Mingtiandi

Asia real estate and outbound investment news

  • Facebook
  • LinkedIn
  • RSS
  • Twitter
Sign Up / Login Logout

Lost your password?
Register
Forgotten Password
Cancel

Register For This Site

A password will be e-mailed to you.

  • Capital Markets
  • Events
    • 2021 Mingtiandi Event Calendar
    • Join the Mingtiandi Asia Value-Add Forum 2021
    • Join the Mingtiandi Multi-Family Investment Forum 2021
    • Join the Mingtiandi Logistics Real Estate Forum 2021
    • Join the Mingtiandi Sustainable Real Estate Forum 2021
    • Join the Mingtiandi Data Centre Forum 2021
    • Join the Mingtiandi Office Strategies Forum 2021
    • Join the Mingtiandi Proptech Forum in November
    • More Events
  • MTD TV
  • People
  • Logistics
  • Asia Outbound
  • Retail
  • Design & Construction
  • Research & Policy
  • Advertise

US Hypermarket Chain Costco Sets Up in Shanghai

2018/05/10 by Shawna Kwan Leave a Comment

Costco

The signing ceremony between Costco and Shanghai Pudong Kangqiao

American wholesale giant Costco is opening its first store in the world’s second-biggest economy, even as foreign retailers like Tesco and Lotte scale back their businesses in China due to market barriers and disappointing sales.

Costco inked an agreement with state-owned Shanghai Pudong Kangqiao (Group) on Wednesday to set up the headquarters of its Chinese business in Kangqiao, an area in Shanghai’s Pudong district, according to local media reports. Costco is also opening a membership retail club store with Shenzhen-based real estate firm Galaxy Holding in an unspecified location.

An account from Kuaxiaopin.net says Costco will open its first Chinese physical store in Shanghai’s Minhang district in the spring of 2019. The retail behemoth is also planning another store in Pudong, which is set to open its doors in 2021, the report added.

Prior to the news of Costco’s planned bricks-and-mortar venture, the US retailer has targetted Chinese consumers for several years via Tmall, the online marketplace of e-commerce giant Alibaba. Costco announced the new online store in 2014, which sells branded products including healthcare and personal care goods.

The wholesale giant, which operates hundreds of warehouses mainly in the US, also has outlets in Japan, Korea and Taiwan.

Missile Clash Led to Retail Fallout for Lotte

costco

Expect to see Costco in Shanghai, and maybe more cities

Costco appears to be betting that its foray into Chinese retail will fare better than the efforts of some of its global rivals in a market fraught with political risk and hard-to-please consumers.

Costco’s move comes just two weeks after Korean conglomerate Lotte Group’s retail arm Lotte Shopping sold 22 stores in Beijing to mainland rival Wumei, which controls WuMart China, for around 248.5 billion won ($230.2 million). The Seoul-based group had seen a 77 percent drop in sales in China following a geopolitical clash that led to informal sanctions in China.

In February 2017, Lotte Group agreed to provide land for the deployment of the American-built Terminal High Altitude Area Defence (THAAD) anti-missile system, which was opposed by the Beijing government. After the state-controlled media condemned Lotte Group, fire safety authorities shut down 74 of the Korean retailer’s 99 stores across China over alleged violations within two months.

Lotte Shopping entered the Chinese market in 2008 by acquiring Dutch wholesaler Makro’s stores in the country. The company struggled to draw in mainland shoppers, which resulted in a reported loss of $853 million between 2011 and 2015.

Costco Rushes in Where Tesco Failed to Win

Lotte is not the only foreign retailer to have hit the wall in the Middle Kingdom. Top British retailer Tesco offloaded a majority stake in its China businesses a decade after it ventured in the Chinese market in 2004.

In 2015, Tesco sold a majority stake in its China business to local retailer China Resources Enterprise (CRE) and merged its 131 stores on the mainland with CRE’s 2,986 outlets under the Vanguard brand. Tesco was left with a 20 percent stake in the stores.

Related Stories

  • Fosun in Talks to Invest $495M in German Wholesaler MetroFosun in Talks to Invest $495M in German Wholesaler Metro
  • Lotte Sells Mainland Stores to Chinese Rival for $230M After Missile Defense ClashLotte Sells Mainland Stores to Chinese Rival for $230M After Missile Defense Clash
  • Dalian Wanda Buys Shanghai Commercial Site for RMB 575MDalian Wanda Buys Shanghai Commercial Site for RMB 575M
  • FILA Relaunches Shanghai Flagship Store on East Nanjing RoadFILA Relaunches Shanghai Flagship Store on East Nanjing Road

Share this now

  • LinkedIn
  • Share
  • Tweet
  • Email

Filed Under: Retail Real Estate Tagged With: costco, daily-sp, Hypermarket, Lotte, Retail, Shanghai, Tesco

Sustainability Forum

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Altus Cashflow Ebook

Get Mingtiandi Delivered

Sustainability Forum

MTD TV

MTD TV Panel: Vietnam Logistics Real Estate Gains Favour With Investors in 2020

Warburg Pincus, Princeton Digital Foretell Asia’s Data Centre Future

More MTD TV Videos

Latest Stories

goodwin gaw

Gaw Capital Said Planning US SPAC and More Asia Real Estate Headlines

quayside hong kong

IWG Opens in the Quayside in Third Takeover of Hong Kong WeWork Location

JLL Alex Barnes

Hong Kong Office Vacancy Hits 9.3% as Deutsche Bank, AIA Surrender Space

Sponsored Features

Tony Horrell

Colliers’ Global Investor Sentiment Report Anticipates Up to 50% Surge in Investment in 2021 Sponsored Feature

Andrew-Slevin-John-Foord (4)

Insurtech to Help Address Underinsurance Across Asian Real Estate Assets in 2021 Sponsored Feature

CK Lau

Asia Pacific Logistics Sector: Increasingly Varied Sector Requires Multiple Approaches Sponsored Feature

More Sponsored Features>>

MTD-QR-Code-320

Top Stories

Link REIT Buying Half-Stake in Vanke Shanghai Mall for $429MLink REIT Buying Half-Stake in Vanke Shanghai Mall for $429M

Hines Ramps Up APAC Presence With New Hires in Japan, South KoreaHines Ramps Up APAC Presence With New Hires in Japan, South Korea

IWG Opens in the Quayside in Third Takeover of Hong Kong WeWork LocationIWG Opens in the Quayside in Third Takeover of Hong Kong WeWork Location


Connect with Mingtiandi

  • Facebook
  • LinkedIn
  • RSS
  • Twitter

Real Estate News

  • Capital Markets
  • Events
    • 2021 Mingtiandi Event Calendar
    • Join the Mingtiandi Asia Value-Add Forum 2021
    • Join the Mingtiandi Multi-Family Investment Forum 2021
    • Join the Mingtiandi Logistics Real Estate Forum 2021
    • Join the Mingtiandi Sustainable Real Estate Forum 2021
    • Join the Mingtiandi Data Centre Forum 2021
    • Join the Mingtiandi Office Strategies Forum 2021
    • Join the Mingtiandi Proptech Forum in November
    • More Events
  • MTD TV
  • People
  • Logistics
  • Asia Outbound
  • Retail
  • Design & Construction
  • Research & Policy
  • Advertise

More Mingtiandi

  • About Mingtiandi
  • Contact Mingtiandi
  • Newsletter Subscription
  • Terms of Use
  • Privacy
  • Advertise
  • Join the Mingtiandi Team