Same development cost, but scale crushes: Costco can't catch up to Sam's Club in China
Sam's invested in supply chain and product development early, turning it into a scale advantage; Costco pays equal development costs but suppliers get only a fraction of Sam's order volumes—money can't bridge that gap.
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First-mover wins scale: same development cost, ten times the order volume
Sam's and Costco pay identical product development costs—testing, labor, recipe sampling—but Sam's suppliers might receive 60–100 million yuan orders per SKU while Costco suppliers get only 5–10 million yuan. Fixed costs amortize differently across volume; Sam's spreads them over larger orders while Costco can't. Sam's also cherry-picked the best suppliers first; Costco works with whoever's left. That gap can't be closed with spending.
— WangSupermarkets once thrived on rental fees, not sales margins
Traditional Chinese supermarkets inherited a Taiwan retail model: checkout codes, entry fees, promotion fees, poster fees—sometimes 500–1,000 yuan per SKU per store, plus holiday surcharges. Traditional hypermarkets' gross margins hit 20–30%, nearly double Sam's, but most came from supplier fees, not actual retail spread. Warehouse clubs like Sam's collect almost none of these fees and make profit entirely on sales margins, forcing them to genuinely care who the customer is and what they need—not who pays to get shelved.
— WangRetail has no secrets; excellence gets copied immediately
As Buffett and Munger note, retail is hard and has few secrets—when you do it well, competitors copy. Today's new Chinese supermarkets increasingly look alike: richer assortments, better visuals, smoother flow. Jinglilimen's fresh presentation, Sam's warehouse style—everyone borrows them. As SKU inventories converge and supplier rosters become transparent, 200–300 SKUs are easily replicated. Competition ultimately hinges on operational efficiency and cost discipline, not innovation.
— WangJinglilimen undersells Sam's Club on the exact same mochi snack
Jinglilimen and Jiduo Qi (几多鸡), both based in Changsha, drained foot traffic from Sam's at Hangzhou's Xixi Impression City this year. Price checks show Jinglilimen's mochi at 1.1 yuan per piece—cheaper than Sam's. Shelf visuals and T-shaped transparent box design are also superior. The gap suggests Sam's supply chain isn't optimized: the company relies on a fixed roster of suppliers that rarely admit newcomers, leaving room for flexible competitors to hit lower prices and better aesthetics. These short-shelf-life models without membership fees are called ‘Sam's without the card.’
— WangChina's Aldi is not America's low-income discount store
Aldi operates in rural-urban fringe zones in the US and Germany; in New York, you see wilted cabbage, serving lower-income shoppers. China's Aldi is entirely different: it sits inside malls facing white-collar workers and young professionals. Bowl combos, salads, cold desserts—better executed than traditional hypermarkets. It's best framed as a middle-class budget store, closer to Trader Joe's than American Aldi. Over 90% private label, transitioning from raw ingredients to authentic taste—partnering with heritage brands to restore traditional flavors.
— Neng YiDeveloping a private label product costs 150,000 yuan and four months
Creating a new PB product for retailers like Hema (盒马) takes three to four months from concept to launch. Direct project labor alone runs 150,000 yuan, not counting testing, prototyping, packaging, and later promotion. This barrier means factories without R&D teams and supply chain depth can't take the order. Retailers now demand you define products, not just pay for shelf space. Industry convention suggests a 70:30 or 80:20 ratio of classics to novelties; but novelties cost equally to develop and scale slower, creating hard ROI tradeoffs.
— WangWalmart's private labels look polished but give no reason to repeat
Chengdu's new Woji Select (沃集选) shows sophisticated curation, naming, value propositions, and visual design—excellent seeding on Little Red Book and Douyin. But it's missing one thing: a reason to come back. Name one Walmart private label that's exclusive to Walmart, one you must buy there. His actual shopping: olive oil and beef at Sam's Club, or vegetables and Hunan smoked salt-cured pork at Ding Ding (丁盯) because the latter's range is complete and flavors are unbeatable and irreplaceable. Walmart's classic PLs match competitors closely—first purchase driven by trend content, but repurchase doesn't stick.
— WangJapanese supermarkets stratify by income; same curry, three price tiers
In Osaka, the same 180–200 gram curry beef package sells at 100 yen in discount chains, 300 yen midmarket, and 680 yen in premium stores—all healthy sellers, because they serve different income groups' competing versions of the same need. Premium is short-shelf cold storage, midmarket gets brand partnerships and upgrades, budget solves the basic problem. China's retail endgame will mirror this layered ecosystem: hard discounters, soft discounters, budget stores, mid-market, and luxury all coexisting, not one format claiming everyone.
— WangIn their own words · checked verbatim
If you try to replicate Sam's, you can't catch them, because Sam's has first-mover advantages—their supply chain edge, their low per-unit development costs—which you lack. If Costco copies Sam's approach to chase Sam's in China, it's impossible to catch up.
你去抄山姆的 是不可能跟它上的 因为你有山姆的长版 它的高音的优势 它的产品开发的成本 低成本 你不具备了 我说你Costco用 山姆的路 去追山姆的话 在中国 不可能追得上
Wang11:04
It changed over time. Actually, it did start to shift—at first there was a rental-fee model, but later it moved to a sales-driven logic. Everyone's been through this transition, so China is too.
后来变了 其实后面开始变了 就以前也是收租 收租模式 后面开始改为 卖货逻辑 其实他们都经历这个事情 所以中国也在经历这个事情
Wang22:06
Their mochi—nine pieces for 9.9 yuan—that's really well done. It's basically taking Sam's bulk box and breaking it into smaller pieces at the same price per piece. But their mochi sells for 1.1 yuan each. How much is Sam's? Sam's can't compete with them on price. Sam's isn't even cheaper—it costs more, much more.
他那个麻酥 9个麻酥9块9 做得很好啊 就基本上是把山姆的大盒拆成小盒价格没 但是他麻酥卖 一块一毛钱一个 山姆多少钱一个的 山姆打不过他呀 山姆还没他便宜 没他便宜 更便宜
Wang33:15
Got it—it's a budget supermarket for the middle class, not the American discount chain.
我听懂了 就是中产里面的穷鬼超市 不是那个美国人的穷鬼超市
Neng Yi49:17
Developing a product for Hema—here's what it requires: a one-time investment. In labor costs alone, if you count four months of work, about 150,000 yuan. That's the one-time cost. We're not even talking about whether it sells or not.
我觉得你开一个品 合马开个品 我说说行的话 就一次性投入 从人口成本来讲 如果四个月时间算 15万重要吧 15万的就一次性投入 咱们不说卖好卖不好
Wang1:06:22
Products are how you talk to the consumer—and I'm here to buy things. So Walmart made a ton of private labels. Tell me: of all the products Walmart has created, which do you think are exclusive to Walmart, that you must buy from them? What product gives you a reason to shop at Walmart? Name one.
你是用商品 跟消费者在交流 就是我来是买东西的 所以沃尔马 做了一大堆自由品牌 那你告诉我 今天做了一个 沃尔马哪些产品 是你觉得 只有沃尔马 我是逼买的 是你进去沃尔马 购物的理由 有哪个产品 没有
Wang1:11:25
Take curry beef—about 180–200 grams. In a premium store it sells for 680 yen, roughly 30 yuan. But go to a discount supermarket, it's only 100 yen. Go to mid-market, it's 300 yen. Same curry beef sauce, same size, from 100 yen to 300 yen to 680 yen—all sell well.
它能卖个咖喱牛肉啊 大概一包大概200克 不到180克左右的咖喱牛肉 是卖680日元 而人民并算大概在30块钱吧 但是你去业务超市看 它只剩100块钱的日元 但是你去Live看300日元 就是你看同样是咖喱牛肉 一包这个酱 从100日元300日元到600日元 都能卖得好
Wang1:29:33
Figures
| 2025 China Top-100 supermarket store count change | Down 5.4% year-over-year | 4:01 |
| Sam's Club SKU count and gross margin | Approximately 4,000+ SKUs, gross margin approximately 15% | 15:05 |
| Costco SKU count and gross margin | Approximately 3,800 SKUs, gross margin under 13% | 15:05 |
| Sam's Club private label share and count | Approximately 30%, approximately 1,200+ SKUs | 56:19 |
| US Aldi store size | 400 to 800 square meters | 46:17 |
| Aldi SKU count and private label share | Approximately 1,800 SKUs, private label over 90% | 47:17 |
| Private label product development cost and timeline | One-time labor cost approximately 150,000 yuan, 3–4 month timeline | 1:05:22 |
Glossary
- SKU
- Each distinct product configuration counts as one SKU; a standard measure of store category width.
- PB
- Private label—products developed by the retailer and sold exclusively through their own channels.
- PDQ
- Pre-designed display case: factory-packed cartons designed to go straight to shelf without repacking, saving labor.
- CBS
- Convenience store chain; a format distinct from hypermarkets and warehouse clubs.
How to listen
Retail operators, consumer brand builders, supply chain businesses, and consumer investors who want to understand the economics behind warehouse and discount formats like Sam's Club, Aldi, and Jinglilimen.
First three minutes of guest introduction and Moxiaoxian (莫小仙) brand background—not essential for understanding China's supermarket competitive landscape.