Costco Opens First Store in China, Frenzied Crowds Force It To Close Early

Costco opened its first store in China in Shanghai Tuesday, but crowds at the Minhang district branch of the popular U.S. big box store were so big it was forced to close early.

"The store has been clogged up with crowds," Costco texted club members. "To provide you with better shopping experience, Costco will suspend business in the afternoon. Please don't come."

Overcrowded Costco
People visit the first Costco outlet in China, on the stores opening day in Shanghai on August 27, 2019. HECTOR RETAMAL/AFP/Getty Images

Police were also forced to step in and monitor the "heavy traffic" both inside and outside of the store—issuing a statement about the three-hour wait time and snapping pictures of the packed parking lot.

"Local police will assist in improving traffic in the area, in order to lessen the disturbance to our neighbors, and we have improved our internal guest flow system," Costco said. "During the upcoming week, we'd like to ask our members to check there SMS before visiting—we will notify you if we are nearing maximum capacity or if there are long wait times."

Costco apologized Wednesday on Chinese social media site WeChat, saying it will enforce a 2,000-person cap on the number of customers permitted in the store at one time.

The incident is not without precedent, however. Shanghai faced a similar issue in January, when U.S. food chain Shake Shack opened its first location in the country's mainland—and where according to Reuters, burger scalpers lurked to take advantage of those fed up with standing in line.

A few shoppers took to Twitter before the store closed, appearing both shocked and amused by the frenzy.

Others expressed fascination at the items being sold. In addition to the standard food and home supplies one might expect to find in Costco, the Shanghai location appeared to offer an array of luxury products from designer handbags to high-end cosmetics.

Inside the store, consumers flooded the aisles and got into altercations over long lines and dwindling supply, Bloomberg reported. Annual membership for the store cost about $28, far less than the $50 charge for a Costco membership in the United States.

Costco (which trails behind only Walmart as America's largest brick-and-mortar retailer), opened the doors to its first location in Seattle in 1983. Since then, the company has expanded to other territories including Canada, Mexico, Europe, Japan and Australia, and now, China. According to the Costco website, it was the "first company ever to grow from zero to $3 billion in sales in less than six years."

The large-scale chain also made headlines Tuesday, for shutting down its food court for a 4-year-old's birthday party.

Costco Opens First Store in China, Frenzied Crowds Force It To Close Early | Business