American shopping giant Costco got an unexpectedly frenzied welcome from zealous Chinese shoppers.
Costco opened its first warehouse club in China today (Aug. 27), in a suburb of Shanghai. Just a few hours into business, it had to shut down in the afternoon because of overcrowding, according to screenshots of messages (some links below in Chinese) sent to customers around 2pm circulating on China’s social media Weibo. Local media reported that local residents swarmed to the store—with cars queuing up to enter half a kilometer (0.3 miles) away, footage from news portal Sina showed.
Costco didn’t address a query on the reported closure, but said it was “very pleased” with the response. “We encountered a record-breaking volume of members who wanted to shop with us,” it said. “We are working closely with local authorities to control traffic flows,” Costco said in a statement to Quartz.
Following the opening of US-based supermarket joint #Costco's first outlet in Shanghai, local residents frantically swarm into the store, resulting in massive traffic congestion in nearby streets. pic.twitter.com/Tav0YusbF3
— Global Times (@globaltimesnews) August 27, 2019
Cars apparently had to wait for three hours to get a parking spot.
sea of people as first ever Costco opens in Shanghai…traffic jams for >1km around store 人山人海 pic.twitter.com/o0g3ZRBOpR
— Tom Hancock (@hancocktom) August 27, 2019
Today, Costco wholesale opened its first store in China. Shoppers in Shanghai had to wait 3 hours for a parking spot… pic.twitter.com/Z4uKpDXb54
— Xi Chen (@xcyale) August 27, 2019
A video clip that was posted on YouTube by user “China on Weixin” showed that there was barely any room for shopping carts to move with the outlet filled with shoppers. The store signs visible in the clip and the shelves match those in video footage from the store taken by news outlets.
Even with 22 counters open for check-out, customers still needed to wait for more than half an hour to be rung up, Sina reported. On Chinese social media, many raved about the prices of grocery and other items. A Shanghai-based Weibo user was excited about the 32.9 yuan ($4.60) price for nearly 4 liters (about 1 gallon) of milk. Inside the shop, shoppers went crazy for steaks at one point, according to another video circulating on Weibo. Some of those videos made their way on to Twitter.
The shopping frenzy could be a result of the heavily discounted membership fees Costco offered to promote its opening. It costs 299 yuan ($41) annual fee to be a “gold star” member in China’s Costco, which is known as kai shi ke (开市客) in Chinese. That’s $19 less than the Costco’s membership fee for the same category in the US.
It’s also opening in the middle of the escalating US-China trade war, that has made consumers more cost-conscious and raised the prices of imported goods.
Richard Zhang, Costco’s senior vice-president for Asia, earlier told AFP that the Costco has a goal of signing up at least 100,000 members for the new store. Costco began online sales on ecommerce giant Alibaba’s Tmall.com five years ago.
Costco’s opening comes as foreign supermarkets struggle to survive in China, given challenges from e-commerce and on-demand delivery services. In June, French supermarket Carrefour sold an 80% state in its China business to Suning.com, China’s largest retail business by sales volume. Carrefour became the latest to join a spate of foreign retailers that retreated from China in recent years, including Tesco, Marks and Spencer and Best Buy.
Update, Aug. 28: The article has been updated with a statement from Costco.
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