As Sam's Club pilot e-commerce business lands in Hong Kong, the traditional supermarket industry in Hong Kong is facing unprecedented challenges. The huge attraction of Sam's Club stores in Shenzhen has already led many Hong Kong residents to choose shopping in the north, a phenomenon that has gradually become a significant socio-economic activity.

The Sam's Club store in Shenzhen is always bustling with people, including Hong Kongers dressed for backpacking and casual sports. They bring their families and friends, enjoying the pleasure of shopping, and recommend and share their favorite products. Especially on May 20, 2022, the store once again saw a large number of Hong Kong customers purchasing items.

In fact, over the past two years, more and more Hong Kong residents have chosen to consume in places like Shenzhen. According to statistics from last October, the total consumption of Hong Kong residents in Shenzhen reached an astonishing 3.6 billion RMB, making Shenzhen almost their shopping paradise. During this year's Labor Day holiday, the phenomenon of Hong Kong people going north to shop has once again drawn social attention. Data indicates that on May 1, the number of Hong Kong residents leaving the territory increased by 56% year-over-year. Additionally, a report released by Meituan pointed out that in the first quarter of 2023, consumption transaction volumes of Hong Kong users in Mainland China increased by 135% quarter-over-quarter, with Shenzhen being the most popular destination.

Sam's Club is not only popular among Hong Kong residents but also serves as a shopping attraction, drawing tour groups and even direct bus routes to the store. Recently, Sam's has announced a significant market strategy for Hong Kong customers - launching online services in Hong Kong, which is currently in the beta testing phase, with some local customers successfully ordering Sam's products online. It is understood that the services for the Hong Kong site include direct mail to Hong Kong as well as pickup and home delivery options, with free delivery for purchases over 660 Hong Kong dollars.

In the face of such an enthusiastic market response, the local catering and supermarket industries in Hong Kong undoubtedly feel the pressure. Evidently, the frequent shopping trips of Hong Kong people to the north are not only due to the variety and price advantages of the products but also the overall appeal of the shopping experience. This change in consumption patterns is having a profound impact on the commercial landscape of local Hong Kong.

In a captivating video montage, a Hong Kong gourmet content creator shared the struggle of a former Michelin two-starred roast meat chef who started his own business, with viewers moved by the challenges and helplessness faced by the young shop owner from Hong Kong. The shop owner expressed his concerns in the video, noting that the trend of Hong Kong people consuming in the north has become popular, leading to a sharp decline in customer traffic for local businesses during holidays, by more than 30%. This shift not only poses a huge impact on small and medium-sized businesses but also represents a significant change in the Hong Kong market.

In particular, for Hong Kong's local supermarkets, this trend is especially worrying. In the past, Hong Kongers preferred shopping at familiar local supermarkets, but now they are willing to go north to Sam's Club in Shenzhen to purchase daily necessities and popular food items. Since these products are sold in large packages and at lower prices than in Hong Kong, this shift in consumer behavior has had an undeniable effect on the performance of local supermarkets in Hong Kong.

This phenomenon has forced Hong Kong's local supermarkets to adjust their strategies to cope with the competition. Well-known chain supermarkets like ParknShop and Wellcome have actively introduced popular products from Sam's Club, such as thousand-layer cakes and cheese beef rolls. They have also set up zones for trending products, hoping to attract consumers' attention. However, even with the same products, due to differences in costs and pricing, the prices at Hong Kong supermarkets are usually higher, which undoubtedly reduces their competitiveness.

When Sam's Club tested the waters of offering e-commerce services directly to Hong Kong, and considered launching immediate delivery services, the local supermarkets felt unprecedented pressure. Renowned economist Li Zhaobo even described this as "stabbing the retail market with an additional knife". This transformation not only means that businesses have to rethink their business models, but also reflects the broader challenges facing the retail market in Hong Kong.

Once known as a shopping paradise, Hong Kong attracted a large influx of mainland consumers, even spurring the boom of the purchasing agent industry. However, with the rise of shopping centers on the mainland and the increase in the variety of goods, coupled with more competitive prices, Hong Kong's attractiveness is not what it used to be. Improved convenience in transportation has made cross-border shopping simpler than ever. Today, it only takes half an hour's drive for residents of Hong Kong to reach major shopping centers on the mainland and enjoy the pleasure of shopping.

In such an economic context, Hong Kong needs not only Sam's Club, but its own "Sam's Club" - a retail model that can adapt to changes, meet local needs, and remain competitive in fierce competition.

Mainland shopping offers attractive prices and is now even more popular, as it not only offers cheaper prices but also a wider variety of goods in larger sizes. Even if it means pulling a portable shopping trolley or suitcase, many Hong Kong people are willing to make regular trips to the mainland to shop, as the cost-performance ratio of this consumption pattern is very high. Reflected in the business model, Hong Kong's "reverse purchasing agent" teams are quite profitable, reportedly earning up to 200,000 a month.

Beyond the attraction of prices and product variety, high-level services offered by mainland cities like Shenzhen are also highly praised, with many describing the service as "god-like" experience. This trend directly impacts the local retail brands in Hong Kong, with retailers like Sam's Club attracting a large number of Hong Kong consumers to travel north for shopping. At the same time, this phenomenon has also spurred the competitiveness of the local market in Hong Kong, injecting new vitality, prompting business model innovation, and urging local supermarkets to undergo necessary reforms.

In the face of the rapid development of mainland e-commerce and its transformative effect on traditional supermarkets, Hong Kong supermarket brands like ParknShop have also expanded in the mainland, attempting to improve service quality. Yet even so, compared to the mainland market, Hong Kong's supermarket business still appears traditional. In this wave of innovation and change, the mainland market is not short of new supermarket species, while traditional large supermarkets have to face a wave of closures.

The phenomenon of Hong Kong consumers buying a lot of goods from Sam's Club and traveling north to shop has sparked widespread discussion in mainland and local Hong Kong. On how to face this new trend, local supermarket operators inevitably began to seek change and innovation, trying to maintain market competitiveness. However, Hong Kong supermarkets are increasingly realizing the need to adapt to this pressure for change, and also need to recognize their unique regional advantages.

According to the "21st Century Economic Report," although Sam's has an advantage in certain goods such as catering, Hong Kong supermarkets also have their advantages in daily necessities in terms of variety and price -- frequent discount promotions and higher discount rates often attract customers' attention, indicating that Hong Kong supermarkets also have a market competitiveness that cannot be ignored.

Sam's intention to enter the Hong Kong e-commerce market also reflects its high expectations for the potential of the Hong Kong market. There are even rumors in the market that Sam's plans to open physical stores in Hong Kong. In the long run, not only does the Hong Kong market need supermarkets like Sam's, but the local retail industry should also strive to align with warehouse-style supermarkets like Sam's. As economist Li Zhaobo said, Hong Kong has the capability to operate such supermarkets but needs support from relevant real estate developers, as the retail industry alone cannot achieve this scale.