After Costco’s first store in China was overrun by crazed shoppers on opening day, it was clearly not taking chances again.
Last week, the American bulk retailer opened an outlet in Shanghai, its first in China.
But the staff was quickly overwhelmed by a frenzy of shoppers who came and tussled over the deals. On social media, people were seen tugging at cuts of pork and pushing each other to get to household items.
It was so chaotic that local police forced the store to shut down early that day.
When we visited on day three, crowd control measures had already been put in place. A long snaking line had formed outside the store by around 9:30 am.
We were held in the holding line for about two hours before being let in. Security guards said they were only allowing about 100 shoppers into the store every hour.
Outside, people stood restlessly in line, with occasional arguments breaking out. Some were accused of pushing, others for cutting the line.
Eventually, we made it inside—and it was surreal. Here was a massive Costco without much of a crowd inside.
The staff appeared on high alert. A plainclothes security guard stopped us from filming within five minutes of us stepping inside.
Typical of most Costco outlets, the goods inside were generally supersized, bulk versions of what you’d get in a supermarket.
A pack of 48 AA batteries was going for 78 yuan (about $10). Rows of USDA Prime cut yakiniku beef sat in a fridge for 172 yuan ($24) per pound.
A pair of Levi’s jeans was 379 yuan ($52), and a large screen-door house (for anyone who needed one) was available for 15,699 yuan (about $2,000).
But Costco itself isn’t new to Chinese consumers. Its products have been available since 2014, when the retailer opened an online store on Alibaba’s popular Tmall e-commerce app. (Goldthread is part of the South China Morning Post, which is owned by Alibaba.)
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On Costco’s Tmall store, Chinese shoppers can already buy vitamin supplements, wine, and bulk goods from the retailer’s in-house brand Kirkland.
So some of the frenzy at Costco’s brick-and-mortar store was not sparked by these products, but by promotions of luxury items, such as Chanel and Louis Vuitton handbags. Many of them were going for several hundred dollars cheaper than usual.
Social media posts also showed Hermès Birkin bags and expensive Moutai liquor on display on day one, but when we visited on day three, they were conspicuously missing.
It’s unlikely that the European retailers listed their goods directly on Costco. It’s more possible that the items ended up on sale through a gray-market reseller bringing the bags to the company.
(Read more: Chinese shoppers trade punches and strip mannequins for limited-edition Uniqlo shirts)
This is not the first time Costco has been able to sell luxury goods through such an arrangement.
In an 11-year legal battle with Omega, the company sued Costco for selling its watches at a deeper discount than market price.
Eventually, a U.S. court ruled in favor of Costco and allowed it to continue the practice.
Globally, 539 of Costco’s 776 outlets are in the United States. In Asia, it has multiple outlets in Japan, South Korea, and Taiwan.
