U.S. retail giant Costco Wholesale Corp. is gearing up to open its first Chinese brick-and-mortar store in Shanghai in a move to expand beyond its online presence in the country.
After more than two years of discussions, Costco entered an investment agreement with state-owned Shanghai Pudong Kangqiao (Group) on May 8 to establish the headquarters of its Chinese business in Kangqiao, an area of suburban Shanghai, according to a statement that the Kangqiao Industrial Area Business Services Platform posted on its official WeChat account.
Costco is also opening a membership warehouse store in Shanghai with Shenzhen-based real estate company Galaxy Holding Group, the statement indicated.
The store will open in Shanghai's Minhang district in the spring of 2019, with plans to launch another location in the city's Pudong area in 2021, Chinese consumer products news portal Kuaxiaopin.net reported May 9, citing details given by Costco at its supplier conference. The company will send its purchasing team to Shanghai in June, the report added.
Galaxy Holding Group on May 14 confirmed to S&P Global Market Intelligence its venture with Costco to open a Shanghai store in 2019 but declined to give any other details. Costco China and Kangqiao (Group) could not be reached for comment.
Costco already has an online presence in China, which was established in 2014 via Alibaba Group Holding Ltd.'s Tmall Global cross-border e-commerce platform. In September 2017, the retailer launched a new flagship store on the consumer-facing Tmall.com website, which does not impose Chinese government restrictions on goods offered for sale. It sells a range of products across categories such as healthcare, food, apparel, personal care and digital appliances.
Costco's Asian presence as of March included 26 warehouse stores in Japan, 13 in Taiwan and 14 in South Korea.