US retail giant Costco is diving into the thorny area of food retail in China with its first store opening Tuesday, 27 August, but analysts warn it faces a tough ride as it looks to succeed where a series of international retailers have failed.

The move also comes at a challenging time as Beijing and Washington are engaged in a tense trade war that has seen them swap punitive tariffs on hundreds of billions of dollars worth of goods.

China has proved a brutal battleground for overseas food retailers in recent years, with many failing to understand consumer habits and tastes and facing strong competition from local companies.

In June, the French supermarket giant Carrefour agreed to sell 80 percent of its China business to domestic giant Suning after repeated losses.

German wholesaler Metro is also in the process of selling its operations to a local bidder while British grocery giant Tesco pulled out of the Chinese market in 2014.

“The Chinese market is very complicated and requires retailers to innovate and localize,” said Jason Yu, general manager of Kantar Worldpanel China.

But Costco thinks it can avoid the malaise that has plagued others with its “no-frills approach” and bulk-buy strategy.

The retailer will open its doors five years after making its first online foray into China.

Richard Zhang, Costco’s senior vice-president for Asia, told AFP the firm had a “conservative” goal of signing up at least 100,000 members for the new store, which is in a suburban district of Shanghai with a two million-strong population.

Zhang said it had taken time to make sure that consumers in China knew their brand and the market was mature enough.

Costco will be targeting China’s affluent growing middle class, who know the brand from travelling abroad.

However, analysts warned that local competitors are stealing ground with popular home-grown retailers such as Alibaba’s bricks-and-mortar Hema stores that integrate online and offline shopping.

“Local retailers are reaching out to customers via all distribution channels while foreign retailers are not so flexible to adapt to new situations,” said Yu. “The old way of a large and all-inclusive hypermarket doesn’t work in China.”

Chih-yuan Wang, retail research director at Mintel China Reports, warned that many foreign retailers adapted too slowly and “still hadn’t caught up with China’s rapid e-commerce craze where customers go shopping on mobile phones”.

“The cost of [later] building a home delivery service is very high and may affect Costco’s basic strategy to provide the lowest available prices,” he said.

Costco’s big rival, membership-based warehouse Sam’s Club from Walmart, has over two decades of history in China and is still on the expansion trail with plans to reach 40 stores by the end of next year.

But Zhang said the fact that Chinese consumers are already familiar with a membership supermarket model could work to Costco’s advantage.