<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/e8e4be0f-4fa4-4b56-823d-14dec33b2f88.jpeg?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/e8e4be0f-4fa4-4b56-823d-14dec33b2f88.jpeg"/> Author | Wang Xiaojun
Editor | Zhou Zhiyu
With annual sales surpassing 100 billion and store expansion in a &#34;frenzy,&#34; Sam's Club, which has been making rapid progress, has recently been thrust into the spotlight due to several seemingly ordinary &#34;mass-market&#34; products.
Without prior communication, Sam's quietly removed a batch of highly sought-after exclusive or private label products, such as sun cakes and rice puddings, and replaced them with widely available mass consumer brand products like &#34;low-sugar Holi Friend pies,&#34; Wei Long konjac snacks, and Liu Liu Mei.
This has led to topics such as &#34;Sam's product selection downgrade&#34; trending recently. Some consumers believe that this &#34;selection downgrade&#34; seriously deviates from the original intention of the membership store's &#34;strict selection&#34; and significantly undermines the value of its high membership fees.
Soon, Sam's removed these products and stated that consumer feedback would be incorporated into future product selection strategies.
What seemed like a routine product rotation quickly evolved into a public trust crisis because it directly touched upon the fundamentals of Sam's business model. Chinese consumers pay an annual fee not only for shopping privileges but also for an implicit contract of &#34;scarcity&#34; and &#34;high quality.&#34; When Sam's shelves increasingly resemble those of ordinary supermarkets, the risk of this contract being torn apart arises.
Behind the turmoil is also an inevitable challenge faced by Sam's on its path of rapid expansion. To support the swift rollout of its store network and sustained performance growth, must the procurement strategy compromise towards a broader range of faster-moving mass-market products? The contradiction between scale and brand uniqueness has been clearly brought to the forefront by this incident.
In the context of Costco's relentless pressure and local competitors like Hema eyeing the market, any action that undermines the foundation of member trust could be fatal. Sam's has indeed reached a crossroads.
<h2>A &#34;devalued&#34; membership card</h2>
This turmoil began with Sam's recent shelf adjustments.
Many consumers noticed that Sam's quietly removed high-repurchase-rate products like sun cakes, rice puddings, and low-sugar egg yolk pastries, which were only sold by Sam's, replacing them with mass brand products like low-sugar Holi Friend pies, Liu Liu Mei, Wei Long spicy strips, and Xu Fu Ji oatmeal quinoa cakes.
The &#34;low-sugar Holi Friend pie&#34; has particularly sparked controversy among consumers. Sam's claimed that this product &#34;reduces sugar by 80%&#34; and &#34;increases cocoa content by 30%,&#34; but consumer experiences have been vastly different.
Within a month of its launch, the product review section quickly accumulated over 300 negative reviews. &#34;I bought it because it said low sugar, but it actually tastes too sweet,&#34; one member commented on the product page. More discerning consumers pointed out that the ingredient list included &#34;shortening&#34; (which contains trans fatty acids) and &#34;aspartame&#34; (an artificial sweetener).
The greater dissatisfaction stems from a trust crisis surrounding the brand itself. Sam's was previously known for its strict product selection, but Holi Friend was embroiled in a &#34;double standard in ingredient lists&#34; controversy in 2022. Although the official clarification stated that the global formula was consistent, the brand's image has been severely damaged
Behind the controversy is a complete collapse in members' perception of membership value. Consumers pay an annual fee of 260 yuan (680 yuan for premium members) not only for shopping privileges but also for a sense of identity as a &#34;middle-class filter.&#34;
As the scarcity of Sam's products diminishes and homogenization intensifies, whether consumers are still willing to pay becomes a question Sam's must face.
A Sam's member from Changsha told Wall Street Insight that they usually go to Sam's to buy various meats when they want to barbecue at home, so the disputed products did not affect them much. However, thinking about the membership supermarket they paid to join, where the products are available right at their doorstep, the membership fee indeed seems not worth it, and they are still unsure whether to continue paying in the future.
In response to the doubts, Sam's explained that these are all &#34;special supply products,&#34; different from ordinary goods on the market. However, consumers do not buy this explanation.
&#34;I can't find 'Panpan' in the Sam's APP, but when I search for the English spelling 'PANPAN,' it shows up.&#34; A consumer shared on social media. The products on the shelves with trendy names like &#34;PANPAN&#34; and &#34;chacheer&#34; are actually popular brands like Anhui Panpan and Qiaqia sunflower seeds once the packaging is torn open. Moreover, some special supply products differ little from the ordinary versions.
The downgrade in product selection is accompanied by a reduction in member benefits.
Several premium members have reported on social media that the previously offered value-added services like car wash vouchers and dental cleaning vouchers have been canceled, leaving only the &#34;spend 2000 yuan to get 20 yuan back&#34; cashback activity. One member calculated: &#34;If the annual spending is 13,000 yuan, the 680 yuan premium membership fee is equivalent to an additional 'membership tax' of 5.2% on each purchase, while the points rebate from the membership itself is far from offsetting this cost.&#34;
Previously, Sam's had frequently faced criticism over quality control issues. On the Black Cat Complaints platform, there are over 10,000 complaints related to Sam's, many pointing to food quality issues.
When product selection is no longer scarce and quality is no longer guaranteed, consumers naturally need to reassess the value of Sam's membership.
<h2>The Billion-Dollar Journey of Sam's</h2>
Before this wave of controversy, Sam's had long been a representative of middle-class supermarkets.
The story of Sam's Club in China began in 1996. That year, Walmart opened a Walmart shopping mall and a Sam's Club simultaneously in Shenzhen, starting a dual-track exploration in the Chinese market.
The first 20 years were a long period of dormancy. By 2015, Sam's had only 12 stores nationwide, averaging 0.6 new stores per year, with membership numbers just surpassing 1.5 million. At that time, the paid membership system was still a foreign concept in the Chinese market, and consumers found it hard to understand the &#34;pay first, shop later&#34; model.
A turning point occurred in 2016 when Andrew Miles, the president overseeing Sam's China operations, made two key decisions: significantly raising the annual membership fee from 150 yuan to 260 yuan (a 73% increase) and accelerating store expansion.
&#34;The annual membership fee must be 260 yuan. If some members cannot accept this number, then they are not our target users,&#34; Miles stated frankly in an interview. &#34;We need to complete member screening through this upgrade.&#34;
Price increases bring growing pains, but the effects are significant. The number of members has not only remained stable but has increased, with the renewal rate stabilizing at over 80%, exceeding 2 million by 2019. During the same period, the speed of store expansion increased to an average of 3.5 new stores per year, nearly six times that of the previous 20 years.
2020 marked the starting point for Sam's &#34;surge.&#34; While traditional supermarkets faced a wave of closures, Sam's accelerated its expansion at a rate of 5-6 new stores per year. By July 2025, the number of stores had reached 56, with many more stores in the planning stages.
As Sam's offline stores expanded significantly, its e-commerce business also exploded. In 2016, Sam's joined the JD.com platform, and in 2018, it began establishing front warehouses, known as &#34;cloud warehouses,&#34; and launched the JD Daojia platform, offering &#34;same-hour delivery&#34; services.
By the end of 2024, Sam's operated over 500 cloud warehouses in 25 cities nationwide, with an average of about 10 front warehouses corresponding to each store. The proportion of e-commerce sales surged from 4% in 2019 to 48% in 2024, far exceeding the 10%-20% level of Sam's International.
Performance data depicts a steep growth curve, serving as a direct example of Sam's explosive growth in China over the years—sales reached approximately 66 billion yuan in 2022, exceeded 80 billion yuan in 2023, and broke through the 100 billion yuan mark in 2024, accounting for nearly two-thirds of Walmart's performance in China.
The number of members also surged, jumping from 3 million in 2020 to over 5 million today. Just from membership fees alone, Sam's China generates annual revenue exceeding 1.3 billion yuan.
The core secret to Sam's success in the Chinese market lies in its dual value system— the &#34;strict selection&#34; mechanism on the product side and &#34;identity recognition&#34; on the consumer side.
Pacific Securities pointed out in its research report that Sam's meets the demand of middle-class families for high quality and cost-effectiveness under differentiated innovation.
In terms of product strategy, Sam's adheres to the principle of &#34;broad SPU, narrow SKU.&#34; Unlike traditional supermarkets with tens of thousands of SKUs (stock-keeping units), Sam's stores offer only about 4,000 products, providing 1-3 choices per category. This extreme selection model effectively reduces consumers' decision-making costs.
The most attractive aspect for members is its private label, Member's Mark. In 2023, this series accounted for 25%-30% of all Sam's products but contributed about 40% of sales.
Additionally, for middle-class families, what they find at Sam's is not just products but also a sense of identity. The annual fee of 260 yuan has become an invisible class barrier, distinguishing members from ordinary consumers and representing a curated lifestyle.
Now, however, Sam's seems dissatisfied with its current profit levels and is beginning to explore ways to increase profit margins, while some middle-class members feel &#34;betrayed&#34; by Sam's product selections.
<h2>The Choices for the Middle Class Go Beyond Sam's</h2>
Sam's sense of crisis stems not only from the controversy over product selection but also from the increasingly fierce external competitive environment
In 2019, when Costco entered Shanghai, the scene of being forced to suspend operations on its first day due to overwhelming customer traffic marked the beginning of a new era for membership-based retail in China.
In the past few years, Costco has adopted a strategy of &#34;differentiated product selection + luxury goods attraction.&#34; The limited-edition Hermès bag priced at 100,000 yuan sparked a buying frenzy, while the prices of hard currencies like Moutai often fell more than 1,000 yuan below market prices, becoming a powerful tool to attract high-end members.
If Costco's stores in China are still not numerous enough, local competitors are launching even fiercer offensives.
Last year, the price war between Hema and Sam's Club over popular products is still fresh in memory. Moreover, from its inception, Hema has viewed Sam's Club as a benchmark, and its private label products have also been well received by users, with stores being more densely located. In the 2024 fiscal year, Hema achieved profitability for the entire year, with sales reaching 75 billion yuan, further narrowing the gap with Sam's Club.
An even more surprising challenger comes from fourth-tier cities. Pang Donglai has gained phenomenal popularity on short video platforms due to high salaries and exceptional service, becoming a model for many retail practitioners across the country. In Xuchang and Xinxiang, where it has only a dozen stores, Pang Donglai's sales reached 11.7 billion yuan in the first half of this year.
At the same time, through the &#34;Pang Reform&#34; model, Pang Donglai's self-operated products are entering all participating supermarkets, such as Yonghui and Wumart. Additionally, Pang Donglai does not charge a membership fee.
Interestingly, the changes in the purchasing agent ecosystem are even more alarming. Between 2021 and 2023, many Sam's purchasing agents lived a life of &#34;earning 5,000 yuan a day and 100,000 yuan a month&#34; thanks to exclusive products. However, as the number of exclusive products from Sam's Club decreased, the online presence of Sam's purchasing agents significantly diminished. Last year, before Pang Donglai implemented measures like purchase limits and real-name billing, it was the purchasing agents of Pang Donglai who were reaping substantial profits.
This outbreak of trust crisis also signifies that the billion-dollar Sam's Club is facing a new crossroads.
The crisis is essentially the result of an imbalance between scale expansion and quality assurance. Walmart China President and CEO Zhu Xiaojing has revealed that more than 60 Sam's Club membership stores are expected to open by the end of the year. In 2023, three stores have already surpassed annual sales of 500 million dollars (approximately 3.67 billion yuan), and this number is expected to increase to eight by 2025, with the number of &#34;super stores&#34; more than doubling within two years.
Behind the rapid expansion is the immense performance pressure on each new store, which may be one of the reasons for its procurement strategy shifting towards more mainstream products.
On the evening of July 15, facing a surge of public opinion, the Sam's Club mini-program quietly removed the controversial products. Searching for &#34;Haoliyou&#34; yielded no results, and Wei Long's konjac products also disappeared.
The shift from product selection adjustments to emergency withdrawals by Sam's Club serves as a metaphor. Membership remains Sam's most solid moat, and after testing market reactions, Sam's ultimately chose to bow to members' willingness to pay.
After all, the middle class will vote with their feet. When Sam's no longer has scarcity, and when the product quality and scarcity it once touted are no longer present, many competitors are waiting to capture the middle-class customers that may flow away from Sam's
For industries aimed at a broad consumer base, once trust is broken, the cost of rebuilding far exceeds hundreds of billions in revenue. If Sam's Club wants to maintain the moat accumulated over 29 years, the answer may not lie in the growth curve of financial reports, but in the lifeline of product selection and quality control.
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The market has risks, and investment requires caution. This article does not constitute personal investment advice and does not take into account the specific investment goals, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article align with their specific circumstances. Investment based on this is at one's own risk

Sam's Club quietly removed some exclusive products without notifying consumers, replacing them with mass-market brand products, raising consumer doubts about the quality of its selections. This change is seen as a challenge to member trust, as it deviates from the commitment to high quality and scarcity. Sam's Club stated that it will consider consumer feedback for future selections, facing a contradiction between expansion and brand uniqueness

- Sam's Club has faced a trust crisis after quietly removing popular exclusive products in favor of common brands, leading to accusations of "product selection downgrade."  
- This shift has raised concerns among consumers about the value of their membership, which is based on the promise of high-quality and scarce products.  
- As competition intensifies from rivals like Costco and local players, Sam's Club must navigate the balance between rapid expansion and maintaining product quality to retain customer trust.

"Backstab" for the middle class, Sam has already compromised