Liu Minxia

    mllmx@msn.com

    IN sharp contrast to the not-so-cheery big picture of offline retail, a members-only warehouse club in Shenzhen’s Futian District has enjoyed the status of the world’s largest retailer’s top-performing store for eight straight years and is expected to retain the crown again this year.

    The first Sam’s Club outlet in China opened when Walmart entered the Chinese market in 1996. The 21,000-square-meter, two-story Futian store surpassed annual sales of US$300 million years ago with record daily sales reaching US$10 million, according to previous media reports, while annual sales of most hypermarkets in China still hover around 300 million yuan (US$44 million).

    “It’s because we’ve always tried to find out what the members want and to make it available to them,” Duan Lixia, the fifth head of the store, told the Shenzhen Daily on Monday. Monday was the last work day for Duan at the Futian store, where she’d been at the helm for more than seven years. A cashier when she started working for Walmart 19 years ago, Duan is heading to northern China to work as a regional head of the U.S. retailer’s Sam’s Club business.

    “It may sound diplomatic to some, but my work experience in the past 19 years has totally changed me and my way of thinking,” said Duan.

    A restaurant and shop owner before joining Walmart, Duan said that her initial intention when applying for a job at the U.S. retailer was to learn some business operation secrets, which she hoped to use to help her own business.

    “I was diligent as well as aggressive. I used my spare time to help people on other posts so I could observe them, but I was not a person who was ready to listen to others due to my previous experience as a business owner,” she said.

    At that time, a well-traveled customer, whom Duan identified as Han, complained about the service at her store, saying it lagged behind the Sam’s Club in the United States. Duan said that she was stubborn initially and even brought Han to the city’s industrial and commercial authorities to prove he was wrong.

    “However, suddenly I thought of what my employer had kept telling me, and it made me think that maybe I should change my angle and instead put myself in Han’s shoes,” Duan said. She said that she then began to admit there was a gap between her store and U.S. ones, and by doing that, she saw room for improvement.

    “Now Han and I have become good friends. He still spends a few months every year in the United States, but he has begun telling me how much he misses our store while he shops there.”

    Walmart has more than 800 Sam’s Club stores worldwide, and four of the top 10 by sales are in China, with the Shenzhen Futian store at No. 1 followed by a Beijing outlet.

    (Continued on P3)

    Showing the reporter an assortment of trophies, medals and certificates she and her store had received for their performance over the years, Duan said that she also had to attribute the sales boom to the city, where the retailer is headquartered in China.

    “Customers in Shenzhen are more open to new things, and their buying power has grown as the city’s economy expanded,” said Duan. The oldest Sam’s Club store in China, has a higher proportion of memberships for businesses, like school canteens and restaurants, which make up 30 percent of memberships but contribute much more to sales since their per ticket sales are much higher than individual shoppers.

    Shenzhen customers have appreciated the value of being a Sam’s member, so the Futian store’s membership was not affected when the annual membership fee was upgraded from 150 yuan to 260 yuan in April, she said.

    One strategy Duan has used to retain members is to offer free food samples for customers to taste, which, more often than not, has given her clues on how to arrange the items in the store.

    One example that Duan cited when a free tasting led to sales success were the waffles packaged under Sam’s Club’s private brand Member’s Mark when it was launched.

    “I didn’t pay enough attention to the new item until I saw that the food sample stand received frequent foot traffic. We then decided to display a staggering stack of the product to attract attention. Then we offered free samples for four weeks, which resulted in swift sales.”

    Another strategy, according to Duan, is the brand’s strict quality control. Of the store’s impressive sales, a considerable proportion comes from food. Duan cited bananas as an example of the standards her company maintains. Holding a card with pictures showing seven stages of ripening bananas, Duan said that only bananas between stages four and six are allowed to be put on shelves to ensure the best taste.

    To cater to customers’ unprecedented concerns for food safety, the store’s in-store bakery upgraded 70 percent of its offerings by using imported ingredients. The strategy paid off. Sales of one of its baked goods, a durian cake, exceeded 1 million yuan in the first month following its launch in May.

    Targeting affluent families, the club offers only about 4,000 items, while average supermarkets, usually covering an area of about 5,000 square meters, offer around 10,000 items. Direct imported goods contribute to 20 percent of the store’s sales.

    A buying team of less than 200 people at its headquarters in Shenzhen is tasked with selecting only one or two items in each category for all its 14 stores in China.

    “Sam’s Club Futian’s success is an unusual bright spot for offline retail,” said Hua Tao, executive director of the Shenzhen Retail Business Association. “It’s a result of the city’s growing high-income population, a result of its pioneering business model, and a result of the retailer’s professional operation. It’s been ranked among the most satisfactory retail outlets in our annual surveys for years.”

    Expecting the Futian store to retain the sales crown again this year, Duan didn’t dismiss the possibility that it might be surpassed by another Chinese outlet some day. However, Duan said that the Futian store is unique as it’s a pioneer that has trained a number of staff members who later went on to become managers of other Chinese outlets. Employing roughly 500, the Futian store still has more than 50 employees who have been working there since it opened 20 years ago.

    “People are proud of working here, not only managers, but also grassroots employees,” said Duan. “We take pride in the products and services we offer and in our members’ trust.”