China's discount boom squeezes premium brands as Sam's Club and Costco lift share to 2%

The value of urban consumer goods in China fell 1.3% year on year in the first quarter, even as purchase volumes climbed by the same margin, according to a June report by Bain & Company. That mismatch between what shoppers buy and what they pay has been building since 2021, the firm said.

Bain traces the shift to a set of trading-down behaviours: consumers moving to cheaper brands, choosing smaller pack sizes, responding to discount-led promotions and migrating toward lower-cost retail channels. The result is a fast-moving consumer goods sector where more units move but less money changes hands.

Membership clubs have been among the clearest beneficiaries. Sam's Club and Costco Wholesale Corporation lifted their combined share of total channel value to 2% in 2025, up from 1.3% in 2023. Sam's Club was operating 63 stores in China as of 2025.

Discount chains are expanding faster, albeit from a much smaller base. HotMaxx, the discount retailer owned by Shanghai Xinguo Technology Co. Ltd., grew its channel share to 0.4% in 2025 from 0.1% two years earlier, and runs roughly 900 stores.

Private-label products are also picking up share alongside the warehouse and discount formats. For premium brands, the common thread is pricing: with shoppers increasingly willing to trade down, those labels face pressure to justify their price points, differentiate their offer or risk losing customers.