---
title: "Sam's Club's County-Level Store Openings: A Feint in the Low-Tier Market"
description: "Sam's Club's strategy for entering county-level cities is a low-cost expansion based on urban integration and regional economic integration, aiming to capture the spillover effects from surrounding high-consuming cities. After opening its second county-level store in Jinjiang, Fujian, discussions about Sam's Club's layout in the low-tier market have been rife. The author believes that Sam's Club's current pace of store openings, on the surface, shows a covetous eye on the county-level market, but in reality, it is 'not about the wine'—what it truly values is the 'spillover effect' of the surrounding large cities that the county towns carry. In other words, county towns cannot satisfy Sam's Club's 'appetite', and their consumption preferences do not need Sam's Club to carry the banner. Overall, Sam's Club's layout in the low-tier market is just a feint; its operational focus remains on first-tier cities, and it is continuously moving closer to city centers."
author: "徐龙捷"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2024-06-22"
language: "en"
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original_source: "https://mp.weixin.qq.com/s/Bo-fVcY6ArZeDSbgP2KOMw"
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---

# Sam's Club's County-Level Store Openings: A Feint in the Low-Tier Market

> Sam's Club's strategy for entering county-level cities is a low-cost expansion based on urban integration and regional economic integration, aiming to capture the spillover effects from surrounding high-consuming cities. After opening its second county-level store in Jinjiang, Fujian, discussions about Sam's Club's layout in the low-tier market have been rife. The author believes that Sam's Club's current pace of store openings, on the surface, shows a covetous eye on the county-level market, but in reality, it is 'not about the wine'—what it truly values is the 'spillover effect' of the surrounding large cities that the county towns carry. In other words, county towns cannot satisfy Sam's Club's 'appetite', and their consumption preferences do not need Sam's Club to carry the banner. Overall, Sam's Club's layout in the low-tier market is just a feint; its operational focus remains on first-tier cities, and it is continuously moving closer to city centers.

Sam's Club's strategy for entering county-level cities is a low-cost expansion based on urban integration and regional economic integration, aiming to capture the spillover effects from surrounding high-consuming cities.
After opening its second county-level store in Jinjiang, Fujian, discussions about Sam's Club's layout in the low-tier market have been rife.
The author believes that Sam's Club's current pace of store openings, **on the surface, shows a covetous eye on the county-level market, but in reality, it is 'not about the wine'—what it truly values is the 'spillover effect' of the surrounding large cities that the county towns carry.**
In other words, county towns cannot satisfy Sam's Club's 'appetite', and their consumption preferences do not need Sam's Club to carry the banner. Overall, Sam's Club's layout in the low-tier market is just a feint; its operational focus remains on first-tier cities, and it is continuously moving closer to city centers.
**Behind the 'Pseudo-Downward' Strategy**
At this stage, Sam's Club's strategy for entering county-level cities is a low-cost expansion based on urban integration and regional economic integration, aiming to capture the spillover effects from surrounding high-consuming cities.
Therefore, even if the city is only a 'county-level city', it cannot be simply equated with the low-tier market, nor can the top 100 counties in China be viewed as a unified whole.
For example, among the top 100 counties, there are areas with strong economic strength but sparse populations, which are unlikely to attract Sam's Club unless there is a 'giant' nearby.
Image source: Sam's Club APP
Take the upcoming second county-level Sam's Club as an example. According to population data released by the Fujian Statistics Bureau, Quanzhou's permanent population is 8.883 million, ranking first in Fujian Province, while Fuzhou has 8.469 million and Xiamen 5.327 million during the same period. Quanzhou is the third economically strong city in Fujian, with a first-quarter economic growth rate of 7.2% this year, ranking first among trillion-yuan cities. The rapid economic development of Quanzhou has also given rise to the demand for high-end retail formats in this area.
Due to the rapid economic development of the southeastern coastal provinces, the trend of regional economic integration has intensified, and the integration of large cities with surrounding cities has become increasingly evident, with physical boundaries between cities gradually blurring.
Based on this, Sam's Club's choice to enter this area not only allows it to radiate to two cities simultaneously but also gives it a cost advantage in operations.
The site selection for the Kunshan store follows a similar logic. Kunshan is adjacent to Shanghai and Suzhou, and it can reach both cities directly by metro. Sam's Club can influence consumers in both places while enjoying significantly lower operating costs than in Shanghai or Suzhou.
**Rather than saying Sam's Club chose Kunshan, it is more accurate to say Sam's Club chose Suzhou and Shanghai.**
As of June 13, Sam's Club APP data shows that there are 6 stores in Shanghai, 3 in Suzhou, and 1 each in Nantong, Wuxi, and Changzhou, totaling 12 stores. If we include the planned stores in Jiaxing, Zhangjiagang, Wuxi, and a new Shanghai store, the number of Sam's Club stores in the Yangtze River Delta region will reach 16.
Image source: Sam's Club APP
Sam's Club has a dense layout in the Yangtze River Delta, but only 7 stores in the northern region, including 4 in Beijing and 1 each in Tianjin, Dalian, and Shenyang. Many provincial capitals still lack a single store.
Under such circumstances, the industry's argument that 'Sam's Club is forced to enter the low-tier market due to competitive pressure' is hard to support. If county-level cities with stores are considered low-tier markets, how should we position the provincial capitals that still have no stores?
It is clear that Sam's Club has not yet torn off the label of 'middle-class paradise' and has not truly entered the so-called 'low-tier market' as currently understood.
**Moving Toward the Center**
From Sam's Club's current actions, it not only has no intention of deeply cultivating the low-tier market but is also accelerating its expansion in first-tier and strong second-tier cities.
In May 2023, Sam's Club opened its fifth store in Shanghai, located in the Putuo Zhenru sub-center, which is the closest Sam's Club store to the city center. Additionally, by the end of 2025, Sam's Club will open its third store in Pudong New Area.
Image source: Sam's Club APP
Sam's Club continues to firmly root itself in first-tier cities and accelerate expansion toward central cities. In addition to opening stores, Sam's Club also reaches core cities through online channels first.
In recent years, **Sam's Club stores in Shenzhen have been long occupied by Hong Kong consumers, even giving rise to professional 'Shenzhen Sam's Club purchasing agents' in Hong Kong.**
Seeing the business opportunity, Sam's Club officially launched cross-border direct mail to Hong Kong on June 7, allowing Hong Kong consumers to order through the Sam's Club APP without traveling north to Shenzhen.
Sam's Club's influence on Hong Kong consumers is becoming increasingly evident.
Image source: Internet
It is foreseeable that, according to Sam's Club's current store-opening strategy, based on the high degree of integration between Shenzhen and Hong Kong, Sam's Club does not need to open stores in Hong Kong, where costs are higher. Instead, by continuing to open stores in Shenzhen, it can meet the consumption needs of both Shenzhen and Hong Kong, two mega-cities.
In 2023, Sam's Club's membership in China grew by 25%, and the continuous growth of Sam's Club store performance has effectively driven Walmart's performance in China. Walmart CEO Doug McMillon stated that in 2024, the Chinese market will be the main focus for store openings.
Looking at future store-opening plans, Sam's Club is clearly accelerating its pace and will further enhance its format influence in the domestic retail market.
In May, the first Sam's Club stores in Shandong and Henan provinces will be located in Qingdao and Zhengzhou, respectively; in June, the first Sam's Club in the northwest region broke ground in Xi'an. At the same time, 'strong second-tier' cities such as Foshan, Shunde, Wenzhou, and Shaoxing will also welcome their first Sam's Club stores. It is expected that by the end of this year, Sam's Club will add at least 10 new stores.
From an industry perspective, in terms of store scale, Sam's Club currently has 47 stores in China, while Costco has 7 in the mainland, Hema X Membership Stores have 9, and M Membership Stores have 3 (the fourth will open in Changshu in July), all with significant gaps. In terms of coverage, Sam's Club has formed a large-scale business ecosystem with a foothold in key provinces and coverage of core cities, while the others are more focused on Shanghai, radiating to the Yangtze River Delta, and entering super cities like Beijing and Shenzhen.
**To some extent, the gap in stores reflects the gap in strength.**
Sam's Club has started a rapid expansion model, exploring the northern market to increase brand influence and build an ecological niche; at the same time, it uses its strong brand value to enter strong second-tier cities, trying to quickly capture markets without competitors.
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