---
title: "Aldi, the 'Paradise for the Poor,' with Annual Revenue of 600 Billion, Is Also Anxious"
description: "Aldi, the hard discount giant known as the 'paradise for the poor,' recently opened its largest store in China in Jinshan, Shanghai. The store exceeds 1,000 square meters, 20-30% larger than previous stores, with more checkout counters for a better shopping experience. Besides Jinshan, Aldi has opened several stores in outer suburbs, attracted by lower rents and testing a larger store format. As a renowned budget community supermarket in Shanghai, Aldi's shift to larger stores reflects both ambition and anxiety."
author: "H.H"
publisher: "New Distribution"
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published: "2024-10-31"
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---

# Aldi, the 'Paradise for the Poor,' with Annual Revenue of 600 Billion, Is Also Anxious

> Aldi, the hard discount giant known as the 'paradise for the poor,' recently opened its largest store in China in Jinshan, Shanghai. The store exceeds 1,000 square meters, 20-30% larger than previous stores, with more checkout counters for a better shopping experience. Besides Jinshan, Aldi has opened several stores in outer suburbs, attracted by lower rents and testing a larger store format. As a renowned budget community supermarket in Shanghai, Aldi's shift to larger stores reflects both ambition and anxiety.

As a hard discount giant and known as the 'paradise for the poor,' Aldi recently opened its largest store in China in Jinshan, Shanghai.
It is understood that the first store in Jinshan covers an area of over 1,000 square meters, an expansion of 20% to 30% compared to previous stores. At the same time, Aldi has added more checkout equipment to provide a more comfortable shopping experience.
In fact, besides the Jinshan store, Aldi has opened several other stores, mainly expanding to outer suburbs, partly due to lower rents and partly to experiment with a larger store format.
As a well-known budget community supermarket in Shanghai, Aldi has always put consumer needs at its core, consistently offering high-quality, low-priced products. After focusing on community business districts for years, why is it now trying larger stores? Behind this may lie its own ambitions and anxieties.
**The 'Pinduoduo' of Supermarkets**
Ice cups at 1.9 yuan, liquor and body wash at 9.9 yuan, a box of 20 eggs at 13.9 yuan, and Orleans roasted chicken at 19.9 yuan—it's hard to believe these prices exist in Shanghai, which has its own 'independent currency system.'
All of this happens at Aldi, the offline retail supermarket called the 'paradise for the poor' by consumers.
Public data shows that Aldi is a German chain supermarket founded in 1993, known as the 'originator of hard discounts.' In 2017, Aldi opened a Tmall flagship store to provide imported goods to Chinese consumers, initially aiming to target middle-class consumers like Sam's Club. Unexpectedly, the domestic retail market was struggling under the impact of online platforms, and consumption downgrading was becoming mainstream. So Aldi shifted its approach and started a hard discount business in Shanghai.
Image source: Aldi WeChat official account
In offline stores, Aldi's 'Super Value' series is basically placed in the center of each category. From purified water for a few cents, sanitary pads at 3.9 yuan, rice wine at 5.9 yuan, and shampoo at 9.9 yuan, even young people who are careful with every penny can't help but queue up to buy.
At the end of August this year, Aldi conducted another round of price cuts internally, covering fresh produce, beverages, daily necessities, and other categories, with the highest reduction close to 40%. As of now, Aldi has over 500 products priced at 9.9 yuan or below, accounting for 25% of all products.
Low prices easily give the impression that product quality is just so-so, but in reality, Aldi has quality comparable to Sam's Club. Walking into its offline stores, you can clearly see that a considerable portion of the packaging is simple with white background and blue text introducing product information. The space is open and neatly arranged, making you think it's a very expensive high-end series.
On social media platforms, consumers' admiration for Aldi is evident. Searching for 'Aldi' on Xiaohongshu, you can see many product recommendations and 'grass-planting' notes. Many people even use Aldi as a regular alternative to Sam's Club.
Image source: Xiaohongshu
Data shows that in 2023, Aldi's international revenue exceeded $100 billion, slightly higher than Sam's Club. As of now, Aldi has opened 60 offline stores, mainly in Shanghai.
So, how does Aldi turn a 9.9-yuan business into $100 billion in revenue?
Low price is certainly the primary factor. In fact, beyond low prices, to further save money for consumers, Aldi does not charge membership fees like Sam's Club; all consumers can shop in-store.
Secondly, while products are cheap, Aldi does not lose brand appeal, claiming to guarantee the most basic dignity for countless Shanghai drifters. To meet the shopping needs of single people, Aldi also thoughtfully offers various small packages, so there's no need to worry about waste due to large quantities.
If you add regular discounts, humorous marketing, thoughtful service, and the distinctive Aldi Kitchen, Aldi has firmly grasped the core preferences of contemporary young consumers.
**How Does It Achieve 'High Quality and Low Price'?**
An Aldi executive once wrote in a book called 'The Simple Path: The Management Method of German Retail Giant ALDI,' 'The company has set extremely low gross margins in the German market, and once it finds that purchase prices have decreased, it will immediately lower selling prices.'
In the fiercely competitive offline supermarket track, Aldi consistently implements a 'price-for-volume' strategy, aiming to attract consumers through low prices and thereby increase its scale.
With the support of scale in the traditional retail industry, brands naturally have higher bargaining power, which in turn makes Aldi's competitive advantage in the market more obvious.
In fact, to have more say in the path of 'extreme cost-effectiveness,' Aldi has almost developed its private brands to the extreme.
Data shows that since opening its first store in Shanghai in 2019, in just five years, Aldi's private brand products have accounted for over 90% of its products, including multiple series such as the 9.9-yuan Super Value series. In comparison, Sam's Club's private brand sales account for only one-third of total revenue.
Image source: Aldi WeChat official account
To further reduce costs, Aldi is also actively building a localized supply chain.
For example, the domestic Luxi yellow cattle and organic Shimen native chicken introduced in various stores are sourced from local suppliers to cater to local consumer habits. To ensure product quality, Aldi typically maintains around three suppliers for different categories, conducting high-frequency price comparisons. After quoting every two weeks, they choose the most suitable supplier. Aldi even goes deep into production and transportation to help suppliers reduce costs and increase efficiency, ultimately achieving long-term sustainable low prices.
In terms of store location, Aldi stores are usually between 500 and 800 square meters, avoiding core urban areas and choosing residential communities with high foot traffic. This more approachable and down-to-earth approach undoubtedly helps Aldi further reduce rental costs.
Image source: Aldi WeChat official account
Of course, Aldi does not just lower prices by cutting costs; it has not neglected quality upgrades.
In June this year, Aldi launched a 9.9-yuan strong-flavor pure grain liquor with 52% alcohol. Since its OEM is Qinyuanchun Distillery, the same specification liquor sells for 188 yuan on Taobao, and the market response was quite enthusiastic.
Earlier, the managing director of Aldi China said bluntly, 'Chinese consumers are becoming more rational. They care about where their money goes, value price, but also do not lower their quality requirements. This is an opportunity for Aldi.' No wonder many professionals say, 'Low price is a capability, not a promotional tool.'
In addition, unlike traditional retail supermarkets that pursue 'large and comprehensive,' Aldi focuses on minimalism.
The average SKU count per store is usually around 2,000, including 1,500 daily necessities and 500 seasonal items. The selected SKUs bring a more stable supply chain system and improve inventory turnover. It is understood that Aldi's item turnover rate is five times that of Walmart.
Undeniably, the 'poor man's supermarket' Aldi provides consumers with another option to buy without thinking, and it has now opened its largest store in China. But this does not mean there are no anxieties and challenges ahead.
**Annual Revenue of 600 Billion, Yet Still Anxious**
In the past few years, the hard discount format has expanded crazily in China. According to Euromonitor data, the discount store market in China was 2.595 billion yuan in 2022, a year-on-year increase of 15.4%. If you pay a little attention while shopping offline, you can see various discount stores.
To some extent, Aldi is similar to Sam's Club in positioning, both belonging to 'hard discounts.' The difference is that membership supermarkets like Sam's Club and Costco usually prefer large stores, often starting at tens of thousands of square meters, attracting consumers from the entire city. In contrast, Aldi focuses more on community business districts, with store sizes not much different from ordinary offline supermarkets.
From this point alone, Aldi's focus relies heavily on more stores to achieve comprehensive coverage.
Image source: Aldi WeChat official account
In 2022, Aldi set a goal to open 500 to 600 stores in Shanghai. But now, after opening nearly 60 stores, it is gradually hitting the ceiling. From another perspective, there are fewer and fewer community business districts that meet Aldi's store requirements. This is why, starting from 2023, Aldi has continued to upgrade its price war on top of its already favorable prices, including 9.9-yuan liquor.
The low-price strategy itself is not a problem, and consumers often like it, but it is likely to bring significant performance pressure to Aldi. Data shows that Aldi's average daily sales per store are only about 55,000 yuan.
In addition to the potential ceiling of the business model, some low-priced products have already backfired on Aldi's reputation. For example, Aldi previously launched a 9.9-yuan pure grain liquor that was touted as subverting the liquor industry. Some consumers reported feeling dizzy and unable to sleep after drinking it, and others questioned whether Aldi's liquor was actually alcohol-based.
Of course, the more critical issue is the fierce competition in the entire hard discount track, which has also made Aldi feel a sense of crisis.
As of now, players in the domestic hard discount supermarket sector include Hema Fresh's Hema Outlets and Dingdong Maicai's Dingdong Outlets, all racing to expand stores.
Take Hema Outlets as an example: it has opened over 60 stores in Shanghai, more than Aldi. In addition to store coverage, many Hema Outlet products are even cheaper than Aldi's. For example, the same 500-gram pack of Yunnan blueberries costs 69.9 yuan at Aldi, but only 59.9 yuan at Hema Outlets.
Including beef rolls, lactic acid bacteria drinks, eggs, etc., Hema Outlet prices are more affordable than Aldi's.
At the same time, Hema Outlets has also adopted the same combination of 'private brands + streamlined SKUs' as Aldi. Currently, Hema Outlet's private brands mainly focus on frozen meat and poultry, juice desserts, and other categories, accounting for more than 50% of total SKUs. The SKU count has also been reduced from over 5,000 to more than 2,000.
Local brands have never been afraid of price wars. As competitors in the hard discount track continue to make efforts, even though it is called the 'paradise for the poor,' Aldi's current situation is somewhat awkward. Opening large stores is undoubtedly a new exploration of its business model, but the final effect remains to be tested.


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