In recent years, many foreign companies have withdrawn from the Chinese market, but ALDI, the German supermarket giant, has bucked the trend by opening 62 stores in Shanghai. At the end of last year, it also announced the simultaneous opening of new stores in Suzhou and Wuxi. This marks ALDI's first expansion outside Shanghai in its eight years in China. This move undoubtedly reflects that ALDI is continuously iterating, with the next step being deeper cultivation of the Yangtze River Delta market.
Eight Years in China:
From 'Premium Trial' to 'Hard Discount Return'
Looking back at ALDI's eight years in China, its development has been steady:
In 2017, ALDI first tested the Chinese market through cross-border e-commerce on Tmall Global, focusing on imported goods to build a 'premium' image; in 2019, it opened two offline pilot stores in Shanghai's Jing'an and Minhang districts, positioning them as 'community premium supermarkets' and simultaneously establishing online operations. Imported goods accounted for over 60% of store products, with an average transaction value once reaching 200 yuan; from 2019 to 2022, it opened 10-15 stores annually; after 2022, the pace accelerated to 20-25 stores per year; in 2024, annual sales reached 2.5 billion yuan, with average daily sales per store between 105,000 and 110,000 yuan, and expansion began to extend to Suzhou and Wuxi. After the initial two years of dormancy, ALDI localized its supply chain, establishing two direct sourcing bases in the Yangtze River Delta and Pearl River Delta, with 95% of fresh produce sourced directly. In its early days, ALDI positioned itself as a premium supermarket in China, confirming its image as a 'community supermarket + kitchen,' with the brand concept of 'international quality, community price,' opening in convenient locations such as residential areas, apartment complexes, and commercial streets, saving consumers the hassle of traveling to distant large supermarkets. During subsequent operations, it gradually discovered that Chinese consumers prioritize value for money over international brand labels, so ALDI quickly adjusted its strategy, repositioning its brand and changing its slogan to 'Good Quality, Low Price,' emphasizing high cost-performance. It was this shift that brought ALDI back to its roots in China—'hard discount'—enabling it to stand out in the competitive Shanghai market. As local players like Hema and Yonghui launched a 'discount revolution,' ALDI initiated a strategic adjustment in 2023, launching its 'Super Value' private label series, with products like 9.9 yuan liquor and 3.9 yuan sanitary pads, which went viral on social media. Beyond the success of its 'Super Value' private label in Shanghai, ALDI has also invested heavily in marketing. In the oversaturated Shanghai market, ALDI needed to increase brand awareness and exposure. Therefore, ALDI, which never does marketing in Germany to save costs, last year frequently purchased subway advertisements, ran custom bus ads, created giant installations, enlisted celebrity spokesperson Xue Yi, and engaged in provocative marketing. Through a series of bold and creative marketing moves, it quickly boosted its profile.
Localization Code:
Supply Chain 'Precision' and Private Label 'Nuclear Weapon'
In May last year, ALDI's advertisements in Shanghai showcased its strong quality control capabilities. Like all major supermarket giants that emphasize global supply chains, such as Walmart and Costco, ALDI has its own global supply chain. However, during my visits, I found that the vast majority of products in stores are supplied by domestic manufacturers. According to reports, currently in China, ALDI's own products from its global supply chain account for no more than 15%. The main reasons are that while the product structure is similar to that abroad, the sales structure differs significantly, some strategic categories differ from those abroad, and some products cannot be displayed due to store size constraints. Therefore, most of ALDI's partner suppliers are domestic, which helps reduce costs and create more locally tailored products. I recently visited an ALDI store during a business trip to Shanghai. I noticed products ranging from ham sausages made by Linyi Jinluo, to 9.9 yuan liquor from a Suqian distillery, to facial cleansers and shampoos from Guangzhou Shifei. Behind this selection of quality suppliers is ALDI's attitude of 'cautious trust,' verifying qualifications through annual audits, third-party testing, and unannounced inspections. In some categories, testing items can exceed 200, ensuring product safety. However, it's worth noting that whether in partnerships or supply chain development, scale effects are a crucial bargaining chip. Currently, most ALDI stores are in Shanghai with small store areas, and scale effects have not yet materialized. Therefore, when facing strong competitors like Sam's Club and Hema, whether ALDI can secure sufficient bargaining power remains a big question. But undeniably, with fewer than 2,000 SKUs and over 65% private label products, ALDI in China is certainly a 'time bomb.' Such a high private label ratio gives it three major advantages:
Extreme cost-performance: Youbai fresh milk (11.9 yuan/950ml) is half the price of Meiji, with quality meeting EU standards;
Scenario-based innovation: developing low-fat bakery products for fitness enthusiasts;
In an industry speech in October, Wang Puzhong, CEO of Meituan's core local commerce, mentioned that ALDI is very popular on the Meituan platform, with bakery category GMV growing 131% recently and user penetration reaching 36%.
- Differentiation barrier: Unlike Hema NB's 'white label' products, ALDI's private label emphasizes 'quality-price ratio,' such as its 52-degree liquor using Yanghe town base liquor, benchmarked against 100-yuan brands. But at the same time, private labels also have drawbacks. ALDI's private label hard discount model leaves relatively small gross margins, so profitability is a major issue. Additionally, ALDI's scale effects have not yet materialized in China, and its operations involve heavy renovation, experience, and marketing, with costs far higher than ALDI in Germany. How to effectively address this is an urgent issue for ALDI.
Yangtze River Delta Street Battle:
A 'Model Showdown' Among Three Giants
In the past two to three months, competition in Shanghai's community discount supermarket sector has intensified, with the main participants being Hema NB and ALDI. At the beginning of this year, Hema announced nine consecutive months of profitability, with Hema NB as its flagship store format, rapidly expanding in the community discount market and reaching 200 stores by the end of last year. One relies on Alibaba's big data and supply chain efficiency, while the other steadily expands with extreme cost-performance and a global supply chain network. Comparing the two: In terms of categories, ALDI's 1,600 SKUs per store are far fewer than Hema NB's, which reduces procurement costs and improves inventory turnover. However, Hema covers a broader range of categories, albeit with higher operating costs, meeting more diverse needs. In supply chain management, ALDI leverages its global supply chain network, showing clear advantages in cost control and SKU management, with a stable product portfolio. In contrast, Hema NB relies on Alibaba's technological support, operating with a 'front warehouse + store' model, optimizing inventory management to minimize losses, and leveraging strong cold-chain delivery capabilities for efficient fresh product flow. Both Hema NB and ALDI have recently accelerated their expansion beyond Shanghai. Leading community retail companies will gradually dominate the market through scale and supply chain advantages. Now, let's look at another 'old friend' of ALDI—Sam's Club. "Exaggerated! The Swiss roll from the store next door expired before I could finish it. Luckily, ALDI has small packages, and whether you buy more or less, it's cheap." "Worry-free, super value prices, no membership fee, avoiding large packages." These ALDI advertisements are placed in subway stations across Shanghai, clearly targeting Sam's Club. Sam's Club filters high-net-worth users with an annual fee of 260 yuan, while ALDI attracts budget-conscious young white-collar workers with free membership. According to media reports, beyond membership fees and large packages, Sam's Club's once-proud prices also cannot compete with ALDI. Sam's fresh orange juice averages 11.4 yuan per liter; ALDI is only 9.9 yuan. Sam's fresh milk averages 10.45 yuan per liter; ALDI is only 9.5 yuan. Sam's whole milk plain yogurt is 12.5 yuan per kilogram; ALDI is only 10.7 yuan. For ALDI, its community store format diverts orders from Sam's front warehouses, cutting off Sam's core competitiveness in the 'last mile.' In addition to offline stores and its own online mini-program, ALDI also partners with third-party online platforms, achieving nearly full omni-channel operations. Every step of ALDI's layout in China reflects its clear self-positioning, precise grasp of market trends, and deep insight into consumer needs. Many chain formats often blindly pursue scale, ignoring real market feedback and their own capacity, leading to operational difficulties after overexpansion. Behind ALDI's steady expansion, beyond the confidence of a century-old enterprise, is a profound understanding of the market, which is something many domestic chain enterprises should learn from. 2024 was a year of rapid expansion for 'snack hard discount' stores. With the rise of discount supermarkets and savings supermarkets, what changes will the hard discount market see in 2025? How will ALDI's expansion outside Shanghai and Hema's store openings across regions impact local regional distribution networks? From March 17-19, the 10th China FMCG Innovation Conference will be held in Chengdu, alongside the 4th China FMCG Hard Discount Conference, which will invite snack chain systems, brand executives, and distribution benchmarks to have in-depth dialogues on the future changes and opportunities in hard discount. 【New Order · Symbiosis】 ****The 10th China FMCG Innovation Conference Time: March 17-19, 2025 Location: Chengdu, China