Sam's Club Muscles its Way into Hong Kong

Sam's Club will extend shopping and delivery to Hong Kong

Hong Kong retailers will have massive competition coming soon, as warehouse megastore Sam's Club, owned by Walmart, will begin offering online shopping and delivery services, with free delivery for purchases over 599 yuan (US$83).

"So far there has not been online shopping for Hong Kong people. There will be a roll-out of such service with direct delivery within two months. But customers need to be a member... and memberships can't be shared with others," an employee familiar with the matter said.

The membership offers a one-year membership for two people at 260 yuan, while a premium membership at 600 yuan offers more benefits.

HKers already shop in Shenzhen for deals

The news of this retail development had some industry observers describing it as "a retail crisis".

Many Hongkongers are going north on the weekends to shop at Costco and Sam's Club already, and the latter's new service will make it even more convenient to take advantage of really cheap goods, from toilet paper to snacks and electronic goods.

The first Sam's Club outlet in China opened in 1996 in Shenzhen, and today it was 44 shops in 25 cities across the country.

Economist Simon Lee Siu-po, an honorary fellow at the Chinese University of Hong Kong's Asia-Pacific Institute of Business believes Sam's Club's new service will be a severe blow to local supermarket chains and HKTVmall, an online shopping platform.

"Sam's Club's offering is bulk purchase with cheap deals. With online shopping and delivery for Hongkongers, they no longer need to stock up food or necessities in local stores," he said.

People buy snacks, toilet paper, electronic goods

"Supermarkets and online platform HKTVmall will be hard hit. Coupled with internal troubles, this will be an aggression from abroad. I am afraid this will cause a retail crisis in Hong Kong."

He believed the only way to protect the local retail industry is to impose a sales tax.

Indeed HKTVmall has already taken a big hit -- its net profit fell 78.65 percent to HK$45.3 million (US$5.8 million) last year from HK$212.2 million in 2022.

In March company vice-chairman Ricky Wong Wai-hay predicted a fall in local consumption amid weakened sentiment.

"In parallel with the influence from the external and global economic and political environment, we anticipate a decline in the local consumer market... growth as in the past will be unlikely," he said.

It's going to be a tough road ahead for Hong Kong retailers. Local residents just want the cheapest stuff they can get as their priority; supporting local businesses has gone out the window...