---
title: "First Case of Distributors Venturing into Warehouse Membership Supermarkets!"
description: "Warehouse membership supermarkets are experiencing a resurgence, attracting both established players like Sam's Club and Costco and new entrants like Hema and fudi. Distributor Yan Lu of Daqing's Tao Daqing has successfully transitioned into this model, leveraging her distribution advantages and innovative strategies to thrive."
author: "新经销何年"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2021-07-27"
language: "en"
canonical: "https://xinjignxiao.com/en/articles/first-case-of-distributors-venturing-into-warehouse-membership-supermark-2212c7dd/"
markdown: "https://xinjignxiao.com/en/articles/first-case-of-distributors-venturing-into-warehouse-membership-supermark-2212c7dd.md"
original_source: "https://mp.weixin.qq.com/s/w4Ff1PcBbOR8HezmB7bEEA"
translation: "https://xinjignxiao.com/zh/articles/%E7%BB%8F%E9%94%80%E5%95%86%E5%8F%91%E5%8A%9B-%E4%BB%93%E5%82%A8%E4%BC%9A%E5%91%98%E8%B6%85%E5%B8%82-%E7%AC%AC%E4%B8%80%E6%A1%88-2212c7dd.md"
attribution: "New Distribution — https://xinjignxiao.com/en/articles/first-case-of-distributors-venturing-into-warehouse-membership-supermark-2212c7dd/"
usage_policy: "https://xinjignxiao.com/ai-policy.txt"
---

# First Case of Distributors Venturing into Warehouse Membership Supermarkets!

> Warehouse membership supermarkets are experiencing a resurgence, attracting both established players like Sam's Club and Costco and new entrants like Hema and fudi. Distributor Yan Lu of Daqing's Tao Daqing has successfully transitioned into this model, leveraging her distribution advantages and innovative strategies to thrive.

**Click to read the original article for details**
**
It's not just community group buying that's seeing a second spring of recovery, but also warehouse membership supermarkets!
Looking at the progression of retail formats, after the rapid rise of hypermarkets, convenience stores entered a development boom, and following the convenience store trend, warehouse stores entered a phase of rapid growth.
**We can see established players like Sam's Club and Costco doubling down, new entrants like Hema and fudi joining in, Yonghui Superstores transforming its business model, traditional supermarket giants like Hualian and Carrefour seeking transformation, and even online formats like Chengxin Youxuan's warehouse bulk stores migrating offline.**
Warehouse membership stores are thoroughly booming, with various retail formats gravitating towards this domain. Among these, we've noticed that some distributors have already begun to try their hand at warehouse membership supermarkets.
As a shift from channel to storefront, moving from the back end to the front, **does the distributor community really have the skills to take on the delicate task of warehouse membership stores?**
**New Distribution recently interviewed Ms. Yan Lu, General Manager of Tao Daqing in Daqing City, Northeast China, to discuss how she is venturing into warehouse membership supermarkets and her views on distributors transitioning to this model.**
**The Road of Transformation: Potholes on the Road, Water in the Potholes, Nails in the Water**
"I've been going further and further down the path of internet transformation, and along the way, I've found that every step has a pothole, the potholes have water, and the water has nails!" Yan Lu said humorously.
The predecessor of Tao Daqing E-commerce Company, founded by Yan Lu, was Aohai Huadu Trading, established in 1994, with over twenty years of traditional distribution business.
Of course, during those long twenty-plus years, it was a continuous exploration of the internet, stumbling along the way.
Before 2009, Tao Daqing (Huadu Trading) was doing traditional distribution, acting as an agent for local and regional beverages. With the rise of the internet, Yan Lu entered "pothole-stepping" mode, **from the earliest B2C online malls to the rise of B2B, the O2O home delivery trend, and the capital wave of community group buying—Tao Daqing seized every internet-related trend without missing a single one.**
The final lesson learned was that "in the north, especially on the black soil of Northeast China, the 'internet' always moves half a beat slower than the south. If you follow the normal pace of internet trends or try to seize the first-mover advantage, you often end up ahead of consumer habits."
Even at the start of Yan Lu's transformation into warehouse membership stores, she faced layers of obstacles. At that time, there were no warehouse membership stores in the entire three northeastern provinces, and everyone around her opposed the idea.
**"Some said the investment was too large and assets too heavy, some said the location wasn't on a commercial street, and some said it wasn't in a residential area and was just a 'warehouse'."**
But with her usual stubbornness, Yan Lu carved out 1,000 square meters from her 2,600-square-meter warehouse to use as the venue for the warehouse membership store. And before doing it, she had mentally prepared herself: "If I buy 1 million yuan worth of goods and can't sell them, I can at least give them away, right?"
Why did Yan Lu think warehouse membership stores were the way to go? Because every year during the Chinese New Year, as a distributor, Tao Daqing would put up a banner on the roadside for beer and beverage promotions, and every year the same thing happened: "Customers would come to buy and complain about not having this product or that product."
Yan Lu believed that what merchants fear most is a lack of consumer demand. Since consumers were proactively asking, why not meet their needs? Why not build a warehouse-style store with a dazzling array of products?
**Focusing on Both Membership Fees and Profits**
On October 8, 2020, Tao Daqing Warehouse Membership Store officially opened in Daqing City. The entire operation plan, including venue renovation, products, and shelves, cost nearly 3 million yuan, with 3,000-4,000 SKUs.
The investment was large, and so was the output. According to Yan Lu, the store was packed on opening day, and now daily turnover is guaranteed to be above 50,000 yuan, with an average transaction value generally exceeding 100 yuan. On weekends, turnover soars to 120,000-130,000 yuan.
Additionally, Tao Daqing Warehouse Membership Store officially started issuing membership cards on May 1, 2021. In just over two months, it has developed nearly 10,000 members, with quarterly membership cards at 29.9 yuan and annual cards at 99 yuan. Pure membership fees have already brought in over 300,000 yuan.
**When asked whether Tao Daqing's profit model mainly comes from membership fees or product margins, Yan Lu was unambiguous, stating that they focus on both—this is their advantage.**
In terms of overall product and pricing strategy, Yan Lu has her own logic.
**After field research in several hypermarkets, she found that international brand products generally follow a high-end route, such as imported snacks, beverages, and alcoholic drinks, with relatively high prices in hypermarkets.**
For example, a bottle of Perrier that might sell for 9.9 yuan in a hypermarket sells for only 5.9 yuan at Tao Daqing. The markup in hypermarkets compared to the manufacturer's price can be as high as 50%, while Tao Daqing controls the price difference to around 20%. These products are often not yet distributed nationwide, and manufacturers are relatively lax on price control.
But for products with a unified national price, like Nongfu Spring, for example, a 1x24 pack of Nongfu Spring normally sells for 30 yuan. Tao Daqing initially sold it for 23-25 yuan, but later, because the price was too low, both distributors and manufacturers objected. What to do?
**Tao Daqing adopted a buy-one-get-one-free model: Nongfu Spring returned to 30 yuan per pack, but with a free gift of a 5-liter barrel of a brand's water worth 5 yuan. This way, the market price wasn't disrupted, consumers were happy, Tao Daqing's low-price policy could continue, and both Nongfu Spring and the brand's water could be profitable.**
**Pitfalls for Distributors in Transformation**
When asked if distributors could replicate this model, Yan Lu frankly said, "Distributors have a natural advantage in doing this because they have brands, understand products, have capital, and have warehouses. Especially distributors of snack foods are in a prime position. However, I believe that in reality, more distributors will ruin this model when they try it!"
The Tao Daqing case is highly representative and referential for distributors transforming into warehouse membership supermarkets. Nowadays, some distributors have started to try this transformation, but what phenomenon has emerged?
Most distributors still think of themselves as agents. They have these products on hand and just open a "warehouse." Then they find that the products in their warehouse are too similar to those in supermarkets. **When this happens, why would consumers drive several kilometers to buy something they can get at the corner store?**
If it's about cheapness, convenience stores and hypermarkets form a stark contrast, but consumers who buy from convenience stores won't go to hypermarkets, and vice versa.
**Therefore, warehouse membership stores need to play a differentiation trump card on top of being cheap. Only with novel and unique products can they attract foot traffic.**
Yan Lu cited a specialty product from Tao Daqing's membership store—fresh-brewed kvass, a local brand from Northeast China.
Fresh-brewed kvass is a beverage dispensed from large tanks, with a shelf life of only three days. Every day, people queue up to buy this drink, priced at 25 yuan per bag (3 jin), selling over 150 bags a day. It's a product not available in any other store in Daqing.
So, as mentioned earlier, Tao Daqing has over 3,000 SKUs, with more than 30% being imported foods and a large number of internet-famous snacks. The logic is simple: similar to Sam's Club's steaks, fried chicken, and bread, it gives consumers a reason they must go.
**Additionally, while product homogenization with hypermarkets is secondary, the most troublesome issue is the internet operation mindset that traditional distributors can't seem to change.**
Yan Lu mentioned that Tao Daqing also took many detours at the beginning, the most typical being that before the warehouse store opened, they distributed 10,000 DM flyers, but not a single one worked.
Because Yan Lu would chat with customers in her spare time to understand what products they wanted and which popular items were missing. She also specifically asked how customers learned about Tao Daqing Warehouse Membership Store, **and all customers gave the same feedback—Douyin (TikTok).**
Later, Yan Lu realized that her store's target audience was middle-class or even upper-middle-class, pursuing high-end, novel, and unique products, and staying at the forefront of trends. They were fundamentally different from the grandparents in hypermarkets who look for cheap vegetables, eggs, and soy sauce in DM flyers.
So, subsequently, on social apps like Douyin, Kuaishou, and Xiaohongshu, in addition to organic user sharing, Yan Lu deliberately made many promotional and guiding moves.
While most users of social entertainment apps like Douyin and Kuaishou see themselves merely as users for entertainment and passing time, Yan Lu was already thinking about how to attract traffic and monetize from these apps. This internet-savvy operation mindset is something most traditional merchants can't change overnight.
**Final Thoughts:**
Finally, regarding the next steps for Tao Daqing Warehouse Membership Store, Yan Lu feels no urgency to open new stores. Instead, she plans to expand the existing store to over 2,000 square meters. Currently, they are in talks to bring in Sam's Club's cold chain and warehouse-style freezers, hoping to turn Tao Daqing into a "mini Sam's Club" for second- and third-tier cities.
On another front, with the continuous down-market and localization of social apps like Douyin, Tao Daqing hopes to deepen cooperation with Douyin, using online coupons to guide consumers to offline purchases and interact with them.
From August 24-26, at the 2021 4th China FMCG Conference hosted by New Distribution, Ms. Yan Lu will also be a speaker, sharing more insights on distributors venturing into warehouse membership stores. Interested friends should not miss this conference!
**PS**: From August 24-26, 2021, the 2021 (4th) China FMCG Conference hosted by New Distribution will be held in Shanghai. **Focusing on industry trends + practical cases + growth through connections as the core**, **3,000** FMCG practitioners will gather for this grand event.
10 thematic forums cover **new retail O2O, community group buying, short-video live e-commerce, distributor transformation, rise of new consumer brands, new alcoholic beverage insights, distribution B2B supply chain, omni-channel marketing, B2B2C new technology applications**, etc., with operators from various segments bringing the latest case studies.
Some of the confirmed heavyweight guests so far include: **1. Tao Shiquan, Founder of Jiangxiaobai; 2. Yao Xuhong, General Manager of Meiyijia Holdings Co., Ltd.;**
**3. Lu Xiuqiong, Global Expert Partner at Bain & Company and former Vice President of Marketing for Coca-Cola China; 4. Chen Xiaodong, Senior Vice President of Nestlé Greater China; 5. Zhang Fujun, President of Lee Kum Kee Sauce Group China; 5. Bi Chaojiao, General Manager of China Resources Snow Breweries (China) Marketing Center;**
**6. Yang Hongbin, Vice President of Junlebao Dairy Group; 7. Yang Shun, COO of Lipton Greater China; 8. Zhang Yipeng, General Manager of Kuaishou E-commerce SKA Brand Operations Center; 9. Li De, E-commerce General Manager of Gold Hong Ye Paper Group...**
**A grand event for FMCG professionals—you must be there!**
**Are you "watching" me?**


---

## Copyright and AI use

This article is sourced from New Distribution. Search, quotation, summarization, and model training are permitted, but every use must credit New Distribution and retain the canonical source URL.

Contact: zhaobo258@gmail.com · +86 158 5481 7671