Need a Year's Supply of Soy Sauce? It'll Cost You

Sam's Club arrived in Shanghai a couple of weeks ago. It's the US retailer's fifth store in China--30,000 square meters of bulk-everything. My wife and I thought it'd be fun to check it out. (Yes, fun--picture Will Ferrell's character in the movie 'Old School,' explaining what his Saturday will look like to a group of frat boys: "We're going to Home Depot, buy some wallpaper, maybe get some flooring, stuff like that. Maybe Bed, Bath and Beyond, I don't know. I don't know if we'll have enough time.")

We were wrong. Instead of scoring a great deal on a metric tonne of jasmine rice, we were sticker shocked within a minute of arriving. You see, Sam's Club's American business strategy has done a 180 for the China market.

My wife first noticed this while looking at some eye make-up remover she usually buys in the states. Her mouth was agape: "This costs three times as much as it does back home!"

The taxi driver who brought us there was curious about the place, so he agreed to come in and browse, waiting for us to hire him for our return trip home. When we were back in the car, he couldn't contain his outrage: "They're charging double what I paid for my shoes! There's no way Chinese people will shop here!"

That's not what He Wenying thinks. He's the manager for Wal-mart China, which runs the store. He told the Global Times the retailer is after middle-to-upper class Chinese. It's a formula used by many US companies when they come to China.

Visit Pizza Hut in Shanghai, and a family-style fast-food experience is transformed into an intimate evening of fine dining. Same goes for many other fast-food chains. By the looks of it on Saturday, though, this formula wasn't working so well. Very few people were perusing Sam's rows of imported bulk food, big screen televisions, and overpriced Spam (two words I never thought I'd utter, but as a Minnesotan, I had to plug a home product).

As my taxi driver quipped, "Nothing scares away Chinese customers like the absence of other customers."

About the author

Rob Schmitz is Marketplace’s China correspondent in Shanghai.

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