Source | Retail Circle In 1996, Sam's Club opened its first store in Asia in Shenzhen, China, marking its official entry into the Chinese market. Thirty years later, as of the opening of its fourth store in Wuhan in May, Sam's Club has 56 stores in China. The 56 stores across the country are scattered like stars, with East China accounting for 40% alone. The dense network formed by seven stores in Shanghai resembles a thick formation on a chessboard; the precise placement in "high-net-worth counties" such as Zhangjiagang, Kunshan, and Jinjiang has brought first-month membership penetration close to that of mature markets... On China's retail chessboard, Sam's Club from the United States is using the "open scheme" of Eastern wisdom to launch a silent yet powerful business game. Next, the author will use the long-standing "Ten Rules of Go" as a framework to deeply analyze the exquisite and ingenious moves Sam's Club has made in the Chinese market. First Rule: Do Not Be Greedy for Victory: The Winning Principle of Restraint While traditional supermarkets are entangled with massive SKUs and racking their brains to attract foot traffic, Sam's Club resolutely streamlined its product library to 4,000 items, carving a new path with a "few but fine" strategy. This is not an underestimation of market potential but is based on Sam's Club's deep insight into its target customer base. Sam's Club knows well that its service targets are mid-to-high-end consumers who pursue quality life and are willing to pay for efficient shopping experiences. This group values product quality over variety. With membership fees as a threshold, Sam's Club builds a high wall, successfully filtering out precise consumer groups and isolating non-target audiences. This may seem like a "sacrifice," but it is actually an efficient integration and utilization of resources, focusing limited energy on core customers and providing them with an ultimate shopping experience. SKU is the standard and also the moat that maintains profits; membership fees are the threshold and also the filter for precise screening. This combination of moves makes Sam's Club a unique presence in consumers' minds. For example, Sam's Club's private brand Member's Mark has over 800 items, contributing more than 30% of sales. With high cost-effectiveness and excellent quality, these products have become a key force in attracting members and boosting profits. From data, in the first quarter, Sam's Club China's membership revenue grew by over 40%, and membership numbers continued to increase. Zhu Xiaojing, President and CEO of Walmart China, stated that during the Chinese New Year sales peak last fiscal quarter, Sam's Club membership fee revenue increased by another 35 percentage points, and the membership store business was very busy. This figure strongly proves the commercial power behind Sam's Club's strategy, which achieves sustained profit growth and stable member loyalty through precise positioning and screening. This is not arrogance but clear restraint—Sam's Club only serves specific groups willing to pay for quality and efficiency, deeply understanding the way of "not being greedy for victory." This is like a chess player's composure in refusing unnecessary entanglements, not over-pursuing scale victory but focusing on the core battlefield. Second Rule: Enter the Boundary Slowly: Precise Penetration of County Markets Previously reported, Sam's Club underwent a new round of regional organizational adjustments, re-dividing the existing 6 major regions into 7. On the other hand, Sam's Club was also reported to accelerate its store opening pace in China, increasing from an average of 6 new stores per year to 8-10. Behind this strategy, it is not difficult to see that Sam's Club is preparing for the layout of county markets. Through the division of major regions, Sam's Club will better apply relevant strategies to the city-level sinking markets. By accelerating store openings, Sam's Club will effectively fill more market demands. Currently, second-tier cities account for nearly a quarter of Sam's Club's stores. Facing the county market, an undeveloped commercial area, Sam's Club adopts a cautious and steady strategy. Zhangjiagang, as the third county-level city where Sam's Club has placed a store, its strategy is exemplary. When placing its move, Sam's Club did not blindly follow the sinking trend but chose Zhangjiagang, which has strong economic strength and huge consumption potential, with a per capita GDP as high as 218,000 yuan. Here, Sam's Club "lightly tests" the market with small-scale pilots. Through precise market testing and evaluation, it successfully achieved a first-month membership penetration rate exceeding expectations by 30%. In addition, many Sam's Club daigou (proxy purchasing) physical stores have sprung up in various county towns. Stores like "Sam's Club Selection," "Sam's Club Preferred," and "Sam's Club Collection" in third- and fourth-tier cities sell the same products as membership stores, adopt similar store designs, and consumers are willing to explore and buy, giving Sam's Club strong confidence in laying out the sinking market. Sam's Club's cautious layout is like Xie An of the Eastern Jin Dynasty playing Go calmly during the Battle of Fei River, not rushing for success but placing precise moves after fully assessing the situation. This strategy not only reduces market risk but also accumulates valuable experience for its expansion in county markets. In the layout of high-net-worth counties like Jinjiang and Kunshan, Sam's Club also follows this principle, tailoring product categories and service models based on local economic levels, consumption habits, and other factors, enabling stores to quickly integrate into local markets, win consumer recognition and favor, and lay a solid foundation for further expansion in county markets. Third Rule: Attack the Other While Protecting Yourself: The Balance of Dual-Line Operations When competitors like Costco densely deployed six stores in East China, trying to seize market share with scale advantages, Sam's Club responded with a clever balancing strategy. In Suzhou, Sam's Club simultaneously launched cloud warehouses and physical store construction, and the coordinated development of online and offline made it comfortable in competition. Online, Sam's Club achieves 80% of orders delivered within one hour through an efficient logistics distribution system, while its logistics costs are 15% lower than competitors. This achievement benefits from Sam's Club's refined management and optimization of the supply chain, from warehouse layout, distribution route planning to personnel deployment, every link is carefully polished to ensure efficient online operations. Offline physical stores continue to consolidate Sam's Club's advantages in physical shopping experience, providing consumers with spacious and comfortable shopping environments, rich product displays, and professional customer service. The close coordination of online and offline complements each other, perfectly interpreting the strategic wisdom of "attack the other while protecting yourself," actively attacking to expand market share while firmly defending its position to ensure core competitiveness, enabling Sam's Club to maintain a steady development trend in fierce market competition. Fourth Rule: Sacrifice Pieces to Seize the Initiative: Strategic Trade-offs in Membership Economy While traditional supermarkets rely on channel fee models for profits, Sam's Club resolutely abandons this considerable income source, giving up billions in entry fees annually. This "sacrifice" move is actually a strategic trade-off after deep thinking about the membership economy. This is similar to the first rule "Do Not Be Greedy for Victory." Digging into its market strategy, Sam's Club focuses on enhancing member loyalty and shopping experience, attracting members to join and renew through quality products and thoughtful services. Its excellent member renewal rate is as high as 92%. Behind this astonishing number is Sam's Club's precise mining and deep operation of member value. Sam's Club converts member loyalty into sustained cash flow, forming a stable and sustainable business ecosystem. This "sacrifice pieces to seize the initiative" strategy, like Emperor Taizong of Tang playing chess "sacrificing small to gain big," focuses on long-term development, exchanging short-term interests for long-term market dominance, injecting continuous momentum into Sam's Club's development in the Chinese market. Fifth Rule: Sacrifice Small to Save Big: Precise Choices in the Single-Product Revolution Amid the volatile beverage market, Sam's Club decisively abandoned more than 30 homogeneous beverages. This decision seems risky but is actually based on keen insight into market trends and consumer needs. Sam's Club knows well that in the fiercely competitive beverage market, only by creating explosive products with differentiated competitive advantages can it stand out. Therefore, Sam's Club concentrated resources to create blockbuster products, with 10% of blockbuster products generating 50% of sales. At the Wuxi Huishan store, Member's Mark beef occupies 40% of the fresh food area. This resource tilt and focus reflect Sam's Club's determination and wisdom in "sacrificing small to save big." Through optimizing and streamlining the product structure, Sam's Club successfully created a series of highly recognizable and competitive blockbuster products, not only increasing sales but also strengthening its brand image in consumers' minds, enabling Sam's Club to occupy a favorable position in the market. Sixth Rule: When in Danger, Abandon: The Decisive Courage of Stop-Loss Decisions In 2024, Sam's Club decisively closed some city cloud warehouses, demonstrating the decisiveness and courage of a top chess player. When the fulfillment cost of cloud warehouses in certain regions exceeded gross profit, Sam's Club quickly made stop-loss decisions, reallocating resources to markets with greater potential and efficiency, such as Hefei. This timely stop-loss strategy avoided further waste of resources and saved Sam's Club significant costs. In efficient markets like Hefei, Sam's Club increased investment and layout, optimized resource allocation, and subsequently saw single-warehouse daily orders exceed 2,000, verifying the strategic value of "when in danger, abandon." Through this flexible decision-making mechanism, Sam's Club ensures that its resources are always efficiently utilized, avoiding ineffective competition and loss traps, providing strong support for its sustainable development. Seventh Rule: Be Cautious Not to Move Lightly: The Craftsmanship Philosophy of Product Polishing Sam's Club's pursuit of product quality is extreme. The author learned that developing a private brand cake at Sam's Club requires 18 months of repeated testing and polishing. In the cake-making process, Sam's Club strives for perfection in raw material selection, formula adjustment, and process control, from precise control of animal cream content to delicate texture adjustment, leaving no detail unattended. Take Sam's Club's popular Swiss roll as an example: the animal cream content in the Swiss roll is precise to 0.1%. This persistent pursuit of quality not only reflects Sam's Club's respect and responsibility to consumers but also highlights its ultimate pursuit of product quality. Its 99.7% quality inspection pass rate and 0.3% ultimate elimination rate create a highly trusted shopping environment where members can "buy with eyes closed." Sam's Club's insistence on "slowness" is like the craftsmanship spirit of Tang Dynasty "chess attendants" who spent three years polishing a single manual. Sam's Club knows well that in the retail market, quality products are the key to winning consumer trust, and this trust is the cornerstone of its long-term development. Eighth Rule: Move in Response: Supply Chain Synergy and Resonance Sam's Club's supply chain management is a model for the industry. Take the previous "durian thousand-layer cake" battle as an example: Sam's Club used cross-border cold chain technology to directly transport Southeast Asian durians to China, while cooperating with local dairy companies to develop a low-sugar cream formula, preserving Southeast Asian flavor while meeting Chinese consumers' health needs. This dual-track strategy of "global selection + local improvement" extends the life cycle of blockbuster products by more than 30%. Take the Zhangjiagang store in the county market as another example: its Australian chilled beef goes from pasture to counter in just 72 hours. From strict selection and procurement at Australian pastures, to temperature-controlled preservation during transportation, to reasonable warehouse management and timely shelf placement at stores, every link is closely connected, ensuring the freshness and quality of the beef. Behind this series of efficient operations is Sam's Club's precisely calibrated "three-warehouse linkage" model. The national network of 30 central warehouses, 500 front warehouses, and 2,000 cloud warehouses forms a three-tier network, achieving dynamic inventory balance and close coordination through intelligent algorithms. As Zhang Ni of the Northern Song Dynasty said in the "Classic of Go": "Spacious but not too sparse, dense but not too crowded." This "move in response" supply chain management philosophy enables Sam's Club to remain calm and composed amid market fluctuations, continuously providing consumers with high-quality products and services, effectively enhancing its market competitiveness. Ninth Rule: When the Enemy Is Strong, Protect Yourself: Differentiated Breakthrough Amid Giant Squeeze Facing Costco's unique combination of "gas station + store," Sam's Club did not blindly engage in head-on confrontation but launched a "car service center" pilot in Jiangsu, cleverly avoiding its edge and directly targeting its service shortcomings. This differentiation strategy not only won market attention for Sam's Club but also provided its members with a brand-new value-added service experience. In Shanghai, where membership penetration is saturated, Sam's Club took another path, deeply cultivating "Executive Membership" and further mining member value by increasing ARPU. Sam's Club knows well that in a market full of giants, only through continuous innovation and differentiated development can it survive and thrive in the cracks. This "when the enemy is strong, protect yourself" strategy enables Sam's Club to find its own development path in fierce market competition and solidify its market position. Tenth Rule: When Isolated, Seek Harmony: Flexible Strategies in Regional Markets In response to the significant consumption differences between southern and northern Jiangsu, Sam's Club implements differentiated product selection strategies in Jiangsu. In the Suzhou-Wuxi-Changzhou area, leveraging its strong consumption power and pursuit of high-quality life, Sam's Club mainly promotes high-end products like imported steaks; while in the Xuzhou warehouse, considering local consumption habits and market demand, Sam's Club increases the proportion of prepared dishes. This flexible tactic of "when isolated, seek harmony" is like the adaptive wisdom in Fan Xiping's "Peach Blossom Spring Chess Manual" from the Qing Dynasty, enabling Sam's Club to precisely meet consumer needs in different regional markets, thereby achieving industry-leading regional penetration. Sam's Club's successful practice in the Jiangsu market fully proves the effectiveness of its market strategy of adapting to local conditions and responding flexibly. This deep insight into regional markets and precise operations enables Sam's Club to achieve optimal resource allocation and efficient market expansion nationwide. In Conclusion Costco has deployed six stores in East China, and RT-Mart's M Membership Store is accelerating expansion... While competitors are obsessed with SKU quantity battles, Sam's Club has already leaped into a new dimension with front warehouses; when county markets were judged as poor mines, Sam's Club's first-month penetration in Zhangjiagang has caught up with Shanghai. The Ten Rules of Go, after thousands of years of sedimentation, have been reborn on the retail battlefield. Sam's Club integrates this Eastern wisdom that transcends victory and defeat into its business philosophy. While providing members with high-quality products and services, it continuously explores and innovates, skillfully placing moves in the Chinese market and advancing step by step. Indeed, the outcome of a chess game is not determined in one time or place, and this retail chess game is far from over. Which "rule" of Sam's Club impressed you the most? Welcome to share your thoughts in the comments section. 🔺Scan code for ticket consultation🔺