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Sam's Club says Six Factors have Secured Its Mainland Success

Membership-only store thrives despite increased competition from overseas and domestic retailers.

Photo: Certified organic produce: A major lure for shoppers.
Certified organic produce: A major lure for shoppers.
Photo: Certified organic produce: A major lure for shoppers.
Certified organic produce: A major lure for shoppers.

According to the store's management team, six factors have made the Dalian branch of Sam's Club one of the most popular retail outlets in the city – premium goods, competitive pricing, quality of service, adherence to food safety protocols, provision of free parking and a reliable delivery service. The outlet opened in 2012 and has prospered in the face of stiff competition from a number of overseas and domestic supermarket chains operating in the city, including Walmart, Carrefour, Tesco, Metro, Beijing Hualian and Dashang New Mart. It has also proved successful despite being the only retailer to require shoppers to pay an annual subscription.

In terms of premium goods, Sam's Club has built its reputation by offering leading brands from across the world, as well as certified green and organic produce. In term of non-food items, it also offers a range of innovative gadgets and high-tech items.

All such items are said to be competitively priced, largely thanks to the group's bulk-buying clout. Typically, many of its goods are also sold as large economy size multi-buys, offering a distinct price advantage over smaller packs. The group capitalises on these advantages by aggressively marketing itself as offering considerable savings to its members, particularly on items they need to buy on a regular basis.

Photo: Members only: Imported fruit.
Members only: Imported fruit.
Photo: Members only: Imported fruit.
Members only: Imported fruit.

In terms of service, each Sam's Club outlet is designed to be particularly welcoming, while also offering special incentives to corporate members. Its staff training also includes a distinct emphasis on food safety, a protocol said to extend across its sourcing and logistics operations. This has seen the group adopt a strict code of cold-chain management, as well as the implementation of rigorous procedures related to farm residue testing and the authentication of green and organic products. In terms of its in-store bakery, bread is only sold on the day it has been baked, while all cooked food on display is replaced every four hours to ensure it remains both healthy and tasty.

Outside of the actual shopping space, free parking has also proved a major lure for shoppers in Dalian, as well as at many of the group's other sites. With car-parking now a problem in many of the major mainland cities, this has seen shoppers planning on bulk shopping opting for Sam's Club, thanks to its motorist-friendly policies. For those not driving, the group also offers free delivery within 48 hours for all purchases over Rmb2,000, a service that has again proved a major draw for consumers.

The Dalian outlet is just one of the 800 Sam's Clubs now operating across the world. A subsidiary brand of Walmart, the Fortune 500-listed retail group, it takes its name from Sam Walton, the founder of its parent company.

The first Sam's Club opened in Oklahoma in April 1983 and, over the last 33 years, the group has grown to be one of the world's largest members-only warehouse clubs, with more than 50 million paid-up subscribers across the world. In China, the first Sam's Club opened in Shenzhen in August 1996. Today, there are 12 such outlets on the mainland, including branches in Beijing, Shanghai, Shenzhen, Guangzhou, Fuzhou, Hangzhou, Suzhou, Wuhan and Changzhou, as well as Dalian.

Today, the group's corporate mission is to be the world's valuable membership company. To this end, it offers two types of membership – corporate and individual.

Photo: Bulk bought goods on offer.
Bulk bought goods on offer.
Photo: Bulk bought goods on offer.
Bulk bought goods on offer.
Photo: Savings through economy packs.
Savings through economy packs.
Photo: Savings through economy packs.
Savings through economy packs.

Its corporate membership is principally aimed at small businesses and establishments, while individual membership is open to ordinary consumers and their families. Both corporate and individual members are charged an annual fee of Rmb150 for the primary card, with membership being valid at the company's outlets across the world.

Nancy Liu, Dalian Office

Content provided by Picture: HKTDC Research
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