Costco’s (COST) expansion into China seems to be a massive success so far?

The average Costco warehouse in western countries average around 60k subscriptions. In other Asian countries a warehouse might get around 100k subscriptions after 2 years of being open.

After the Warehouse in Shanghai opened in late 2019, its subscription count grew to 250k in under 3 months. With the warehouse shutting down local traffic and being forced to close early due to the chaos that ensued on opening day.

Costco plans on opening a second warehouse in Suzhou. And may grow more rapidly after they gain more experience with operating in China.

“We typically open 2-3 locations in a country, and see how they operate over the first couple of years, … We are off to a good start with our first opening last year.” – Richard Galanti, CFO,

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“It may take a couple of years to improve efficiencies. That’s one of the reasons why we generally go slow in new countries because we want to get it right from customer experience and also from the operational side,” he added.

With China’s growing middle class and Costco’s brand being extremely popular among the Chinese… It could be plausible that China will end up becoming the majority of Costco’s revenue one day?

Sources:

www.google.com/amp/s/amp.cnn.com/cnn/2020/08/27/business/costco-china-intl-hnk/index.html

asia.nikkei.com/Business/Retail/Costco-plans-more-China-openings-as-sales-boom-at-Shanghai-store2