CNN

Costco’s first China store was so popular it shut down traffic. But can it keep the buzz going?

Aug 28, 2019, 5:47 AM | Updated: 1:30 pm

(CNN) — Costco has a cult following in the United States — now it’s China’s turn. The country’s first Costco store is so popular it shut down early on its first day because of too many shoppers.

The retailer opened its first physical outlet in Shanghai on Tuesday morning, and it quickly got too crowded to stay open.

“The store has been clogged up with crowds,” Costco said in a text message alert to its members in China. “To provide you with better shopping experience, Costco will suspend business in the afternoon. Please don’t come.”

Police restored order and managed traffic jams around the store, and urged people to remain calm.

“For your safety, we hope citizens who want to go to Costco can maintain a rational attitude about consumption and avoid going out during rush hours. Those who have already gone there, you must follow orders,” the Shanghai police said in a statement on its verified account on Chinese social network Weibo.

The photos posted by police with the statement included one of a sign Costco put up outside the store, which read: “The parking lot is full. It takes three hours to wait.”

The company even issued an apology on social media for Chinese customers Wednesday, adding that it will put a cap on the number of customers allowed in the store to 2,000 and work with local police to “lessen the disturbance” to its neighbors.

The road ahead

While Costco has had an online presence in China for five years through a partnership with Chinese e-commerce firm Alibaba, the new brick-and-mortar store in Shanghai marks a significant investment.

Costco’s annual membership program, which accounts for the bulk of its profit, is also cheaper in China — it costs 299 yuan ($42) compared to $60 in the United States.

But despite the early buzz around its Shanghai store, the US retailer will have to prove it can stick around for the long haul. It has to contend not only with global rivals like Walmart and big Chinese players like Alibaba and JD.com, but also with China’s rapid economic changes and its growing online retail industry.

“There is big market potential for Costco in China, as its value for money strategy is attractive to many middle-class consumers,” said Michelle Huang, an analyst at Rabobank in Shanghai.

“Whether Costco can succeed in the long term depends how well it can adapt to China’s dynamic retail landscape,” she added.

Day one hype

While there are challenges on the horizon, the early hype around China’s Costco stores is very real.

Echo Zhou, a 28-year-old financial professional in Shanghai, said she arrived at 9:10 a.m., but didn’t make it to the parking lot until an hour later and finally got into the store around 11 a.m.

“The surrounding roads were paralyzed. The highway nearby was also congested,” she said.

“By the time I got in, there were crowds of old people who had already wiped out some shelves.”

Zhou said she decided to leave without buying anything as there was little room for shoppers inside the store, which was packed with crowds and the big shopping carts.

“I will give it another chance three months later as I’ve got the membership,” she added.

The-CNN-Wire
™ & © 2019 Cable News Network, Inc., a Time Warner Company. All rights reserved.

Today’s Top Stories

CNN

Russian President Vladimir Putin speaks during a Security Council meeting in the Kremlin in Moscow,...
Joshua Berlinger, CNN

Putin announces Russia will annex four regions of Ukraine

The annexation announcement follows so-called referendums in the regions that were universally dismissed as "a sham" by Ukraine and Western nations.
1 day ago
A service member of the self-proclaimed Donetsk People's Republic walks past a banner on the doors ...
Anna Chernova, Joshua Berlinger and Rob Picheta, CNN

Putin to host ceremony annexing occupied Ukrainian territories on Friday, Kremlin says

Some of the separatist leaders involved in carrying out sham referendums to secede from Ukraine and join Russia landed in Moscow Thursday, according to a photograph posted by the Russia-appointed deputy head of the Kherson regional military administration Kirill Stremousov.
2 days ago
Coolio, the '90s rapper who lit up the music charts with hits like "Gangsta's Paradise" and "Fantas...
Sandra Gonzalez, CNN

Coolio, ‘Gangsta’s Paradise’ rapper, dead at 59

(CNN) — Coolio, the ’90s rapper who lit up the music charts with hits like “Gangsta’s Paradise” and “Fantastic Voyage,” has died, his friend and manager Jarez Posey, told CNN. He was 59. Posey said Coolio died in the afternoon hours local time in Los Angles on Wednesday. Details on the circumstances were not immediately […]
2 days ago
Hurricane Ian flooding in Naples, Florida....
Amir Vera, Eric Levenson, Jason Hanna and Nouran Salahieh, CNN

Hurricane Ian weakens to Category 3 after making landfall in Florida, but officials warn the worst is yet to come

Hurricane Ian has weakened to a Category 3 storm hours after pummeling southwestern Florida Wednesday, but officials are warning people to stay inside as the worst of the storm is still on the way.
3 days ago
Hurricane Ian Satellite image (CNN)...
Elizabeth Weiler

Hurricane Ian’s ‘extremely dangerous’ eyewall near Category 5 strength is moving ashore in southwestern Florida

DeSantis activated 5,000 Florida National Guard members for Ian's response operations, and 2,000 more guardsmen from Tennessee, Georgia and North Carolina were being activated to assist.
3 days ago
(AP Photo/Bernat Armangue)...
Jennifer Hansler, CNN

US Embassy warns Americans to leave Russia

 (CNN) — The U.S. Embassy in Moscow issued a security alert overnight that urged U.S. citizens to leave Russia immediately while there are still options for departing the country. The alert comes in the wake of Russian President Vladimir Putin’s order for partial mobilization of Russian men to fight in his war in Ukraine. “Russia […]
3 days ago

Sponsored Articles

Young woman receiving laser treatment...
Form Derm Spa

How facial plastic surgery and skincare are joining forces

Facial plastic surgery is not only about looking good but about feeling good too. The medical team at Form Spa are trained to help you reach your aesthetic outcomes through surgery and through skincare and dermatology, too.
large group of friends tohether in a park having fun...
BYU MBA at the Marriott School of Business

What differentiates BYU’s MBA program from other MBA programs

Commitment to service is at the heart of BYU’s MBA program, which makes it stand out among other MBA programs across the country.
a worker with a drill in an orange helmet installs a door in the house...
Price's Guaranteed Doors

Home improvement tip: Increase the value of your home by weatherproofing doors

Make sure your home is comfortable before the winter! Seasonal maintenance keeps your home up to date. Read our tips on weatherproofing doors.
Curb Appeal...
Price's Guaranteed Doors

How to have the best of both worlds for your house | Home security and curb appeal

Protect your home and improve its curb appeal with the latest security solutions like beautiful garage doors and increased security systems.
A paper reading IRS, internal revenue service is pictured...
Jordan Wilcox

The best strategies for dealing with IRS tax harassment | You have options!

Learn how to deal with IRS tax harassment. This guide will teach you how to stop IRS phone calls and letters, and how to handle an IRS audit.
spend a day at Bear Lake...
Bear Lake Convention and Visitors Bureau

You’ll love spending the day at Bear Lake | How to spend a day at Bear Lake

Bear Lake is a place that needs to be experienced. Spend a day at Bear Lake.
Costco’s first China store was so popular it shut down traffic. But can it keep the buzz going?