Sam's Club China to open its largest single floored outlet in Shanghai in 2021. [Photo/Provided to chinadaily.com.cn]

Sam's Club, the high-end membership store of world retailing giant Walmart, is expected to open its flagship store in Shanghai, the third in the city, a proactive move in the face of the fierce competition accelerated by the opening of Costco Wholesale store last year.

Andrew Miles, president of Sam's Club China, said on Wednesday the outlets, growing with their members, are excited to add the flagship outlet into their rapidly expanding footprint, calling it "a testimony of our commitment to our members and China."

The flagship outlet, covering 70,000 square meters and designed to be the largest single floored outlet operated by Sam's Club in China, will become a shopping and entertainment destination, prioritizing item selection, shopping experience, the design of the space and member service areas.

"It will not just be another shopping outlet, but combination of shopping, leisure and entertainment," Miles said.

"The intent is to showcase the lifestyle that Sam's Club wants to bring to our members and their families, the parents, kids and grandparents, a destination full of surprises and combined in membership environment," he added.

Located in Waigaoqiao New Development Park, Shanghai Pilot Free Trade Zone, the flagship outlet is 30-minute drive from core area of Pudong District, and Wujiaochang and Xinjiangwan area in Puxi.

The building will include a Sam's Club, a selection of service facilities ranging from eatery, entertainment, to lifestyle and education and combined under one roof to offer a high quality one-stop solution for its members. A total of 1,100 parking slots are available for members only.

Sam's Club offers around 4,000 differentiated items, including its fresh category, the private brand of Member's Mark, direct imports from over 30 countries and regions.

Previously focusing on South China market, Sam's Club's recent decision to penetrate Shanghai is based on the city' consumption capacity, scale of middle class and their willingness to pay for memberships in exchange for quality products and good experiences, said Jason Yu, general manager of Kantar Worldpanel China.

Last August, Costco opened its first store in Shanghai, attracting huge shopping traffic on its debut. It plans to open its second store in Shanghai at the end of 2020 or at the beginning of 2021.

Speaking on the competition between Sam's Club and Costco, both targeting middle class families, Yu said Costco is more pantry loading, selling mostly at good price and signature products, while less focusing on in-store environment nor convenience of its locations.

Sam's Club could be taking the lead by mixing family shopping with leisure and entertainment, he said.

"China market is vast and fast changing and there is still a lot of space for new comers if they are able to differentiate and win through either efficiency or better customer experience," he added.

"Sam's Club clearly wants to build scale therefore higher operation efficiency with the future pipelines," said Yu. "It reinforced what we said early that big box retailers are here to stay (they won't disappear) but they have to transform themselves faster to win different consumption opportunities."

More than 30 percent of the members shop both online and offline. Samsclub.cn and its application cover a wide range of items and provides one-hour delivery service in major cities.

It also leverages sourcing network across border. JD.com has able to extend its coverage nationwide including cities without physical clubs.

Sam's Club currently runs 26 outlets in China, and is looking to have 40-45 clubs under construction and open by the end of 2022. With more than 2.8 million members in China, the outlet has doubled the number of 2015.