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Hong Kong (CNN Business) - Costco has created a group of cult followers in the United States, and now it is the turn of China. The first Costco store in the Asian country has been so popular that it had to close early on its first day due to the huge number of buyers.
The retailer opened its first physical outlet in Shanghai on Tuesday morning, and quickly filled up with so many people that it could not remain open.
"The store has been stuck with crowds," Costco said in a text message alert to its members in China. “To give you a better shopping experience, Costco will suspend business in the afternoon. Please, don't come. ”
Police were deployed to restore order and handle traffic jams around the store, and police urged people to remain calm.
“For your safety, we hope that citizens who want to go to Costco can maintain a rational attitude about consumption and avoid going out during peak hours. Those who have already gone there should follow orders, ”said Shanghai police in a statement in their verified account on the Chinese social network Weibo.
The photos published by the police with the statement included one of a sign that Costco put outside the store, which said: “The parking lot is full. Three hours of waiting. ”
The way to go
While Costco has had an online presence in China for five years through a partnership with the Chinese e-commerce company Alibaba, the new physical store in Shanghai marks a significant investment.
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The annual Costco membership program, which accounts for most of its profits, is also cheaper in China: it costs 299 yuan ($ 42) compared to $ 60 in the United States.
But despite the first rumors about its Shanghai store, the US retailer will have to prove that it can stay long term. It has to deal not only with world rivals such as Walmart and major Chinese competitors such as Alibaba and JD.com, but also with the rapid economic changes in China and its growing online retail industry.
"There is great 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.
"If Costco can succeed in the long term, it depends on how well it can adapt to China's dynamic retail landscape," he added.
First day bass drum
While there are challenges on the horizon, the early peak around Costco stores in China is very real.
Echo Zhou, a 28-year-old financial professional in Shanghai, said he arrived at 9:10 am, but did not arrive at the parking lot until an hour later and finally entered the store around 11 am
“The surrounding roads were paralyzed. The nearby highway was also congested, ”he said.
"When I arrived, there were crowds of older people who had already emptied some shelves."
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Zhou said he decided to leave without buying anything, since there was little room for shoppers inside the store, which was packed with people and large shopping carts.
"I will give it another chance within three months when I have the membership," he added.
Costco
