If you visit Harmony Times Square in Wuxi these days, you’ll spot two Aldi booths—one on the ground floor and another below—handing out free toothbrushes, bottled water, tissues, and soap to newly registered members. The giveaways are part of a promotional push ahead of the opening of Aldi’s first store in Wuxi, slated for later this month.
“Shanghai’s beloved bargain spot has finally arrived,” one bystander was noted quipping.
It has been six years since the German retailer opened its first store in China, but Aldi is finally venturing beyond its Shanghai base into Wuxi and Suzhou.
Slow as its expansion has been—by the end of 2024, Aldi operated just 65 stores, all located in Shanghai—it has nonetheless earned the respect of industry peers. Pangdonglai founder Yu Donglai once remarked that at Sam’s Club, Costco, and Aldi, “every product is high-quality, affordable and warm. That’s what a beautiful supermarket should be.”
So, what kind of supermarket is Aldi? The answers begin with its own branding.
The signage outside Aldi’s new Wuxi store reads like a manifesto—bold typography paired with rhetorical questions that spotlight what sets the store apart: the importance of low prices, the absence of membership fees, and its reliance on private-label products. Some of the messaging echoes Sam’s Club, while other parts read like a direct rebuttal.
Interestingly, Sam’s Club also leans on this question-driven format in its own stores, using it to explain decisions like its use of large-format packaging, limited SKU selection, and membership-based pricing—all displayed prominently as part of its in-store messaging.
Objectively speaking, Aldi is a very different beast from today’s retail darlings like Sam’s Club and Costco. Its stores are smaller, its product packaging and store locations more ordinary, and there’s no membership paywall. Yet, many Shanghai residents see a subtle synergy between them.
“If I’m stocking up in bulk, I go to Sam’s Club or Costco. But for everyday shopping, I always head to Aldi,” said Arya, a 40-year-old lifelong Shanghainese. For the past few years, this combination has met nearly all his shopping needs. “There’s an Aldi about 700 or 800 meters from my home.”
His first impression of Aldi was aesthetic. “The layout and visual design feel cleaner and more comfortable than most local supermarkets at the time,” he said. These days, he thinks of Aldi in terms of price. That’s also what Shanghai shoppers frequently emphasize on social media.
Arya used to buy milk from Bright Dairy and Food, particularly the “Ubest” and “Zhi You” lines. Both feature quality sterilization processes and a seven-day shelf life, typically priced between RMB 20–30 (USD 2.8–4.2). But then he discovered that Aldi’s private label milk with the same specs and quality was priced at just RMB 9.9 (USD 1.4)—and sometimes discounted to RMB 7.9 (USD 1.1). “Rationally speaking, the long-term savings are obvious.”
Like Sam’s Club, Aldi’s value-for-money proposition hinges on a streamlined SKU offering and tight control over its supply chain.
Each Aldi store stocks about 2,000 SKUs—fewer than the 5,000 at Sam’s Club—with private labels making up over 80% of the selection. This means customer demand for each product is concentrated, allowing for greater procurement scale and thus better prices. Aldi also sources directly from more than 400 suppliers across the Yangtze and Pearl River Deltas, with procurement hubs and production lines in provinces like Jiangsu and Zhejiang.
Arya can name many more “great deals” he’s found at Aldi: RMB 9.9 white liquor, a RMB 99 (USD 13.9) Moutai-style baijiu, and Aldi’s own senbei and rice crackers that are bigger and cheaper than Want Want’s versions.
But after years of consumer education by players like Sam’s Club and Pangdonglai, terms like “value-for-money” and “private label” are no longer novel in China’s retail scene. What differentiates Aldi in Shanghai, say many shoppers, is the care behind its product selection.
Treats from popular Shanghai temples, or the iconic butterfly pastries from Park Hotel—usually sold out or hard to find—can be picked up at Aldi.
For retail investor Chen Xi, her go-to purchases at Aldi are kale and long-stem broccoli. “You rarely see these niche vegetables in other supermarkets, but Aldi has them.” She sees the store’s selection as Western-leaning—simple, but perfectly tailored to satisfy niche needs.
Chen, who’s also a member at Sam’s Club and Hema (also known as Freshippo), has kept a close eye on retail players through her work. Here’s how she sees their positioning:
- “Sam’s Club is all about SKU perfection. The selection is small, but each item feels premium and cost-effective. The packaging sizes are large though, which might be a bit much for young people. But for things like blueberries that I love and consume a lot, I’ll keep buying them at Sam’s Club.”
- “Hema has everything, but not all new products or innovations hit the mark—sometimes you get duds. It doesn’t always feel like the best or cheapest option. But it’s convenient for online ordering, fast delivery, free shipping for members, and member-only discounts, so I use it for everyday odds and ends.”
- “Aldi and Hema feel similar in that they both resemble premium supermarkets. The variety isn’t overwhelming, but Aldi’s private label presence is super strong, and the overall value is better. If I need specialty vegetables or cheese, or just want to throw together a quick meal, I’ll go with Aldi.”
In short, Chen sees Sam’s Club as offering both quality and value—it’s in a class of its own. “But Hema and Aldi are more like alternatives within the same category,” she said.
“Aldi has its own product logic and business insight,” said Zoe, who works in analytics at a leading Chinese supermarket chain. In an interview at the end of 2023, Aldi’s China managing director Roman Rasinger shared the company’s philosophy of aiming to meet consumers’ daily needs, while also offering special items that help them enjoy life.
Zoe’s company has also been part of the industry-wide shift from hypermarkets to premium supermarkets. In 2024, they studied Aldi in depth and compiled a report running into tens of thousands of words. The takeaway? “There’s plenty to learn from Aldi’s product structure, supply chain strategy, and marketing approach.” Among these, its quirky and clever marketing stood out.
In mid-2024, Aldi plastered recruitment ads across Shanghai’s metro stations that doubled as a flex of its sourcing and pricing rigor. Job descriptions called for category buyers who could “run between hemispheres, have six arms, know products, and drive a hard bargain,” and for quality inspectors who were “picky, inquisitive about suppliers, streetsmart, and detail-oriented enough to run 30-point inspections.”
An advertising professional jokingly commented on social media: “Looks like a job ad, but it’s actually a quality-control and pricing boast.” Aldi even put the ads on shuttle buses that circled Hema stores, drawing social media banter about its in-your-face strategy.
In truth, Aldi in China is no longer the same as its German parent, nor is it the same company that first entered the Chinese market.
Chen recalled a pre-pandemic conversation with Aldi’s China executives, where she was told that the barebones, discount-first model used in Germany wouldn’t thrive in China. Instead, they hoped to build a more elevated supermarket experience. She remembers thinking at the time that “Aldi is actually quite similar to Hema.”
But much has changed in China’s consumer landscape since then. The middle class has grown more frugal, and few people are still willing to pay extra for brand names alone. The idea of value-for-money has emerged as the most unshakable consumer priority.
Sam’s Club uses a metric called “member value” to assess its products—measuring how much cheaper a product is, at the same quality and size, compared to the market average. Store associates love to highlight this figure when introducing items to customers.
Faced with competition from Sam’s Club and Pangdonglai, traditional hypermarkets in China have had no choice but to adapt. Aldi, with its regional focus and small footprint, managed to pivot quickly.
In 2023, it launched a price war by heavily promoting low prices in stores, plastering signs all over about getting great quality goods at better prices. By 2024, hundreds of RMB 9.9 items had made their debut, and the number of discounted products kept climbing.
Looking back, Aldi might not offer the absolute best quality, but its lean SKU strategy, reliable private labels, and price competitiveness align it with Sam’s Club and Costco in some surprising ways. As more people make the comparison online, some even joke that “Aldi has become the imaginary rival of Sam’s Club.”
Sam’s Club and Costco will likely remain the go-to choices for large-pack, stock-up shopping. But when it comes to fast, convenient top-ups, Aldi might start pulling customers away from Sam’s Club’s rapid delivery and Costco’s local fulfillment services.
Aldi’s appeal—small packs, unique items, affordability, and trust—is now what large-format retailers are racing to emulate.
Chen isn’t swayed by Yonghui Superstores’ transformation, saying she’s already satisfied with her current shopping options. Arya recently told a friend:
“As long as Aldi doesn’t screw it up, I’m not going back to traditional supermarkets.”
If Aldi’s expansion proceeds smoothly, it could truly disrupt the legacy players that are still struggling to stay relevant.
In Shanghai, Aldi has nailed the positioning of being a low-cost, everyday counterpart to the membership warehouse model. The community supermarket trend is also gaining momentum—Hema is experimenting with a new format called Hema Neighborhood (NB). In an internal letter at the end of 2024, Hema CEO Yan Xiaolei said the company would focus on two main formats: Hema Fresh and Hema NB.
Holding ground in China’s most competitive market already says a lot about Aldi’s strength. But the flip side is that Shanghai’s demand is also uniquely high—offline players like Xiaoxiang Supermarket and Dingdong Maicai all have space to grow. “Aldi only has a firm grasp on Shanghai’s preferences,” said Zoe. “What happens when it enters Beijing?” Its heavy reliance on the Jiangsu–Zhejiang–Shanghai supply chain could become a hurdle in local expansion.
Beyond geographic growth, profitability is also a pressing concern. According to a note from Meritco, by the final quarter of 2024, Aldi’s stores had generated around RMB 2.5 billion (USD 350 million) in revenue, showing an upward trend. Still, only a handful of stores were profitable. Store-level metrics—sales, traffic, and number of profitable locations—are reportedly key performance indicators for Aldi’s China execs.
Wider regional reach, dark stores, and e-commerce are all part of the roadmap ahead—but they also come with uncertainty. Aldi itself called 2024 a year of “opening up.” It opened 14 new stores, expanded from Shanghai proper to its suburbs, and announced plans to enter Suzhou and Wuxi in 2025.
That’s still far from its earlier ambition to open 500–600 stores in Shanghai alone, a goal it laid out in 2022. But in China’s fiercely competitive retail sector, Aldi has carved out a niche. “As long as it maintains patience and standards,” said Zoe, “profitability is just a matter of time.”
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by Ren Cairu for 36Kr.