top of page

Sam’s Club’s Trust Crisis in China: When Premium Promise Meets Mass Expectations

Sam’s Club has been one of the rare success stories in China’s retail sector in recent years. Despite economic headwinds, the membership-based retailer has posted impressive growth. Public data show that in 2025, Sam’s Club operates 56 clubs in China, serving nearly 9 million paid members (membership fees of 260 RMB or 680 RMB annually). In 2024, its revenue crossed 1,000 billion RMB, making it the first foreign-retail enterprise in China to reach that scale. That revenue accounts for roughly two-thirds of Walmart China’s total performance.


sam's club
Sam’s Club storefront in Shanghai (Source: Reuters)

But recently, Sam’s faced a serious trust crisis. Known as a “club for China’s middle class,” the retailer sparked controversy by introducing more mass-market domestic snack brands - products that consumers noted were already widely available in regular supermarkets or even roadside convenience stores. Many members accused Sam’s of removing beloved, higher-quality items and replacing them with cheaper domestic alternatives as a cost-cutting measure. The backlash was not just about product choice, but about perceived value: “Why pay hundreds in membership fees to buy what I can get at the corner store?”

 

Rumors added fuel to the fire. Some consumers speculated that this shift was tied to management changes, linking the stocking of local brands to the retirement of Sam’s foreign executives and the appointment of Chinese leadership. On social media, critics went further, accusing the new team of prioritizing cost efficiency at the expense of member trust, or even hinting at possible conflicts of interest in supplier relationships. While unverified, these narratives quickly spread, intensifying skepticism about the brand’s direction.

 

sam's club
A Xiaohongshu post accusing the new Chinese management team (Source: Xiaohongshu)

 

A Typical Brand Tension in China: Growth vs. Identity

 

This situation is quite illustrative of a dilemma many foreign / premium brands in China face:

 

● Upward then Downward Pressure: At early stages, brands like Sam’s Club position themselves as high-end, curated, differentiated. But as they scale and try to optimize costs or localize supply chains, there is natural pressure to include more mass-market/local brands or reduce SKU complexity. This can blur brand positioning and upset existing, loyal consumers who bought in for differentiation.

 

● Quality / Safety Reputation Is a Key Advantage: For many foreign brands and retailers, part of the value promise has always been “quality you can trust” - safer ingredients, trusted imports or vetted domestic supply, more rigorous sourcing, etc. When product selection becomes more “like any supermarket”, that advantage erodes. Consumers begin asking: Why should I pay membership fees for what I can get cheaper elsewhere?

 

● Disproportionate Attention for Foreign Brands: Compared with domestic competitors, international brands often face heightened scrutiny, where even minor missteps can quickly escalate into public controversies. This “magnifying glass effect” means foreign players must operate with extra vigilance, ensuring product strategies, communications, and crisis management are handled with precision. For Sam’s, the recent backlash underscores how quickly trust can erode when brand identity and consumer expectations fall out of sync.

 


What Sam’s Club Has Said & What It Reflects

 

Sam’s Club / Walmart China has responded, publicly acknowledging the feedback on social media and promising to adjust product selection strategy. They emphasized they “select and develop high-quality products from both domestic and international suppliers” and value member feedback. Some contested products have been removed or marked “out of stock,” which the company says is due to packaging/labeling issues in some cases.



Implications & Lessons for Brands in China

 

For both foreign luxury/premium brands and retailers, this episode offers several lessons:

 

● Guarding Brand Positioning: Foreign brands must strike a delicate balance between localizing for growth and preserving their premium positioning. Diluting this identity risks alienating the very consumers who were initially drawn to them.

 

● Leveraging Natural Advantages: Foreign food and retail brands often benefit from perceptions of superior quality, safety, and reliability. Rather than engaging in price-driven competition with domestic players, they should lean into this narrative to differentiate themselves.

 

● Preparing for Heightened Scrutiny: With foreign brands under a magnifying glass, small product decisions or assortment shifts can trigger outsized consumer reactions. This makes proactive communication, transparent reasoning, and robust public relations capabilities essential.

 

● Crisis Management as a Core Competency: Developing stronger local teams that can anticipate, detect, and swiftly respond to public concerns is not optional, but a prerequisite for long-term success in China’s hyper-connected consumer environment.

 

Conclusion

 

Sam’s recent experience illustrates the tightrope that foreign brands walk in China: balancing growth ambitions with brand integrity while operating under intensified public scrutiny. In a market where consumer trust is hard-won but easily lost, global retailers cannot afford to treat localization as a simple cost-cutting exercise. Instead, they must embrace a dual strategy - protecting their core identity while building the capabilities to communicate transparently and manage crises effectively. For foreign brands in China, the lesson is clear: success is not only about scale, but also about resilience in the face of amplified expectations.

 

 

Double V Consulting is a marketing consultancy specialized in female consumer goods brands. We have been helping overseas brands navigate the complexities of the Chinese market since 2017. We specialize in creating strategies that resonate with Chinese female consumers, leveraging deep market insights and cultural understanding.

 

If you're interested in learning more about how we can assist your brand in understanding and connecting with Chinese consumers, don't hesitate to reach out by clicking HERE.

 

Comments


bottom of page