(Yicai Global) May 23 -- After launching its service in Shenzhen one month ago, US retail warehouse chain Sam's West Inc., better known as Sam's Club, has expanded its one-hour home delivery service to East China by unveiling it in Shanghai to counter Costco Wholesale Corp.'s entry into the Chinese market, industry observers believe.

Dada-JD Daojia officially began e-commerce and delivery services in Shanghai for the Walmart Inc.-owned retailer yesterday, Sam's Club's one-hour home delivery service will provide 1,000 best-selling and popular goods, which will cover almost all fresh products as well as daily supplies such as baby products, personal care items, dry goods and snacks.

Costco, a large storage-oriented retail store that adopts a membership system, is seen as a main competitor to Sam's Club. On May 8, US-based retail giant Costco inked an investment agreement with state-owned Shanghai Pudong Kangqiao Group, through which it will set up its regional headquarters in Kangqiao in Shanghai and will jointly build a membership retail flagship store with its partner Galaxy Holding Group Property Co. in another area of China's business capital.

The two rivals will compete in China's multibillion dollar premium market, the observers said.

Since Sam's Club store opened in Shenzhen early last month, the number of orders per day has been rising and the week-on-week growth rate has averaged 35 percent.

By establishing multiple warehouses, Sam's Club and Jddj.com will deliver goods within one hour to members who cannot visit the store.

Currently, Sam's Club has three e-commerce platforms, namely samsclub.cn and its app, its flagship store on JD.com and its global flagship store on JD.com's international site. Its flagship store was rolled out in October 2016 and its sales increased by four times year-on-year. Its global flagship was launched in May last year and its sales rose by eight times annually.

Jddj.com is an online-to offline, O2O, wholly-owned subsidiary established by JD.Com in 2015 and mainly provides local life-supporting services by providing delivery of thousands of items such as fresh food and other items sold in supermarkets. JD.Com works with large supermarkets and goods are delivered by JD Logistics. Jddj.com has covered some first- and second-tier cities such as Beijing, Shanghai, Guangzhou, Shenzhen and Chengdu.

Editor: Mevlut Katik