No reversal has occurred; Shihui Tuan, a name gradually drifting away from the center of community group buying, has completely exited its home base of Hunan Province. Lianxian Insight learned from multiple independent sources that Shihui Tuan completely shut down its Hunan operations in mid-to-late February 2022. This means Shihui Tuan has lost its last stronghold. Several former employees revealed that they each received a portion of owed wages in late February, with some receiving full amounts and others 70%. Multiple suppliers reported that they have not yet received owed payments or deposits. The malfunction of Shihui Tuan's official mini-program also indirectly confirms its defeat in the community group buying market. On March 15, Lianxian Insight placed an order normally on Shihui Tuan, but just a week later, the mini-program could no longer be used properly; even when orders could be placed, they could not be queried in the backend. The Shihui Tuan mini-program showed abnormalities. Source: Shihui Tuan mini-program. This outcome is not surprising. Since August 2021, Shihui Tuan has been shrinking its business footprint. First, it closed cities on a large scale, retaining only five core city clusters, and then only Hunan Province remained operational. Now, Shihui Tuan has completely withdrawn from its final stronghold, Hunan Province, and its whereabouts are unknown. "The Changsha office closed before the Chinese New Year," said a former Shihui Tuan employee. "At that time, only a few employees remained in Hunan, mainly handling supplier payment issues." According to Lianxian Insight, by early 2022, Shihui Tuan had only a few hundred employees left. Where has Shihui Tuan gone after leaving Hunan? This is a common concern for suppliers and former employees. "Currently, senior leaders are still at Shihui Tuan, testing some new projects," a former employee told Lianxian Insight. "In the second half of last year, Shihui Tuan was also constantly trying new directions, including small-scale trials of warehouse discount stores, snack stores, and milk stations." Additionally, an insider close to Shihui Tuan's management told Lianxian Insight that a brand called "Chao Ji Jin 24-Hour Self-Service Supermarket" recently appeared in Changzhou, Jiangsu Province, founded by a family member of one of Shihui Tuan's co-founders, and the supermarket uses shopping baskets marked with "Shihui Tuan." Qichacha shows that Zhang Yu, an executive of Changzhou Shimi Technology, the parent company behind "Chao Ji Jin 24-Hour Self-Service Supermarket," was previously the legal representative of multiple branches of Shihui Tuan's affiliated companies. Some former Shihui Tuan managers have also found new paths, founding regional group buying platforms and remaining active in the community group buying industry. Things have changed; the era of Shihui Tuan is ultimately over. On December 8, 2020, Shihui Tuan CEO Chen Ying sent an internal letter saying: "Shihui Tuan stood out from thousands of startups, forged through countless arduous and dangerous battles, betting everything dozens of times to get to where we are today." But in the current industry landscape dominated by giants, Shihui Tuan, despite its trials, failed to become a miracle and has disappeared from the watchlist of industry competitors. ******Losing the Last Stronghold The retreat was silent. "This time there was no written notice, no official document issued; Shihui Tuan quietly withdrew from Hunan," a recently departed employee learned from colleagues. "The Changsha office closed before the Spring Festival, leaving only 2-3 employees to handle supplier payments, and the central warehouse closed shortly after the New Year." The insider added: "If we must pinpoint the shutdown time, it was in late February when Hunan operations were completely closed." In his view, "Shihui Tuan certainly would not and dare not issue an official shutdown notice. It owes suppliers tens of millions in payments that have not been settled. If the news got out, another pile of suppliers would trample the office threshold." It is important to understand that Hunan Province is special for the entire community group buying industry. In November 2020, Duoduo Maicai, Meituan Youxuan, and Chengxin Youxuan concentrated their firepower on Hunan Province. It is not only the headquarters of Xingsheng Youxuan but also the home base of Shihui Tuan. Source: Shihui Tuan official website. People in the community group buying industry know that although Shihui Tuan's main company is registered in Beijing, its actual "command center" is in Hunan. Chen Ying and other executives have long worked at Huakun Times Square on Xiangfu Road in Changsha. So unlike the previous large-scale, rapid closure of other city clusters, Shihui Tuan's gradual reduction of Hunan operations means it is abandoning its home base, which may signal that the end of Shihui Tuan is near. A former employee recalled that layoffs in Changsha began in October last year, with the most layoffs and widest department coverage in December, including many employees who had worked at Shihui Tuan for two years. "From late December, layoffs occurred every day." The pace of staff reduction was astonishing. An employee who left on December 20 last year recalled: "When I signed my resignation contract and exited the DingTalk group, there were still over 1,200 people." Another employee who left on December 30 vaguely remembered: "On the day I left, the employee group on DingTalk still had a few hundred people." Both veteran employees realized upon leaving that Shihui Tuan's capital chain had broken, and core departments in Hunan responsible for grid warehouses and procurement had begun layoffs, meaning Shihui Tuan was about to "collapse." They even felt that receiving back pay was "a blessing in disguise." The drastic reduction in staff across departments caused many suppliers to lose contact with their procurement contacts, making them increasingly anxious to get the long-overdue money. From November last year to January 2022, the payment issue continued to worsen. A large number of suppliers who could not get paid eventually organized rights protection in January, rushing to Shihui Tuan's Changsha office and even going to the Beijing headquarters to demand answers. "In early January, three people claiming to be entrusted by Shihui Tuan headquarters came to Changsha to handle debt issues, offering suppliers and grid warehouse franchisees an installment payment plan—first paying 10% of the debt, with the remainder settled over three years." A Changsha supplier involved in the rights protection recalled to Lianxian Insight: "Later, Hunan gave me a one-time settlement plan at 30%, meaning only 30% of the payment would be settled. If I signed this agreement, the previous one would be void. I chose the latter; who knows if Shihui Tuan will still exist in three years." Screenshot of the "one-time settlement plan," provided by the interviewee. A supplier who initiated rights protection told Lianxian Insight that at the time, she roughly estimated that Shihui Tuan owed at least 200 suppliers a total of tens of millions in payments and deposits, plus over 5 million yuan to grid warehouse franchisees. During the supplier rights protection, supply stopped, and during that period, many Changsha citizens felt that "Shihui Tuan had changed; after placing orders, goods were not delivered, delivery drivers could not contact distribution points, and when going to distribution points, they said there was no stock, and customer service was unreachable. Money could not be refunded either." Group leaders also became victims of this turmoil. In January 2022, a group leader heard that many suppliers and drivers were collectively protesting, so she immediately withdrew over 1,000 yuan in commission, but the money has not arrived to this day. Moreover, after applying for withdrawal, her group leader status was canceled, and she could no longer accept orders. The "Shihui Tuan" mini-program, having lost suppliers and group leaders, is like an abandoned shell. Lianxian Insight has been trying to open the mini-program recently, but it repeatedly shows "Too many visitors, the server is exhausted." Only once did the page return to normal, but settlement was no longer possible. Shihui Tuan, which closed cities and laid off staff to save itself, survived the winter but did not welcome spring. ******Attempted Self-Rescue, Explored New Directions If giants had not entered, Shihui Tuan would have continued to live at its own pace. But reality is cruel. In 2020, Shihui Tuan's financing news was continuous, with four rounds of financing in one year. Even the entire community group buying financing track was uniquely lively. Aiqicha data shows that in 2020, disclosed financing amounts for community group buying exceeded 17 billion yuan, while in 2018, at the peak of community group buying startup development, disclosed financing was only over 1.6 billion yuan. Shihui Tuan's financing history. Source: Aiqicha. Entering 2021, internet giants like Meituan, Pinduoduo, and Alibaba rapidly evolved and surpassed startups. What surged toward Shihui Tuan, besides massive enemies, was the urgent shortage of book funds. Throughout last year, Shihui Tuan's senior management was desperately seeking money. An insider close to Shihui Tuan's senior management told Lianxian Insight: "Alibaba participated in Shihui Tuan's financing multiple times. From the card game perspective, Alibaba and Shihui Tuan were once in the same camp, but in the end, Alibaba no longer supported Shihui Tuan as before. They added multiple conditions to the financing betting agreement, such as Shihui Tuan achieving profitability within a specified time, which Shihui Tuan found difficult to meet." The insider added: "When Taocaicai was launched, some top Alibaba managers changed their attitude toward Shihui Tuan. But there was no choice; when a company gets big, it must listen to collective opinions." Starting in the second half of last year, Shihui Tuan employees also realized the company's capital chain problems and began privately inquiring whether financing had arrived in time. One employee recalled: "Senior management also reassured us at multiple internal meetings, saying financing was coming soon, money was about to arrive." A former mid-level manager told Lianxian Insight: "Shihui Tuan encountered many difficulties seeking financing last year. Senior management also tried to raise funds overseas; I don't know the outcome. In any case, a sum of money did come in at the end of last year, mainly used to pay employee wages and supplier payments." Besides finding money, senior management was also striving to transform, setting up a change team of several people to search for transformation directions on the front line, with members reporting directly to senior management. A former employee who worked in that team told Lianxian Insight that Shihui Tuan researched warehouse discount stores, snacks, and fresh milk businesses, and tested them on a small scale, but the results were unsatisfactory, so they were all suspended. "When exploring the snack direction, we mainly researched the brand 'Snacks Busy.' The fresh milk station opened one store in Hunan, and the warehouse discount store was promoted in the Northeast for a period," the employee added. "However, no matter the model, Shihui Tuan ultimately did not succeed. We frontline researchers also left." Public information shows that the snack chain "Snacks Busy" started from Changsha, developed over 600 stores in three years, and received $240 million in financing from institutions including Sequoia Capital, with a valuation of 2.4 billion yuan. Snacks Busy targets the mass consumer group that values affordability over quality with ultra-low average order value. Guo Shanshan, partner at Sequoia China, once praised Snacks Busy as a first-class brand with consumer insight, solving the deep demand for snack consumption to the greatest extent. Leisure snacks are indeed a vast market worth trillions. Data from China Commercial Industry Research Institute shows that the market size of China's leisure food industry grew from 822.4 billion yuan to 1.2984 trillion yuan, with a compound annual growth rate of 12.09%. When the market space for community snack small formats becomes the next entrepreneurial opportunity for community entrepreneurs, it is understandable that Shihui Tuan, with its community e-commerce foundation, sent dedicated personnel to research this direction. Besides exploring the snack market, the fresh milk station only opened one store in Hunan. The warehouse discount store held a franchise conference in the Northeast, covering Harbin, Shuangcheng, Mudanjiang, and other places. "The warehouse discount store launched by Shihui Tuan was actually a grid warehouse discount store with a front-store-back-warehouse model," a franchisee who attended the conference explained to Lianxian Insight. "The new model makes grid warehouses more diversified. For example, grid warehouse discount stores can offer some near-expiry discount products, and franchisees develop quality group leaders to sell discount products, similar to the group wholesale model." The results of the previously tested new businesses do not seem promising. An insider close to senior management said: "The loss of the Hunan community group buying market does not mean Shihui Tuan has gone bankrupt. Shihui Tuan executives are still looking for new directions." But on a heavily indebted platform like Shihui Tuan, is continuing to develop new businesses more beneficial or harmful? "Even if Shihui Tuan wants to start new projects later, it probably will not incubate them from the Shihui Tuan platform; it is likely to create a new platform," analyzed the founder of a regional community group buying platform. "Shihui Tuan is now heavily in debt, and the team does not need to bear such great pressure to do new projects, which would not be conducive to the development of new projects." Whether or not Shihui Tuan can find a new way out, disbanding frontline staff across regions and closing the Hunan stronghold all indicate that Shihui Tuan has withdrawn from the front ranks of community group buying. ******Shihui Tuan's Strong Players Left and Started Their Own Businesses In the first half of the story, Shihui Tuan was a motivational top student "forged through countless arduous and dangerous battles," but in the second half, things changed. As the founder of Shihui Tuan, Chen Ying's educational background is impressive: after graduating from Fudan University, he earned an MBA from Harvard Business School with the highest honor of Baker Scholar. After graduation, Chen Ying plunged into rural northern Jiangsu. In 2012, he began researching rural e-commerce projects in rural areas. This experience allowed him to accumulate extensive experience in agricultural products, e-commerce, and social networking. Team members at the time described Chen Ying's work style as "do it if it works, change it if it doesn't." Four years later, in 2016, a chance opportunity led Chen Ying to the path of fresh food social e-commerce. He founded "You Hao Dong Xi," which gradually grew. The turning point came in 2018, when community group buying was the hottest trend, with almost every province having several regional group buying platforms. Shihui Tuan was born that year. In June 2018, Chen Ying and Wang Peng, senior vice president of "Ai Xian Feng," co-founded Shihui Tuan and received 100 million yuan in angel financing in August. The localized nature of group buying platforms meant that the young Shihui Tuan could expand rapidly through acquisitions. In 2019, Shihui Tuan completed a merger with another community group buying platform, "Ni Wo Nin," and subsequently acquired "Hao Ji Le" and "Lin Li Shuo," quickly becoming a first-tier brand in the community group buying track and successfully surviving the industry shakeout that year. As seen externally, Shihui Tuan, which had recruited many strong players in the industry, saw many managers leave as layoffs continued last year. A founder of a regional group buying platform said: "Several mid-level leaders who left Shihui Tuan have now restarted regional group buying businesses. This is not surprising; before joining Shihui Tuan, they started in regional community group buying. Now they have a lot of resources and can quickly set up without needing financing." Lianxian Insight learned that besides former employees, some current managers at Shihui Tuan also have ideas to start their own businesses. Additionally, several community group buying practitioners have recently noticed a retail convenience store brand called "Chao Ji Jin 24-Hour Self-Service Supermarket." A former Shihui Tuan employee told Lianxian Insight: "This convenience store brand uses shopping baskets with the words 'Shihui Tuan.' It first opened stores in Changzhou, Jiangsu Province, using an unmanned convenience store model, with each store not exceeding 20 square meters. Currently, the products sold are mainly internet-famous snacks. And it is certain that this convenience store brand was recently founded by a family member of one of Shihui Tuan's co-founders." Through Qichacha, Lianxian Insight found that the company holding the trademark for "Chao Ji Jin 24-Hour Self-Service Supermarket" is Changzhou Shimi Technology Co., Ltd., established in January 2022. Its executive, Zhang Yu, was previously the legal representative of seven branches of Shihui Co., Ltd., including the Nanjing branch and Hangzhou branch. Additionally, Qichacha shows that the legal representative of Shihui Co., Ltd. was once Chen Ying, founder of Shihui Tuan. On December 18, 2021, the legal representative changed from Chen Ying to Wang Wenjing. An internal employee once told Lianxian Insight that Wang Wenjing, the new legal representative, was not in Shihui Tuan's DingTalk work group. The legal representative changed from Chen Ying to Wang Wenjing. Source: Qichacha. A Shihui Tuan supplier told Lianxian Insight frankly: "Not long ago, I heard supplier peers recommend this brand, but I don't want to cooperate with new brands; their capital chains are prone to problems. Now Shihui Tuan still owes me a payment and 10,000 yuan deposit. I've been hurt too deeply by startup platforms." As the community group buying war deepened, Shihui Tuan faded from the market. This outcome was expected by most Shihui Tuan employees, who believed that "the frontline staff have been disbanded, like a ship now only a shell, making it almost impossible to return to the battlefield." Another mid-level manager said to Lianxian Insight in August last year: "If we can't kill the enemy, we can only endure slowly." In the end, Shihui Tuan did not survive until a new spring in its community group buying business. The scattered managers have now gone to start their own businesses. Source: Lianxian Insight (ID: lxinsight) Author: Zhang Fei Are you "watching" me?