful first opening.
Costco isn’t alone in selling bulk goods to the Chinese masses. Walmart’s (WMT) Sam’s Club has been in China for about 20 years. The warehouse chain has roughly 24 stores open in the country. It said earlier this year it plans to add 16 more locations in mainland China by 2020.