Hema built a Costco challenger in China's hottest retail fight — it closed all ten stores

In October 2020, Alibaba's Freshippo opened its first Hema X membership store in Shanghai — a warehouse-format, paid-membership chain built to fight Sam's Club and Costco on their own ground, in the one market where both were expanding fast. By October 2023 there were ten Hema X stores across China's biggest cities, and the format was the centerpiece of Freshippo's growth story.

The format never found its footing. Against Sam's Club, Hema X could not match the global supply chain and local procurement that made Sam's treasures worth the membership fee; against Costco, it faced an assortment that leaned toward an American lifestyle Chinese shoppers did not fully want. Its own product differentiation and in-store experience, the company later admitted, were weak — and its delivery machinery, Freshippo's old advantage, did not transfer to the bulk-buy format. The stores never validated a mature model.

The retreat was total: Beijing, Suzhou and Nanjing stores closed in late July 2025; the last one, Shanghai Senlan, shut on 31 August 2025. Freshippo redirected the money toward what it does better — the core Freshippo stores and Hema NB, a hard-discount community format targeted at 300 stores in fiscal 2025. The case is not that membership retail fails in China — Sam's Club and Costco prove otherwise — it is that a membership store needs a reason to exist that is not 'the incumbent, but local'.