Alibaba’s Hema to Shutter All Membership Stores—What It Means for Wine Sales?

Hema (Freshippo), Alibaba’s supermarket chain, will shut down all of its paid membership stores by the end of August, ending its attempt to replicate the success of warehouse retail giants like Costco and Sam’s Club as it pivots back to core formats amid a protracted consumer slowdown.

The decision marks a major strategic retreat for the company, as it winds down its high-end Hema X Membership format to focus on its more mass-market Hema Fresh outlets and its discount-driven Hema NB chain.

Store closures began quietly in March 2024 across key cities including Beijing, Nanjing, Suzhou, and Shanghai. As of now, only one Hema X Membership location remains open—at Senlan Shopping Mall in Shanghai—but it is confirmed to close by August 31, 2025.

According to retail industry outlet Linkshop, inventory at the Senlan store has already been largely depleted, with only a handful of dry goods and ready-to-eat products remaining. The store has also been removed from the Hema Fresh mobile app. Notably, this outlet was the very first Hema X Membership store launched in 2020.

Conceived by Hema founder Hou Yi, the Hema X Membership concept was created to rival international giants like Costco and Sam’s Club. From its inception, Hou repeatedly cited Costco as a key reference point in interviews, envisioning the format as a warehouse-style retail model tailored for China’s emerging middle class.

Premium Ambitions Fall Flat

However, in the wine category, Hema X struggled to deliver on its premium positioning. Despite the shutdown of nearly all stores, wine commentators and influencers have continued to share reviews online. Some noted that wine prices at Hema X lacked competitiveness, and in several cases, identical wines were available at lower prices on Chinese e-commerce platforms.

According to a source familiar with Hema’s operations, the company aimed to distinguish its wine selection from Sam’s Club by focusing on mid-to-high-end wines that showcased regional character. But because Hema sourced through importers rather than direct procurement, multiple markups inflated prices. With limited store numbers, Hema X also failed to achieve the scale needed to negotiate more favourable purchasing terms. In a market increasingly defined by sluggish demand and excess inventory, some wines ended up being priced below cost, leaving Hema X little room to manoeuvre.

“By contrast, Sam’s Club uses direct sourcing and large-scale purchasing to offer better value. Wines priced at 60 to 70 yuan are everyday bestsellers, while 100 to 200 yuan bottles serve well for gifting or entertaining. That’s far more compelling in the Chinese market,” the source said.

Market Consolidation Favors Giants

As Costco and Sam’s Club successfully carved out a profitable model for warehouse-style retail in China, a wave of local players entered the fray. RT-Mart’s parent company, Sun Art Retail, introduced M Membership stores, while Wumei Technology Group transitioned Metro from a free to a paid membership format.

According to data from Huaon Industry Research Institute, China’s warehouse membership retail market has maintained a value above RMB 20 billion since 2012. In 2022, the market grew 10.1% year-on-year to RMB 33.5 billion and is projected to reach RMB 38.8 billion in 2024. Yet the space is becoming increasingly dominated by a few major players.

Sam’s Club, Metro, and Costco remain the most recognized membership retailers in China, with Hema X trailing behind. In the China Chain Store & Franchise Association’s 2024 Top 100 Supermarket Rankings, Metro had closed 23 stores, while Hema exited the membership business entirely. Today, only Sam’s Club and Costco continue to grow both store count and revenue.

By the end of 2024, Sam’s Club had over 50 stores in China, annual sales exceeding RMB 100 billion, and more than 5 million members. Membership fees alone contributed over RMB 1.3 billion in annual revenue, with its RMB 680/year “Plus” tier achieving a 92% renewal rate. Additionally, they contribute over 60% of total product sales.

By the end of 2024, Sam’s Club had over 50 stores in China, annual sales exceeding RMB 100 billion, and more than 5 million members. Membership fees alone contributed over RMB 1.3 billion in annual revenue, with its RMB 680/year “Plus” tier achieving a 92% renewal rate. Additionally, they contribute over 60% of total product sales.

Zhou Yuan, CEO of Georgian wine brand Ranina in China, said different Chinese supermarket chains serve different demographics across cities. Ranina distributes through Hema, Meituan, and other platforms.

“Sam’s targets younger, middle-class shoppers who do weekly grocery trips; Metro appeals more to older consumers; and Hema Fresh caters to frequent middle-class shoppers,” Zhou explained. “With clearly defined positioning, each retailer builds their own sourcing strategies, product selection, and team structure. Without rebuilding from the ground up, it’s extremely difficult to expand across formats.”

Strategic Refocus Gains Momentum

Hema appears to have acknowledged these limitations. Analysts note the company is now doubling down on its core formats—Hema Fresh and the discount-driven Hema NB—while cutting non-core operations like Hema X Membership.

The pivot has already resulted in greater internal resource allocation for Hema Fresh. Last year, Hema ramped up its direct-sourcing efforts in the wine category and launched its own private label, Hema Mingpin, featuring value-focused wines from well-known regions.

Among the highlights: a New Zealand Sauvignon Blanc for RMB 66, a Médoc Cru Bourgeois for RMB 128, and a Barossa Shiraz for RMB 119. These price points align more closely with Sam’s Club’s mainstream offerings—and importantly, they are sold through non-membership Hema Fresh stores.

The strategy appears to be paying off. In the 2024 CCFA supermarket rankings, Hema entered the top three for the first time with RMB 75 billion in sales—up 27.1% year-on-year. Its total store count rose to 420, a 16.7% increase, driven mainly by Hema Fresh and Hema NB. As of April 2024, Hema has also returned to profitability.

“This is a healthy development. It shows that Hema is finding its niche and shifting focus from market share battles to sustainable growth,” Zhou said. “When the market is overheated, companies go all-out to grab share and undercut rivals. But in slower economies, prudence is key. This isn’t a failure—it’s a sign of maturing strategy.”