Key Points
- Warehouse-style Asian supermarkets can offer prices up to 30 per cent lower than traditional stores.
- An expert says this trend could challenge major chains like Coles and Woolworths.
- The rapid expansion operates in a largely unregulated space, raising concerns about food safety and compliance.
Upon stepping through the warehouse roller doors, customers are greeted with a variety of goods often displayed in their original cartons rather than on organised shelves.
The new breed of warehouse-style supermarkets specialise in bulk purchase options. Credit: Fujia Yang
SBS Chinese has observed at least six such stores currently operating in metropolitan Melbourne, at least four in metropolitan Sydney, and similar openings have also been noted in Brisbane.
“Things here are more affordable. I just wish there were more product variety,” another said.
A shopper says he often brings his son to the warehouse supermarket and hopes for more variety. Credit: Fujia Yang
Mark Zhang, an owner of one warehouse-style store, started a ‘group buying’ business on the Chinese social media app WeChat.
Over time, some customers began collecting their orders directly from his Melbourne warehouse. In June 2023, he decided to officially open his warehouse to the public.
It’s similar to a Costco-style discount warehouse.
Mark Zhang, Melbourne warehouse supermarket owner
“Dumplings are priced at $11.99 for three packs. Elsewhere, one pack would cost about $8. Most of our products are 20 to 30 per cent cheaper than traditional Asian supermarkets.” Zhang added.
Mark Zhang describes his warehouse supermarket as an ‘Asian food Costco’, offering bulk and retail sales. Credit: Fujia Yang
Bill Chen, another warehouse-style supermarket owner, was inspired by his peers. He noted that in addition to lower labour and rent costs, larger purchase volumes give them greater bargaining power with suppliers.
“When items are bundled, I ask friends or family if they want to share. We buy a lot at once, so we don’t need to visit often,” another shopper said.
A challenge to the major chains?
Dr Ou Yang, a senior research fellow at the Melbourne Institute of Applied Economic and Social Research, believes this trend could challenge traditional Asian supermarkets and major grocery chains.
Warehouse-style Asian supermarkets may impact Woolworths and Coles in Chinese neighbourhoods.
Dr Ou Yang, senior research fellow, Melbourne Institute of Applied Economic and Social Research
“The Chinese community has always embraced the ‘wet market’ concept.”
“We will never return to the pre-pandemic economic environment of low or zero interest rates. High inflation and high interest rates will define the major economic environment moving forward. Warehouse-style Asian supermarkets will become increasingly refined,” he added.
‘More of a hometown flavour’
To attract more foot traffic, Zhang moved his store from a remote industrial area closer to residential neighbourhoods, where weekend peak traffic now reaches 500 to 800 customers per day.
Bill Chen, a Taiwanese food warehouse supermarket owner, believes competitiveness goes beyond a warehouse model. Credit: Fujia Yang
Similarly, Chen chose a location in a food wholesale hub, believing it would naturally draw shoppers.
“Regulation tends to follow market development. Regulation will only catch up once these stores reach a certain scale.”