Costco hooks China's middle class with Alibaba experiment

Retail watcher Michael Zakkour believes Costco's first day in China was a huge win for the wholesaler.

Continue Reading Below

“They've tapped into what we all love here -- a rising middle class that loves a good bargain,” he told Stuart Varney on Wednesday. “And the membership card gives them a feeling of exclusivity.”

The wholesaler opened its first store China on Tuesday but reportedly closed early after massive crowds poured into the members-only warehouse.

However, Costco began building a foundation in China for the better part of five years, first online and now integrating a flagship store and cross-border site, Zakkour said.

It began in 2015 on Singles Day, a popular e-commerce shopping event created by Alibaba.

“They experimented and did something incredible -- they sold 7,000 tons of U.S.-grown cherries in 24 hours,” he said.

CLICK HERE TO GET THE FOX BUSINESS APP

Two years later, he said, Costco launched a small global cross-border store to send U.S. products to China and also opened a flagship store.

“So there's a built-up demand and absolutely the opposite of hostility. Chinese consumers love American products. They can't get enough of them,” he said.