AsianFin — Alibaba Group’s grocery chain Freshhippo will close its last X Membership Store in Shanghai on August 31, marking the complete exit from a business once touted as its “second growth curve” and a direct challenge to Costco’s warehouse club model.

The closure ends Freshhippo’s four-year experiment with the membership store format, which the company launched in October 2020 with its first X Membership Store in Shanghai. The initiative aimed to replicate Costco’s high-volume, low-margin formula, targeting China’s rising middle class with bulk purchases and exclusive product offerings.

After expanding into Beijing in June 2021, Freshhippo accelerated its rollout, opening four additional membership stores between December 8, 2021, and January 14, 2022. By October 2023, the chain had established 10 X Membership Stores across key cities including Shanghai, Beijing, Nanjing, and Suzhou.