How can consumer brands respond to China's discount boom?

Sam's Club and Costco increased channel share to 2% in 2025.

Membership clubs, discount chains, and private-label products are gaining market share in China even as the broader fast-moving consumer goods sector struggles with falling prices, raising pressure on brands to differentiate or risk losing customers.

The value of urban consumer goods fell 1.3% year on year in the first quarter despite volume rising by the same rate, according to a June report by Bain & Company, Inc.

The gap reflects a trend that began in 2021, when shoppers shifted to cheaper brands, smaller pack sizes, discount-led promotions, and lower-cost retail channels, Bain said.

Membership clubs have emerged as some of the biggest beneficiaries. Sam's East, Inc. and Costco Wholesale Corporation increased their combined share of total channel value to 2% in 2025 from 1.3% in 2023. Sam's Club operated 63 stores in China as of 2025.

Discount chains are growing even faster from a smaller base. HotMaxx, a discount retailer owned by Shanghai Xinguo Technology Co. Ltd., expanded its channel share to 0.4% in 2025 from 0.1% two years earlier. The company operates about 900 stores.

Private-label products are helping drive growth across both formats. Bain said store brands accounted for about 38% of Sam's Club sales and 41% of Costco sales in 2025, showing that retailer-owned brands have become a core sales driver.

That trend is spreading beyond China. Nielsen Consumer LLC said in an August report that private labels are no longer viewed solely as low-cost alternatives and are increasingly competing with established brands on quality.

About 58% of consumers globally said they do not care whether a product carries a national or store brand as long as it meets their needs, Nielsen found. Among Gen Z shoppers, the figure rose to 67%.

Questions to ponder:

• Can national brands justify premium pricing as consumers become more comfortable with private labels?
• Will membership clubs and discount chains continue gaining share as consumer spending remains cautious?
• How can consumer brand companies differentiate products that risk being squeezed between premium and value offerings?