In the retail landscape, the membership store model, centered on quality and service, is rapidly rising.

Looking at the domestic market, Sam's Club's offline membership stores have continued to grow in performance, attracting a large number of loyal customers with high repurchase rates, and driving the growth of Walmart, which has been closing stores globally.

Online, the potential of the membership model has also been validated. After four years, as the only paid membership e-commerce platform in the market, 1hao Store currently has nearly 3 million paid members, and its integration of e-commerce with the paid membership model is blazing an unprecedented new path.

The "game-changer" feeling its way through uncharted waters

The membership model is attracting more and more players. There are M Store, Hema X Membership Store, and even Oriental Selection, and even 1688, which focuses on B2B business, has launched its membership-based "White Label Supermarket" - PLUS Membership Store.

JD.com foresaw this new trend in the retail market even earlier. In 2020, amid slowing economic growth and other factors, the wave of consumption upgrades gradually subsided, replaced by the call for consumption downgrades. While focusing on low-priced quality products, JD.com also noticed the needs of the new middle class and their potential for countercyclical growth in the current economic situation, leading to an advanced strategic layout.

In July 2020, "Yhd.com" was officially upgraded to "1hao Store," positioning itself as a membership-based shopping platform and attempting to integrate and upgrade the online advantages of e-commerce with the operating model of membership stores.

As the world's first and only paid membership e-commerce platform, there was no precedent to follow, and challenges had to be faced through trial and error.

Although the expansion of China's new middle class provides a large user base for the membership model, overseas-introduced membership models such as Sam's Club and Costco once led the industry to believe that the membership model was more suitable for offline scenarios.

As a result, 1hao Store keenly targeted stay-at-home mothers in middle-to-high-income families. Stay-at-home mothers, as the heads of households, have distinct characteristics: they have strict requirements for products and are willing to pay for safety, health, and quality. This is exactly the core target customer group for 1hao Store.

To this end, 1hao Store focused on frequently purchased food categories for families, selecting high-quality products to directly help users find the most reliable products, without resorting to complicated promotional tactics. This efficient model, which provides users with simple choices, decision-making, and guarantees, allows 1hao Store to accurately grasp the needs of middle-class families, capturing new users and achieving growth from scratch.

1hao Store has also applied innovative thinking to acquiring new users. After arduous exploration, 1hao Store adopted a model where members can receive relevant benefits every month upon opening a membership card, directly providing some services to members from the subsequent product stage to the card opening stage, enabling the online paid membership e-commerce model to gain a firm foothold in the intense competition among membership stores.

As we all know, the annual fee for 1hao Store is 198 yuan, while the annual fee for Sam's Club's regular membership is 260 yuan and Costco's Gold Star membership is 299 yuan. The latter two are not only more expensive but also merely grant access to offline membership stores upon card opening. As a purely online model, 1hao Store turns this entry ticket into tangible benefits for members.

Simply put, members of 1hao Store pay 198 yuan but enjoy benefits worth 360 yuan. Members can receive a box of milk or raw eggs from 1hao Store every month, with a value far exceeding the annual fee of 198 yuan. In addition, there are shopping rebates, with different rebate amounts for different membership levels, maximizing the benefits for members.

Combined with rigorous and accurate product selection, 1hao Store successfully "felt its way across the river," not only pioneering a new model distinct from offline membership stores and successfully combining the advantages of both, but also effectively avoiding the chaotic lower-tier market competition and opening up a new market for middle-to-high-income customers amidst the retail industry's fierce competition centered on low prices, market penetration, and traffic.

High-quality products are the core competitiveness

In recent years, influenced by economic conditions and future expectations, the consumption philosophy and behavior of the new middle class, previously driven by consumerism, are undergoing changes.

According to the "2023 New Middle Class White Paper" released by Wujiaobao, the top four product descriptors that attract the new middle class are cost-effectiveness, basic/practical, upgraded experience, and high-end/quality. Additionally, in terms of consumption behavior, the new middle class is "frugal in daily consumption but willing to spend money on their passions," with a particular emphasis on spiritual consumption. These changes reveal two keywords: rationality and conservatism.

However, the ranking of cost-effectiveness first does not mean that the new middle class does not pursue quality but rather pursues both quality and affordability. This directly reflects the demand for high cost-effectiveness among 1hao Store members.

To better select products, 1hao Store determined from the beginning of its transformation to establish an experienced buyer team. It is understood that the current buyer team consists of around 100 members, some of whom come from factories and others from Sam's Club and other membership stores, all experts in product development and operations from various industries.

The evaluation criteria for the buyer team at 1hao Store do not solely focus on GMV but rather on whether the products developed in each category are sufficiently attractive, such as whether the number of effective shoppers is continuously increasing. This operational management system fundamentally determines the curated nature of membership products across the platform.

One's Member Australian M3 beef shank is a superstar product developed by 1hao Store. Data shows that its sales increased by over 410% year-on-year in 2022, with over 40% of members making repeat purchases. Similarly, One's Member 4.0 lactoprotein fresh milk has conquered a large number of consumers upon its launch with its superior quality-to-price ratio. According to JD.com sales data, it ranks in the top five among products with over 3.6g of protein per 100ml and tops the list among 4.0g protein milk products.

By creating its own brand, One's Member, and offering high-quality differentiated products, 1hao Store has captured the spending power of middle-class consumers.

Taking beef as an example, 1hao Store ensures quality control throughout the entire chain, from product selection to after-sales service. For example, Australian M3 beef shank uses Angus beef shank that meets M3 standards as raw material, grain-fed for 270 days, and undergoes multiple rounds of evaluation and tastings before being officially launched for sale.

In addition, One's Member's zero-addition concept has helped 1hao Store successfully capture the hearts of many members.

As early as 2021, when 1hao Store first began to develop its own brand, it focused on the concept of zero additions. For categories such as fresh produce, snacks, baby food, and pet food, it released "zero-addition" food selection standards, carefully selecting products while supervising the production process and conducting pre-launch testing and periodic inspections.

"This cycle can sometimes be very long, lasting four to five months from selecting upstream factories to production, standard review and testing, and finally listing on the platform," said the business leader of 1hao Store.

Over the past four years, while ensuring a rich product offering for users, 1hao Store's strategy of selecting only curated products has remained unchanged. To date, 1hao Store has over 300 zero-addition products, leading the industry, and products labeled "clean ingredients" have become members' preferred choice. It is reported that currently, the average consumption frequency of 1hao Store users is 40 times, with a next-day return rate of 53%, a 7-day return rate of 87%, and a 30-day return rate of 97%.

Is the future of membership stores online?

Currently, 1hao Store has nearly 3 million paid members, serving middle-to-high-income families in China, with an average member order value of around 240 yuan. Its own brand, One's Member, has developed over 600 exclusive custom products after four years of accumulation.

Thanks to more timely and comprehensive member feedback online, 1hao Store can continuously accelerate the iteration of membership products to meet members' more diverse needs. After products are launched, 1hao Store closely monitors consumer evaluations. When the positive evaluation rate declines, buyers need to adjust, optimize, or even delist products.

This fully demonstrates 1hao Store's emphasis on "quality-to-price ratio" and "differentiation" in its product strategy.

At the same time, while ensuring product quality, 1hao Store leverages its strong bargaining power and efficient operating model to offer members more favorable product prices and membership benefits, maximizing the scope of benefits for members.

Compared to offline membership stores, 1hao Store has no geographical restrictions or high rental costs, making its model more flexible. Once it captures consumer preferences, the convenience and efficiency of online shopping will continue to stack up benefits, building a stronger business barrier compared to offline membership stores.

Indeed, this is the case. After breaking through 800,000 members in 2022, 1hao Store surpassed 1 million members in March 2023 and reached 2 million members just six months later. This year, 1hao Store's paid membership is approaching 3 million, growing at a much faster rate than offline membership stores. For comparison, it took Sam's Club 21 years to accumulate its first million members, three years for its second million, and nine months for its third million.

"1hao Store has moved from the exploratory and refinement phase in the first stage to the rapid fission growth phase in the second stage," said the leader of 1hao Store. "In the future, we can foresee that the growth rate will accelerate further, and we hope to exceed 5 million members by next year."

After four years of perseverance, 1hao Store has not only established a viable model for membership-based e-commerce but also proven that there is more than one path for paid membership models. In fact, the development potential of paid membership e-commerce may offer even greater possibilities than offline membership stores.

In short, during the four years since 1hao Store's transformation, the retail industry has entered a stage of multi-format coexistence, with membership stores becoming an important fulcrum for industry transformation and upgrading. In this fierce competition for paid membership models, 1hao Store has demonstrated the enormous potential generated by combining the advantages of the e-commerce model with the membership system.

It is no exaggeration to say that there are countless homogeneous membership stores like Sam's Club and Costco in the industry, but there is only one 1hao Store in the world. As the world's only paid membership e-commerce platform, 1hao Store offers the retail industry a higher-dimensional development model.

This serves as an inspiration for the entire retail industry:

As long as one adheres to differentiated product innovation and exceptional customer service, even starting from scratch, one can still gain significant recognition from consumers and the market, even becoming a standout player.

Daotongli, formerly known as Waitdaodao, is a new media outlet focused on the Internet and technology industry. Follow us on WeChat: Daotongli (daotmt). This article is original and any form of reproduction without retaining the author's information is prohibited.