What Aldi and Costco’s Success Says About Chinese Shoppers

Two foreign retailers have quietly cracked something in China that many giants could not: Aldi and Costco both built loyal, enthusiastic followings when plenty of bigger names retreated. They could hardly be more different in format, one a compact discount grocer, the other a vast membership warehouse, yet they succeeded for the same underlying reason. They both gave the Chinese shopper exactly what they now want: trusted quality at a fair price, from a curated selection they do not have to second-guess. For any foreign brand, understanding why these two won is more useful than any amount of theory, because it tells you precisely what the modern Chinese grocery buyer rewards.

What Aldi and Costco have in common

On the surface, very little. Aldi runs small, efficient stores with a tight range of mostly own and selected brands at low prices. Costco runs enormous membership warehouses selling bulk quality goods. But underneath, both do the same thing: they curate. Instead of overwhelming the shopper with thousands of choices, they offer a carefully chosen, trusted selection and effectively say, we have done the vetting for you. In a market where shoppers worry about quality and safety and are tired of being sold to, that curation is deeply reassuring. Both brands turned trust and a tight, good selection into a reason to be loyal.

That is the lesson. The Chinese shopper is not just hunting the lowest price, and not just chasing premium either. They want to trust that what they buy is good, and they value a source that removes the doubt. Aldi and Costco both sell that confidence as much as they sell groceries.

What this tells a foreign brand

• Trust beats noise. Being a vetted, reliable choice matters more than shouting the loudest or being the cheapest.
• Quality at a fair price wins. Not cheapness, not pure luxury, but justified value the shopper believes in.
• Curation is a service. Helping the buyer choose confidently is itself valuable in an overwhelming market.
• Consistency builds loyalty. Delivering reliably, every time, is what turns a trial into a habit.

How a brand earns that trust

A small brand cannot become Aldi or Costco, but it can apply the same principle: be the choice the buyer can trust without second-guessing. That means proving your quality clearly, being consistent, and building the kind of reputation that makes choosing you feel safe. On Xiaohongshu, where Chinese shoppers research and validate products through real reviews, a brand that earns genuine, consistent praise becomes the trusted pick in its niche, the small-scale version of what curation does for Aldi and Costco. Real proof from real people is how a brand without a giant retailer’s name builds the same confidence.

And when a shopper searches your brand to confirm it is trustworthy, your presence on Baidu has to back it up. Trust that breaks at the verification step is no trust at all.

Does this mean I should compete on price?

No. Neither Aldi nor Costco wins purely on being cheap. They win on trusted value, the sense that the price is fair for genuinely good, vetted products. Chasing the lowest price is a race a foreign brand usually loses to local mass producers, and it erodes the quality image that is your real asset. Compete instead on being the reliable, quality choice at a price the buyer feels is justified. That is the position Aldi and Costco occupy, and it is far stronger and more defensible than cheapness.

What is the single takeaway for my brand?

Be a brand the Chinese shopper can trust without thinking twice. Whether or not you ever sell through a curated retailer, the instinct that made Aldi and Costco succeed runs through the whole market: shoppers reward reliable quality, fair value, and a source that removes doubt. Prove your quality, stay consistent, build genuine reviews, and make verification easy, and you become the trusted choice in your niche. In a crowded, sceptical market, being the brand people do not have to worry about is the most valuable position there is.

Where we come in

We are a team of 15 in Shanghai who help small brands build the kind of trust that made Aldi and Costco win in China: proven quality, genuine reviews where buyers research, and a credible presence on Baidu when they check you. If you want to be the trusted choice in your niche, tell us about your brand.

Jon Wang is a straight-talking business man who lives and breathes Chinese ecommerce and distribution, and favours practical solutions over theory.