Metro, a name that has faded into silence. The positive side of this silence is its glory in the late 1990s when it was hailed as one of the 'Big Three' alongside Walmart and Carrefour. The negative side is that some consumers' memories of it are stuck in that past glory—'only business members could enter.' In 2020, Sam's Club rose to the center of the retail stage after the 'card-check incident.' While the media tirelessly discussed 'middle class,' 'membership stores,' and 'Sam's,' Metro was placed next to Carrefour, squeezed into a corner, with the latter labeled with 'decline' and 'collapse.' The surge of membership stores includes not only Sam's, Hema, Costco, and Fudi, but Metro is also a key player, even second only to Sam's in importance, though this has been overshadowed by public opinion. Today, the U.S. retail market has only three national warehouse membership store brands: Costco, Sam's Club, and BJ's Club. If the Chinese retail market is to align with the U.S., Metro will surely secure one of the top three warehouse membership store positions in China. Metro China's 30 Years of Ups and Downs Kazuo Inamori said: 'What truly shapes character is not talent or education, but the setbacks and hardships one experiences.' Like great figures or characters, a great brand is not about overnight success, but about surviving complex economic and management cycles. In Chengdu, a post-90s female internet company employee said of Metro: 'I remember going to Metro with my dad when I was little. Back then, not everyone could enter; you needed a business license. So every time my dad went, relatives and neighbors would ask him to buy things for them. At that time, I felt Metro was mysterious, not for ordinary people, even if you had money.' 'Old Metro' is a term of endearment for long-time Metro employees, many of whom joined right after graduation and are still there. When recalling Metro's early days in China, the most common phrase from them is 'Metro was synonymous with novelty back then.' 'Initially, Metro was positioned as pure B2B, serving mainly large and medium-sized enterprises and five-star hotels. We strictly locked the doors; business members had to show their business license to get a card, and without a card, you couldn't enter, just like Sam's today. At that time, people were curious about foreign supermarkets because of the many imported goods, and everyone wanted to see what was inside. There were even scalpers outside the Wuxi store, charging 10 yuan to borrow a card to shop inside...' 'Being able to join Metro was a source of pride. When I first joined, there were many things I had never seen before—a 9,900 yuan rear-projection TV, such a large bottle of foreign liquor... At that time, I was in the Zhejiang region, and we could sell 30 rear-projection TVs in one Spring Festival! Many wholesalers would ask us to quickly allocate them a quota; it was a scramble... Metro's cost-performance was also super high. For example, Dole juice was 35 yuan outside, but only 25 yuan at Metro... Not to mention the most sought-after items like pork, salmon, and seasonings, which were simply unavailable elsewhere.' Metro's glory back then was like Sam's today. When talking about the latter, some old Metro employees smile knowingly, while others say 'they're doing well.' Unconsciously, they exude an air of 'old money.' In 2008, for the Beijing Olympics, Metro was selected as a food supplier because it had the most authoritative HACCP food safety assurance system. Although Metro's position was irreplaceable in subsequent major events like the Shanghai World Expo and Guangzhou Asian Games, looking back, the B2B business had already peaked. That year, Metro's sales in the Chinese market reached 12.646 billion yuan, with per-store sales as high as 330 million yuan, surpassing Walmart and Carrefour. Around 2011, Metro faced a turning point—a change of leadership, bringing in a management team from Carrefour and fully opening up B2C business. It shifted from a 'closed-door business' to 'open-door welcoming guests.' Today, many old Metro employees can't recall the name of that CEO, only remembering him as 'a German who was 2.02 meters tall.' The full opening of B2C business, transforming from a B2B membership store to a hypermarket, was not the 'price of arrogance' as the media claimed, but the helplessness of the old business's inability to sustain growth. In 2009, China's per capita disposable income exceeded the 10,000 yuan mark for the first time, and in the following three years, it maintained double-digit growth. During the same period, Walmart and Carrefour entered a rapid expansion phase, with the former's store count growing from less than 150 to nearly 400. In 2010, Metro had only 48 stores nationwide. In 2012, the number of mobile internet users surpassed PC users, officially marking China's entry into the mobile internet era. Amid the frenzy of Double 11 and 6.18, personal consumption, smartphones, and e-commerce platforms mutually fueled each other, rapidly forming a trillion-yuan incremental market. So, opening the C-end business was an inevitable choice for Metro at that time, albeit filled with pain and confusion. Old Metro employees get emotional when discussing this period. 'The store manager in Zhengzhou said that once the B2C business opened, there were crowds of people every day. We worked hard all day, but at night when we counted the money, it was still the same amount!' 'Metro's entire system was designed for B2B, down to the location of the restrooms. The store manager's office was at the entrance to facilitate business discussions with corporate buyers, unlike Sam's, where you see product pallets and displays right at the entrance. But after going B2C, the original store layout and traffic flow design were no longer suitable. On the other hand, we had to expand SKUs, change product structures, change product specifications, change pricing systems, change shelf displays... In the end, we turned it into a hypermarket, into another Carrefour.' The transformation into a hypermarket helped Metro capture the growth of C-end retail, but the decline of the hypermarket category also dragged Metro into the abyss. 'I haven't been to Metro for years; it's just like a regular supermarket, nothing new.' 'Metro? Is it still around? I thought it went bankrupt!' Even today, many consumers still say this. In 2019, Metro China was acquired by Wumart for 1.5 billion euros. Within the Wumart Group, Metro once again took on the mantle of 'warehouse membership store,' but this time, the hypermarket had to transform into a C-end warehouse membership store, and the strategic rival became Sam's Club, which had risen to prominence with a bang. To this end, Dr. Zhang Wenzhong hired Chen Zhiyu, who had served as Senior Vice President of Sam's Club China and Senior Vice President of Walmart China, as Deputy CEO of Metro China. In 2022, just two years after Sam's became popular, many players rushed into the membership store arena: Sam's had over 40 stores nationwide, Costco planned to expand to 6 stores, Hema X opened 6 stores in Shanghai alone, plus Fudi, M Membership Store, and others. However, many people don't know that under Chen Zhiyu's leadership, Metro opened 24 membership stores nationwide in just two years, with paid members exceeding 3 million. Despite achieving such market results, Metro's perception in consumers' minds remains difficult to change, becoming a huge obstacle to new member acquisition and old member renewal. In Shanghai, a middle-aged white-collar worker said of Metro: 'I used to go to Metro mainly for imported foods; they had German pure imported cheese, chocolate, and milk that you couldn't find elsewhere, but I haven't been in recent years. These are now available in ordinary supermarkets. Nowadays, shopping is about convenience! For daily items, I order from Hema or Dingdong for home delivery. On weekends, I go to Sam's to buy steak, snacks, and fruits. You know, Sam's stuff is really good; you can't find it anywhere else.' What unique value does Metro actually provide to consumers? Not a 'Dream Maker' But a 'Dream Fulfiller' The first question Chen Zhiyu needed to answer was: Who exactly should Metro target? Should it compete for Sam's members or carve out a new path? Re-examining Sam's: Sam's strength lies not only in providing unique, high-quality products to high-income groups but also in offering emotional value and social capital to the 'new middle class.' For influencers, it's a check-in destination; for self-media, it's a traffic hotspot; for daigou, it's a 'goldmine'; for the middle class, it's a shopping destination for the ideal life. Roast chicken, mochi, Swiss rolls, little limes, steak, beef rolls, durian mille crepes... These hit products emerge in batches like celebrities with the seasons, making frontline consumers flock to them. Going head-to-head is suicide; following is waiting for death. Only by finding Metro's exclusive target group and developing products that meet their needs can differentiation and barriers be established. With the help of Yuanliu Strategic Positioning Consulting, Metro's decision-makers returned to consumer value and began to re-examine the potential consumer group of China's warehouse membership stores—the middle class. Three years of pandemic transformed the middle class. As Pinduoduo's market value surpassed JD.com and Alibaba, public opinion shifted from 'consumption upgrade' to 'consumption downgrade.' However, after extensive market research and interviews with countless ordinary middle-class consumers, it was found that consumption upgrade remains the main theme, as everyone aspires to a better life. In Wuhan, a mother of a 6-year-old daughter pointed at Kinder Joy eggs and said: 'My daughter loves these. Elsewhere, they cost about 8 or 9 yuan each, and convenience stores are even more expensive, usually 11 yuan each. Here, look, 33.8 yuan for 5, which is less than 7 yuan each. I've only seen this price here; it's suitable!' In Chengdu, 42-year-old Mr. Zhang, while browsing the seasoning aisle, said: 'For Qianhe soy sauce, the 180-day one is basically no more than 14 yuan. If it's 23.8, I won't buy it. Usually, there will be a promotion in a few days, and I'll buy it then.' In Shanghai, an aunt working in community services pointed at Wanzaimatou dumplings in the frozen food section and said: 'These Wanzaimatou dumplings are 37.9 yuan, 2 yuan more expensive than what I bought before. Usually, at Walmart, Wanzaimatou is about 35.9 yuan per pack. I won't buy it here unless there's a promotion.' They live in different cities, have different ages, incomes, family situations, and lifestyles, but the only thing they share is their way of thinking when shopping at supermarkets: they want both good products and good prices. They don't choose to buy cheap chocolate for their daughters on Taobao because of price; they don't buy non-additive soy sauce under 10 yuan; they don't go to the market to buy dumpling filling and make it at home. What is consumption upgrade? In the daily shopping scenario of three meals, consumption upgrade does not mean buying more expensive products. On the contrary, driven by rationality, consumers will choose to buy higher-quality products with the same or less money, i.e., products with better value for money. After confirming the trend of consumption upgrade, two more findings emerged: one is 'upgrade of consumption structure,' and the other is 'budget control.' Today, the upgrade of middle-class consumption is not just about the quality of a single product, such as upgrading from white pork to black pork or flaxseed-fed pork, but more about the upgrade of the overall dietary structure—upgrading from pork to beef, from freshwater fish to deep-sea fish, from white rice to brown rice. Structural upgrade brings a key issue: pork at 15-20 yuan per jin is affordable, but what if three meals a day include more beef and deep-sea fish? The answer from ordinary middle-class consumers is: budget control. Yuanliu's research data shows: a family in a first-tier city with a monthly income of over 20,000 yuan, or a family in a second- or third-tier city with a monthly income of over 15,000 yuan, is willing to spend 1/4 to 1/3 of their disposable income (about 2,000-3,000 yuan per month) on three meals a day. If it exceeds 3,000 yuan, consumers will directly say, 'Spending so much on food, what about everything else?!' This brings up a problem: if all daily consumption is done at Sam's, it will definitely exceed the budget; if you only buy limited items at Sam's and buy the rest from other channels, then daily shopping becomes very complicated—consumers must think about where to buy what is better. And this is unrealistic for an ordinary middle-class person in a city. Most consumers hope to buy most of the products they need in one place, and for the rest, they can simply supplement online or at their doorstep. Thus, an opportunity arises—consumption upgrade under budget control, which fits the lifestyle of ordinary middle-class families, i.e., 'grounded upgrade.' Returning to the strategic showdown with Sam's, Metro redefined the market landscape with the total price of a shopping cart: Sam's cart has at least 1,000 yuan worth of goods, while Metro's cart only costs 500-800 yuan. Sam's serves high-income groups in first- and second-tier cities who are picky about quality, while Metro serves ordinary middle-class families who want to complete daily consumption upgrades under budget control. Sam's is the dream maker for the middle class, while Metro insists on being the dream fulfiller. It is this difference in strategic positioning that lays the foundation for Metro's brand differentiation. One Point, One Line, and One Surface The second question Chen Zhiyu needed to answer was: How to attract and lock in this group? One Point: Find an extremely differentiated product to create a value-for-money anchor and attract consumers. In June 2023, in Changchun, on the first day of the strategic pilot, two Metro membership stores were packed. Men, women, old, and young pushed shopping carts, queuing in long lines, while the durian section was already surrounded by a sea of people. 'Thai Golden Pillow durian, member price only 19.9 yuan per jin, limited to one per person, 200 available, while supplies last.' For the Northeast, which is at the very end of the fresh produce supply chain, buying a good-quality fresh Southeast Asian durian is not difficult but not easy even today. Due to explicit costs like transportation and spoilage, a whole fruit weighing about 4 jin sells for at least 120 yuan, and those with better variety and appearance can sell for over 200 yuan. That's equivalent to 30-60 yuan per jin. Therefore, local supermarkets like Oya, Yonghui, and RT-Mart did not carry durian. In a short time, Metro created a competitive vacuum. 'The 19.9 yuan per jin Thai Golden Pillow fresh durian' quickly became a trigger point, fermenting Metro's reputation on WeChat Moments and group chats. Even if Oya and RT-Mart followed up with durian products and prices, it was a month later. One Line: Create an extremely differentiated product category to build trust. Returning to the structural upgrade needs of the middle class, beef is the product that best fits this need and best demonstrates value. For beef, ordinary middle-class consumers generally care about whether it's imported, because in their perception, imported quality is far superior to domestic. To this end, Metro selected cuts suitable for Chinese braised cooking in its imported original-cut series, including brisket, ribeye, short ribs, shank, and sirloin, and offered price policies to form a significant product differentiation advantage over competitors. After durian, consumers gathered around the beef freezers. Among them, brisket was the most popular; as soon as staff restocked, the top two layers were snatched up. Finally, staff had to push out all the day's inventory from the cold storage on a large cart at once. One Surface: Extend from the beef series to the entire fresh food area to build brand awareness. In August, as the pilot was nearing its end, Metro's popularity had spread throughout Changchun and the surrounding five counties. Early on a weekend morning, before 10 a.m., several shopping carts were already parked in the fresh food section. The carts contained not only beef but also Ecuadorian white shrimp and Maizhenxuan black pork leg meat, and some even had a box or two of chilled salmon. Just after 11 a.m., the fresh food section was bustling. A woman took five boxes of large yellow croaker at once, clearing the shelf; a dad with a beer belly loaded a whole cart with beef, while his three- or four-year-old child in the cart held a box of roast chicken; an elderly man, while picking pork belly, held his grandson who was stuffing his mouth with beef rolls. A middle-aged couple pushed their cart directly from the entrance to the freezer with shrimp. The wife muttered, 'Buying again, buying again, don't you know the fridge at home is full!' as she pulled her husband's arm back. But the man shook his arm and said, 'If you want to eat, it has to be fresh. That stuff in the fridge for so long, can it taste good?' With that, he threw two boxes of Ecuadorian white shrimp into the cart. Next to them, a young couple, the boy said to the girl, 'Let's make a hearty dish tonight.' He picked up a steak and put it in the cart. 'I want this!' The girl then took the last beef roll. Looking at the cart, there was also a series of Maizhenxuan products—quick-fix dishes, large yogurt, bayberry juice, duck tongues, and several boxes of freshly baked pastries. A little boy sat in a shopping cart, clamoring for his mother to buy snacks, with a large MaMai Bear in the cart. 'Less sugar, mommy will buy you this hawthorn stick and apple meat with the MaMai Bear logo, okay? These are specially for kids.' At the checkout area, two old sisters were pushing a cart full of goods toward the exit, as if loaded with trophies. One lady with heavier makeup said with a smile, 'Look, this cart is less than 800 (yuan), that's so cheap!' At the end of the pilot, the two Changchun stores outperformed all other stores nationwide, with both revenue and new member numbers growing by over 20%. Epilogue In the report 'Seeing the Big from the Small: Brand Chapter' released by Yuanliu at the end of 2023, the comparison of brand trust between Metro and Sam's showed: Sam's leads significantly in first-tier cities, surpassing Metro by 28.5%, but in new first-tier cities, the gap narrows to 3.0%. In second- and third-tier cities, Metro overtakes Sam's. Today, the main consumer force has shifted from first-tier and new first-tier cities to second- and third-tier cities. In these cities, Sam's dreamlike quality seems somewhat weak and illusory compared to Metro's realism. Of course, China's membership store market is just emerging. Although opportunities are scarce, for all players, it's a marathon, just like when the 'Big Three' first entered the Chinese market 30 years ago. PS: From March 14-16, 2024, the 9th China FMCG Innovation Conference, co-hosted by New Distribution and jointly organized by Anneng Zhilian, along with the 2nd China FMCG Hard Discount Conference and the 2nd China FMCG Distributor Conference, will be grandly held in Chengdu! The 2nd China FMCG Distributor Conference will be hosted by New Distribution and co-organized by Zhoupu Data. This conference will revolve around the theme of 'Supply Chain Revolution.' Over three days, there will be one main forum, one China FMCG Hard Discount Conference, one China FMCG Distributor Conference, over ten sub-forums and closed-door exchange sessions, and the first major debut of the 'Extreme Supply Chain' Brand Factory Direct Procurement Fair. It will bring together thousands of FMCG brand owners, distributors, retail innovators, and industry service providers from across the country in Chengdu for continuous brainstorming to explore the challenges and opportunities, changes, and solutions of the supply chain revolution era. In this era of supply chain revolution, a new business era will be born. We hope every participant will still have a place in this wave, and we believe this will be a worthwhile meeting! For conference business cooperation, please contact: