---
title: "From Chengxin Youxuan to Shihui Tuan: The Strategic Move of \"Regional Adjustment\""
description: "This article analyzes the recent regional adjustments by community group buying platforms like Chengxin Youxuan and Shihui Tuan, arguing that these are strategic moves rather than signs of industry decline. It emphasizes the importance of having a base market and distinguishes between capital-backed platforms and the broader community group buying sector."
author: "李保林"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2021-08-27"
language: "en"
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# From Chengxin Youxuan to Shihui Tuan: The Strategic Move of "Regional Adjustment"

> This article analyzes the recent regional adjustments by community group buying platforms like Chengxin Youxuan and Shihui Tuan, arguing that these are strategic moves rather than signs of industry decline. It emphasizes the importance of having a base market and distinguishes between capital-backed platforms and the broader community group buying sector.

**Click to read the original text for details**
Recently, the heat around community group buying has been high, with news coming in waves. From the nationwide organizational restructuring of Chengxin Youxuan and layoffs in some regions, to the collapse of Tongcheng Life and Shixianghui, and the recent big news about Shihui Tuan, it can be said that news about community group buying has poured down like the heavy rain in Zhengzhou on July 20, leaving everyone from the top to the bottom at a loss. Major media outlets, based on their own understanding and knowledge, have come out with wave after wave of pessimistic information about community group buying.
Community group buying is an emerging industry, and the number of practitioners is not yet large enough. Coupled with the fact that capital-backed groups are not speaking out, many people who are not clear about the situation are spreading the word everywhere that community group buying is on its last legs.
Some industry insiders have also been speaking out, calling for a rational view of these events, but in the face of the surging flood, many people in the game truly understand what it means to be unable to distinguish between different opinions. Therefore, this short article hopes to bring you some insight.
Whether it's Chengxin Youxuan, Shihui Tuan, Meituan Youxuan, or Duoduo Maicai, why is it said that regional adjustment is a strategic move? Because they are not over yet; for operational needs, it is a strategic adjustment. If they were over, it would not be a strategic adjustment; closing warehouses would mean bankruptcy, like Tongcheng Life and Shixianghui.
Since it is a strategic move, it means that these adjusted platforms are not over yet and are still operating normally. It's just that some regions cannot meet the company's expectations, or are losing money, so they are making phased adjustments. If that's the case, there is no need to make a fuss. Does regional adjustment mean that community group buying is not working? This question needs to be sorted out. Currently, the platforms undergoing regional adjustment are all capital-backed platforms, which is why they attract attention and speculation.
There are two issues here: **First, whether capital-backed groups can represent the community group buying industry; second, what these capital-backed groups will do next.** Undoubtedly, these capital-backed groups are the leaders of the industry and the main force on the track, but to say that the community group buying track is just these capital-backed groups is obviously a stretch. Community group buying started in 2017, and after three and a half years, crossing three stages, it has now reached the post-era. It can be said that the entire track has undergone earth-shaking changes.
At the same time, it has evolved into **community e-commerce (specifically referring to capital-backed groups), community group buying (specifically referring to local groups), community group buying, new store commerce, community group wholesale, etc.** A large number of segmented business forms. Community group buying belongs to community retail, a localized business. Even if the capital-backed groups have large volumes, their overall share is still very small.
Capital-backed groups entered the game in April 2020, rose to prominence in October, and began to have problems in June 2021. During this period, they used capital to conquer cities and territories, and the small and medium players on the entire track were in dire straits.
Even so, some evolved local groups, focused and innovative community group wholesale, awakened and self-rescuing new store commerce, and deeply cultivated private domain community group buying have all shown vigorous vitality and dazzling performance.
**Therefore, it cannot be said that if capital-backed groups are not doing well, community group buying is not doing well; moreover, capital-backed groups have not been completely wiped out, and it is only regional adjustment.** Will capital-backed groups shut down or go bankrupt next? We need to first see who is left among capital-backed groups. Currently, only **Chengxin, Meituan, Duoduo, Xingsheng, Shihui Tuan, Jingxi Pinpin, and Hema Market** remain.
Xingsheng started with Capital Today and has deep ties with JD.com; Shihui Tuan is the leader and follower of Alibaba's four rounds of financing. Strictly speaking, these seven capital-backed groups are the biological or adopted sons of China's current popular internet giants and small giants. Whether they will shut down or go bankrupt next depends on **first, national policy; second, business model; third, strategic intent; fourth, operational capability.** Since December 2020, the state has tightened industry supervision, which is a fact. But is the state's intention to cancel community group buying?
From various levels, it is clearly not. What the state strictly regulates and opposes is monopoly and the disorderly expansion of capital, not community group buying. On the contrary, it advocates and supports business innovation and mass entrepreneurship. These are two different concepts. If capital-backed groups do not create monopolies and do not use capital power to dump at low prices and expand disorderly, the state encourages and supports them. This must be clearly understood.
The community group buying business model is known as the third-generation e-commerce and the third commercial retail revolution, and it has demonstrated the advanced nature and superiority of its productive forces and production relations. This has also been proven in practice, which is an important reason why internet giants and small giants are frantically entering community group buying regardless of cost. The community group buying model is a supply-side reform in the commercial circulation field and an optimization and innovation on the consumption side. I won't go into more detail here.
**Any first-level core business of an internet giant has clear, important, and long-term strategic planning and main purpose, and the community group buying project is no exception.** Currently, community group buying is a first-level business center within each giant's internet system, with important personnel serving as commanders. This shows that in the short term, if there are no force majeure factors, it will not easily die halfway. This is path dependence and also strategic necessity. In fact, **operational capability is the biggest variable factor in whether capital-backed groups shut down or not.** The nationwide adjustment of Chengxin and the closure of warehouses and withdrawal from some cities by Shihui Tuan are largely related to this key point of operational capability. It is true that capital-backed groups have money, but they cannot withstand a business that requires spending money everywhere and spending big money for a long time. **Capital** projects look at the business model in the early stage, operational performance in the middle stage, and market share in the later stage.
Currently, community group buying has entered the post-era. To a certain extent, neither Chengxin Youxuan nor Shihui Tuan have met capital's expectations in operational performance, and there are gaps in financing and investment. Therefore, market adjustment is inevitable. So there is no need to be anxious.
What is the underlying logic of regional adjustment? The market adjustments of Chengxin Youxuan and Shihui Tuan, strictly speaking, are **a change in the cognition of the operators, which belongs to the category of operations.** In the first half of the year, from the national level to the market level, from the capital level to the operational level, a series of events occurred in community group buying, which had a significant impact and cognitive judgment on every practitioner, especially decision-makers. It is also a normal phenomenon to adjust the execution form around operational content. In the post-era of community group buying, national industry supervision has become stricter, financing thresholds have increased, and it is unrealistic to end the battle in the short term. Preserving supplies for the winter, the highest strategy is to stay at the table, improve quality and reduce costs, and increase revenue and reduce expenditure are important topics for all capital-backed groups.
Cognition is influenced by environment, genes, circles, ambition, character, and pattern, and can change decisions.
**Everyone is very clear about how much rice is in the pot. Any form is superfluous in the face of survival strategy. Community group buying is a localized business, which is also my consistent proposition.**
Community group buying integrates retail, e-commerce, and social networking. It cannot be simply understood according to e-commerce or replicated according to the e-commerce path. This has been proven in practice. Wide market coverage does not mean strong market operation. Closing warehouses and withdrawing from cities is the best proof. **In today's special period of community group buying, I think it is the most correct thing for capital-backed groups to shrink the front and return to the base market.**
Any platform, as long as it has a base market, shows that its business policy is correct, it will not leave the table, it has the opportunity to start a prairie fire, and it has time to prove that the future is valuable. Without a base market, no matter how vast the region, it is like a poor person with empty walls, a wandering guerrilla without a fixed place, and a gust of wind will make it a flash in the pan. With one province, you are a local snake; with 2-3 provinces, you are a feudal lord; with 5-8 provinces, you are a prince; with more than 10 provinces, you are a leader. For a community group, that is enough! So **to judge whether a capital-backed group is doing well, you should look at whether it has a base market rather than regional adjustment.**
**In conclusion:**
The new infrastructure of community group buying has been completed. With 1 million+ group leaders and 300 million+ people, it is destined to divide the retail world into three parts with supermarket circulation and platform e-commerce.
Capital-backed groups are just a wave in the long river of commercial history. Even the brightest wave cannot resist the heroism and trend of the rolling Yangtze River flowing eastward. Only by believing can you see, not by seeing can you believe. Here is a doggerel for you to savor freely.
**Supermarkets fall, group buying is full; Capital stops, regions move. Is the second spring of community group buying far away?**
***From September 23 to September 25, at the upcoming 2021 4th China FMCG Conference, New Distribution has specially invited the author of this article: Mr. Li Baolin, a practical expert in community e-commerce and advocate of group brands and new retail, to share "10 New Changes in the Post-era of Community Group Buying". Interested friends must not miss it!**
**PS**: From September 23 to 25, 2021, the 2021 (4th) China FMCG Conference hosted by "New Distribution" will be held in Shanghai. Some of the confirmed heavyweight guests so far are: **1. Tao Shiquan, founder of Jiangxiaobai; 2. Yao Xuhong, general manager of Meiyijia Holdings Co., Ltd.; 3. Lu Xiuqiong, global expert partner of Bain & Company and former vice president of marketing for Coca-Cola China; 4. Chen Xiaodong, senior vice president of Nestlé Greater China; 5. Zhang Fujun, president of Lee Kum Kee Sauce Group China; 6. Bi Chaojiao, general manager of China Resources Snow Breweries (China) Marketing Center; 7. Yang Hongbin, vice president of Junlebao Dairy Group; 8. Zhang Yipeng, general manager of Kuaishou E-commerce SKA Brand Operations Center; ....**
**A grand event for FMCG people, you must be there!** _****_
**Are you "watching" me?**


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