Click the image above for details Source: Paidao.com (ID: paidaiwang) Author: Nuomiao Chaoren On July 22, community group buying platform "Xingsheng Youxuan" completed a Series C+ financing of approximately $800 million, led by KKR, with participation from Tencent, Sequoia Capital China, Tianyi Capital, and others. After this round, Xingsheng Youxuan's valuation reached $4 billion. According to sources, this round will be the last before Xingsheng Youxuan's IPO, after which it will launch its listing plan. Xingsheng Youxuan has raised over $1 billion in total across previous rounds. In 2019 alone, it completed three rounds of financing, with Tencent participating in its A+ round in May 2019 (amount undisclosed). After two rounds in mid-2019, its valuation reached $1 billion. Another community group buying platform, Shihuituan (invested by Alibaba), also secured two rounds this year. In January, it raised $88.3 million in a Series B round, with Alibaba participating again. In May, it completed an $81.4 million Series C1 round led by GGV Capital, with Joy Capital, Qiming Venture Partners, and others following. Recently, Meituan Dianping established a Youxuan business unit, officially entering community group buying. The business is led by Senior Vice President Chen Liang. Meituan announced that the unit will launch "Meituan Youxuan," a community group buying service based on community convenience stores, using a "pre-order + self-pickup" model. Is community group buying a new battlefield in the new retail landscape? -01- The Hundred Regiments War of Community Group Buying Community group buying emerged in 2016 with a simple process: platforms recruit community residents as group leaders to create WeChat groups. Leaders leverage their social connections to invite neighbors, post discounted products daily, and members order via mini-programs within the group. This is the simplest model. Unlike food delivery, community group buying typically involves users ordering via mini-programs and picking up goods the next day at designated points. Prices are generally lower than online or offline retail. Early platforms had several advantages. First, the backend model reduced customer acquisition costs: platforms ship in bulk to leaders who earn commissions, leveraging social networks to expand reach in a red-ocean online traffic environment. Second, leaders often have strong local networks—often stay-at-home moms, aunties, or convenience store owners—and can activate entire communities. Leaders are usually part-time, reducing labor costs. This attracted many entrants. In 2018, leading projects like Niwonin, Shixianghui, Shihuituan, Songshupinpin, and Kaola Select secured funding from tens of millions to hundreds of millions of yuan, with investors like Sequoia Capital, IDG Capital, and GGV Capital joining, sparking a second "Hundred Regiments War." The models were similar: a middleman leader aggregates scattered orders into bulk orders, offering lower prices to users and reducing supply chain losses for fresh produce. Because the model was simple and entry barriers low, the sector quickly entered a shakeout phase. In 2019, the wave of elimination arrived. The most typical case was Songshupinpin: founded in 2016, it received nearly $100 million from renowned institutions and was called a "dark horse," but within three years it collapsed due to a broken capital chain. Other fresh produce e-commerce players like Dailebu, Mini Fresh, Miaoshenghuo, and Jijixian also faced difficulties or closed in 2019 due to funding issues. Like the first "Hundred Regiments War," only a few survived by the end of 2019. -02- The Era of Three Kingdoms in Community Group Buying No one expected the pandemic to revive community group buying. During COVID-19, fresh produce e-commerce gained opportunities. According to Analysys, daily active users in the fresh produce e-commerce industry averaged 6.581 million in Q1 2020, up 104.8% year-on-year. The rise of "contactless delivery" during lockdowns revitalized the sector. Data from China Business Industry Research Institute shows: From January to May 2020, there were 11 investment events in fresh produce e-commerce, totaling 2.235 billion yuan. Platform-incubated community group buying moved to the forefront, with platforms like Xingsheng Youxuan and Shihuituan securing large funding. Benefiting from special demand, community group buying achieved a "revival." But this time, the track won't see a "Hundred Regiments War" but a "Three Kingdoms" battle among Tencent, Alibaba, and Meituan Dianping. Facing the renewed opportunity, internet giants joined the fray. Besides Tencent-backed Xingsheng Youxuan and Alibaba-backed Shihuituan, Meituan Dianping formed its own Youxuan unit, Alibaba upgraded Cainiao Post stations, and Didi launched "Orange Heart Youxuan" in June. Despite the influx, unresolved issues persist: First, potential risks: In smaller trade areas, demand forecasting is harder, leading to stockouts or unsold goods, high user demand inaccuracy, and significant waste. Second, leader instability: Leaders connect merchants and consumers. While their private traffic saves costs, they bring uncertainties like irregular work hours, poor sales skills, or even going independent. Experts suggest that beyond technology and platform capabilities, success requires three things: good relations with Tencent, sufficient confidence, and ample funding. Confidence and funding are no issue for Alibaba and Meituan, but "good relations with Tencent" is a headache. Currently, community group buying relies heavily on WeChat groups, making it hard for Alibaba and Meituan to build independent traffic pools outside Tencent's social ecosystem. For Alibaba, which has long aspired to social but failed, developing a new social app is unrealistic—so it invests in Shihuituan and relies on Cainiao Post stations. What are the advantages of each "kingdom"? -03- Advantages and Disadvantages of the Three Kingdoms For community group buying, two aspects matter: the surface-level leaders and the deep supply chain. Tencent-backed Xingsheng Youxuan's service model is similar to others (pre-sale + self-pickup), but it has an "aggressive" expansion model: it can turn any small shop—lottery stations, milk shops, even real estate agencies—into Xingsheng Youxuan outlets. This shifts customer acquisition pressure to operators, who, even without retail experience, will leverage their social networks to earn extra income, reducing Xingsheng's expansion costs. Tencent, as an investor, facilitates channel promotion, creating a closed loop. Xingsheng's essence is providing sales increments for street-side shops; leaders are not cultivated but "naturally formed." Positioning as a "side hustle" makes franchising and expansion easier, allowing rapid scaling. It also avoids several issues: Traffic—shop owners, especially long-established ones, have good networks; Property—existing shops serve as warehouses, reusing property; Model—the model cleverly sidesteps the "single-store model" problem. In this logic, Xingsheng acts as a "small shop enabler," aggregating scattered orders to gain supply chain advantages and feed back to shops. Crucially, it has rapid supply chain support for franchise orders, ensuring good B2B and B2C experiences. Moreover, Xingsheng focuses on third- and fourth-tier cities and lower-tier markets, where residents are price-sensitive and less resistant to discounts, making expansion easier. Cainiao Post stations share similar advantages. They have strong leader (station manager) trust and supply chain partnerships with Auchan and RT-Mart. However, they face two issues: location and staffing—whether residents accept community group buying and whether delivery experience translates to commercial success. Community group buying is social; leaders are key. Maintaining relationships and service quality is vital, especially during peak seasons, and adding staff raises costs. This issue also exists in Xingsheng's system: franchisees with non-retail main businesses may not invest enough effort. Despite challenges, the appeal of community group buying prevails. Cainiao Post stations partly represent Alibaba's determination to compensate for social shortcomings and tap community traffic. With Pinduoduo, Douyin, and Kuaishou rapidly attracting traffic, Alibaba seeks new traffic in various scenarios, so it won't miss this potential track. As China's largest local life service provider, Meituan will inevitably enter: it has last-mile delivery, online traffic, technology, capital, and supply chain advantages. Its "Meituan Maicai" serves first-tier cities like Beijing, Shanghai, Guangzhou, and Shenzhen; "Caidaquan" focuses on Wuhan, Chengdu, Nanjing, and other second- or third-tier cities; the new "Meituan Youxuan" fills the gap in lower-tier markets, becoming another potential traffic entry. However, Meituan's entry is somewhat late, especially in third- and fourth-tier cities where it must build warehousing and logistics from scratch, requiring resources and time. Didi, outside the "Three Kingdoms," is also expanding into community group buying. Didi is a unicorn in mobility, but that story is told; it needs new narratives. Its ventures into errands, food delivery, freight, and community group buying aim for growth. Didi's strengths are user data, product design, and internet operations experience—foundations for viral growth. But it's essentially a matching-based mobility company with limited e-commerce experience and lacks an e-commerce ecosystem. Its community group buying prospects remain uncertain. Also, stop spreading rumors about Meituan acquiring Didi. -04- Conclusion In 2016, a fruit company called "Niwonin" faced the need for immediate delivery due to fresh produce's perishability. It distributed regionally, recruiting district leaders to build a private traffic pool, with leaders earning commissions and handling customer acquisition, retention, marketing, and fulfillment, thus developing the "district leader economy" model. This model significantly reduced customer acquisition costs and improved order stability and volume. But community e-commerce requires massive upfront investment: backend challenges in selection, logistics, and warehousing; frontend challenges in store setup and instant delivery—both need systematic, scalable implementation. Small platforms lack these foundations and rely on external funding, risking capital chain breaks. Dailebu, Songshupinpin, Linlinyi, and Niwonin all fell into difficulties and closed. Though they were "predecessors" with some stable, high-value relationships, their lack of supply chain, logistics, and space allocation capabilities meant they couldn't meet sustained community shopping needs. Those focusing only on online traffic, community and leader operations, without supply chain advantages or localized services, were left behind. But post-2018 entrants are internet giants and mainstream ecosystem e-commerce platforms, meaning future competition will only intensify. These giants have rich experience in last-mile user experience, traffic economy, and order aggregation, with brand, network, data, and technology advantages. Ultimately, community group buying is a supplementary retail scenario. Both giants and individual entrepreneurs need sufficient capabilities in selection, operations, delivery, and service. Giants have traffic, capital, tactics, methods, and strategies; individuals have networks, traffic, channels, and motivation. Community group buying, as a viable option connecting both, holds great potential. Regarding trends and future, New Distribution will host two forums on "FMCG Community Group Buying Supply Chain Docking" at the 2020 (3rd) China FMCG Conference in Shanghai from August 24-26. We will invite founders, executives, and industry experts to discuss new trends and how to leverage community group buying for business growth. Interested friends, don't miss it!