Membership stores bright spot in retail biz

Membership stores have continued gaining traction in the Chinese retail market as middle-income consumers increasingly prioritize product quality and healthy lifestyles.

Maidelong, formerly known as Metro China, is accelerating its retail expansion this year, increasing its presence in lower-tier cities while enhancing supply chains and private-label product offerings, said Xu Shaochuan, executive director, chairman and president of the company's supply chain.

In an interview with China Daily, Xu said the retailer is establishing its first distribution center and opening its first store in China's island province Hainan, along with its first store in Wenzhou, Zhejiang province.

"We have quickened our pace in market penetration while strengthening our supply chain to support this expansion," Xu said.

Maidelong has built a nationwide supply chain network that serves 200,000 corporate members in 64 cities. It currently operates 100 stores across 60 cities, catering to over 20 million households.

As competition intensifies in China's membership-based retail market, differentiation through product assortment is becoming a key strategy.

Xu said Maidelong aims to increase the share of its private-label line — M-Select and M-Basic — to 50 percent of its merchandise mix — up from the current 40 percent. M-select is a private brand of globally-sourced products for consumers; Mbasic is a private brand supplying products to B2B enterprise clients.

"The retail industry still faces a serious challenge of product homogenization," he said.

In a bid to enhance its imported food offerings, Maidelong is currently co-hosting the Italian Food Festival with the Italian Trade Agency. The festival features nine major categories of Italian cuisine, covering over 60 subcategories, including iconic products such as cheeses, hams, olive oil, wines and coffee.

"We have specifically selected products with geographical indications and regional certifications to bring authentic Italian flavors to China," Xu said. "This festival is an extension of our European food import and procurement strategy."

Looking ahead, Maidelong plans to expand this initiative to other countries, holding rotating food festivals to introduce more international flavors to Chinese consumers, said the executive.

"Imported goods are a key part of Maidelong's business," Xu said. "One of our top priorities this year is to expand our imported food portfolio to boost domestic demand and enhance our competitive edge."

In November, the company will introduce over 30 new products at the China International Import Expo this year.

"Enhancing both product offerings and market penetration is a priority for all membership store operators," said Jason Yu, general manager of CTR Market Research.

"But for Maidelong, developing private-label brands tailored to young, middle-income Chinese families seems even more crucial."

For membership stores, growth is no longer just about expanding market coverage. Industry experts emphasize the importance of leveraging core strengths while continuously innovating and optimizing offerings, according to Kantar Worldpanel China, a unit of CTR.

This includes introducing exclusive products, enhancing experiential services and integrating supply chain capabilities to create competitive advantages.

By doing so, retailers can more effectively attract and retain target consumers across different city tiers, fostering long-term sustainable growth, according to Kantar.

Maidelong is also ramping up its digital transformation. Xu said the company aims to increase online sales, which currently account for 30 percent of revenue, as its e-commerce grows at a faster pace than offline retail.

As part of this effort, Maidelong has launched its first warehouse nearby model in Changchun, Jilin province, as a trial, to speed up delivery efficiency.

The company operates two digital platforms: Maifuli, a B2B platform, and a B2C platform — Maidelong — developed through Dmall, a sibling unit under its parent company, Wumart Group.

Xu added that Maidelong is integrating AI-driven tools, including DeepSeek big models, to enhance digital operations, improve efficiency and drive business performance.