Costco's Opening in China: American retailer's battling amid US-China trade war

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Huge crowds forced American wholesaler Costco to close its doors just five hours after opening its first physical store in China. Costco announced the closure through text messages to customers. So with such a dynamic first day, can Costco keep this "beginner's luck" alive, especially with most Chinese not used to buying items in bulk? CGTN's Wu Lei reports.

Costco wholesale's first physical store in China opened its doors at 8 am Tuesday in Shanghai's Minhang district.

Thousands of Chinese consumers lined up to enter this American membership warehouse retailer.

SHANGHAI RESIDENT "This supermarket is so big and many say the prices are very cheap, so I got a membership card."

There are an innumerable amount of products here, ranging from fruit to meat, from water to nuts.

WU LEI SHANGHAI "I just bought these two iconic Costco products. Interestingly, last week U.S. President Donald Trump asked enterprises to withdraw from the Chinese market. Now America's largest warehouse club retailer has finally opened its doors, after selling to Chinese customers online for the past 5 years."

Costco arrives at a time when some international retail giants including Amazon and Carrefour are retreating from the Chinese market, due to strong competition from local retailers.

The trade war escalated last Friday as President Donald Trump increased existing and planned tariffs on a total of 550 billion U.S. dollars in Chinese goods in response to new levies announced earlier that day by Beijing on 75 billion U.S. dollars worth of U.S. imports. Imports like meat, coffee and juice, are most affected, and everyday consumers of these will likely bear the burden.

SHANGHAI RESIDENT "This U.S.-China trade war indeed worries us, if the prices are getting higher, we may buy fewer American imported goods."

With the growing number of Chinese middle-class families, foreign supermarkets and retailers including Costco and Walmart are battling to win over China's high-end consumers. But experts say Costco faces a very different market in China, where most city dwellers prefer shopping more frequently and haven't embraced bulk-shopping habits.

SHANGHAI RESIDENT "If the service here is good, I will be willing to come here regardless of the prices."

As China says it always welcomes foreign companies and investors, but the fortunes of these overseas retailers in China will largely depend on their strategies in adapting to local consumer preferences. WL, CGTN, SH.