American membership-only warehouse club Costco opened its maiden store in China this week in a suburb of Shanghai and had to shut down just a few hours into business. Shoppers swarmed the store for bargains, with prices at the offline store lower than Costco’s online shop on Tmall.

Richard Chang, Costco's senior vice president for Asia, revealed earlier the brand had a “conservative” goal to sign up at least 100,000 new members for the new store, said to be a critical point to sustain its future development.

Chang told AFP last week that data gleaned from its Tmall presence since 2014 convinced the retailer that Chinese consumers were now ready for a bricks-and-mortar version.

Though the China debut was cut short due to chaos, its soft opening last week already had local residents queue up to sign up for discounted membership fees of an annual CNY199 (USD28), compared to the normal price of CNY299.

Total sign-ups have already broken Costco's global record for pre-opening memberships, with the previous record held by its Japan brick-and-mortar store.

Like in the US, the 14,000-square-metre warehouse in Shanghai's Minhang district sell products mostly in bulk to maximise their cost performance, especially in the thorny area of food retail.

Brandigo, the sole China agency responsible for marketing and PR for Costco in the run-up to the launch, executed a multi-channel content campaign with key messages based on product quality, choices and savings due to bulk buying. Steven Proud, global marketing director at Brandigo, told WARC that video testimonials on social media, supported with ad placements and a KOL campaign, were particularly effective.

The main rival of the famed membership-based warehouse retailer is Sam's Club – another membership-based warehouse – that has been in China for more than two decades with 26 stores. In China, Costco's retail and loyalty-marketing model is uncommon, and the Shanghai store's performance will serve as a gauge to assess whether to push deeper into the China market, Chang told Shanghai Daily.

Sourced from Brandigo, AFP, Shanghai Daily