The trade war between the U.S. and China clearly wasn’t on the minds of the Chinese shoppers that stormed Costco’s first-ever store in the country on Tuesday.
Costco (COST) cut the ribbon at its new store in Shanghai and proceeded to watch shoppers overrun the expansive aisles, as seen in numerous posts on Twitter. In fact, the crowds got so big that the store was forced to cut opening day short over safety worries, according to news reports. For Costco, the day one response — and the inevitable surge in new memberships — should temper concerns on Wall Street that its bulk-selling model wouldn’t work in the hyper local Chinese food market.
A Costco spokesperson didn’t immediately return a request for comment on membership signups.
It’s very likely that Costco becomes a key retailer in China as the growing middle class — which is triggering investments in larger living spaces and creating more income — drives demand to buy in bulk (which is still a rather unique model in the country).
Costco Chief Financial Officer Richard Galanti confirmed on a May conference call with analysts it plans to open its second warehouse in China within the next two years despite trade war concerns.
“China’s a little unique in many ways aside from any issues right now with tariffs. That’s not hopefully a long-term issue. Each item has to be registered separately,” Galanti said.
Costco just opened its first store in China and had to close it after 5 hours due to too many people…The video on Douyin captured the craze pretty well $COST pic.twitter.com/Uots66O1Nj
— Krystal Hu (@readkrystalhu) August 27, 2019
#Costco opened its Shanghai outlet, causing traffic jam and huge crowds waiting to shop. Police were even said to #herebyorder close the store for security reason. Welcome to #China . pic.twitter.com/GwgTaYoCT1
— Wang Hao (@hongfenghuang) August 27, 2019