On December 7, industry sources said JD.com's new channel business unit, community group buying business unit, and 1号店 business, as well as the original JD Mall marketing department, were all integrated into the new Jingxi business group. Recently, a Times Weekly reporter exclusively learned that JD.com has initiated the acquisition of Meijia Maicai, a sub-brand of the fresh e-commerce platform Meicai. A source close to Meijia Maicai's senior management confirmed the news to the reporter. However, the acquisition amount is currently unknown, with industry insiders predicting it will not exceed $200 million. According to public data, Meijia Maicai is a community group buying platform, meaning it operates on a community basis, where mothers or store owners become group leaders, organizing community residents to buy in groups online via WeChat groups and mini-programs, with offline delivery and self-pickup, and the platform provides procurement, logistics warehousing, and after-sales support. It is worth noting that the acquirer JD.com is also actively preparing its community group buying business. Previously, media reported that at JD.com's executive morning meeting on Monday (November 30), JD.com Group Chairman Richard Liu said he would personally lead the team to strengthen JD.com's community group buying business. Currently, JD.com has consolidated its community group buying businesses Youjia Puzi, Ququ Gou, and JD Ququ Gou, and has set up a dedicated community group buying business unit under the JD Supermarket Omnichannel Business Group, led by Shao Hongjie. A Times Weekly reporter learned that Shao Hongjie was previously the business head of the JD Ququ Gou project and is a sixth-generation management trainee at JD.com. In 2013, after Richard Liu personally approved and named "JD Ququ Gou," he personally led Shao and several other JD management trainees to form a unique small team to promote the business. Prior to this, a Times Weekly reporter learned from a headhunter that JD Group's Jingxi business unit was also vigorously recruiting for various positions in the community group buying business, with candidates mainly coming from internet companies like Meituan and Pinduoduo that have laid out community group buying businesses. And today, industry sources say JD.com is accelerating organizational reform. Most notably, Jingxi, which targets lower-tier markets, has just completed a round of adjustments, upgrading from a business unit under the original retail group to a business group directly. The new channel business unit, community group buying business unit, and 1号店 business under the original JD Retail Group's Supermarket Omnichannel Business Group, as well as the original JD Mall marketing department, have all been integrated into the new Jingxi business group. JD.com declined to comment on this matter. -01- From B2B to B2C It is reported that Meicai was founded in 2014 and is a well-known B2B fresh supply chain enterprise, mainly engaged in food ingredient distribution as its B2B business. Meijia Maicai was upgraded from the original community group buying project Meijia Youxiang and is a professional community group buying platform under Meicai, mainly engaged in direct-to-consumer B2C business, launched in June 2018. According to Tianyancha data, the operating entity of Meijia Maicai is Beijing Meixian Technology Co., Ltd., a wholly-owned subsidiary of Meicai, and both companies are affiliated with Hong Kong Yunshen Technology Co., Ltd. A Times Weekly reporter also learned that when community group buying first emerged in 2018, Meijia Maicai's predecessor, Meijia Youxiang, and Squirrel Pinduoduo were among the earliest platforms to expand business in China. At that time, the general manager of Meijia Youxiang, Chen Shilong, was the third employee of Meicai. Meijia Youxiang started by acquiring several small community group buying businesses in North China, based on a scale of over a dozen cities, and was reported to have received huge financing three months later. It developed rapidly, with DAU and other data leading among the top community group buying companies at the time. On April 13, 2019, the Meijia Maicai mall opened on the Meijia Youxiang mini-program, and the offline vegetable purchasing channel changed from group buying to pre-sale, mainly using a front-warehouse model, with Beijing as its first city, and the community group buying model began to take shape. On May 20, 2019, Meijia Youxiang was officially upgraded to "Meijia Maicai," aiming to focus more on family meals, no longer emphasizing the "group buying" concept, moving closer to internet grocery shopping, and combining community group buying and grocery attributes. Regarding the reason for launching Meijia Maicai, an insider said, "Meicai is a unicorn in the B2B field and has always wanted to do B2C business. After looking at many models, Meicai finally decided to do the community group buying project Meijia Youxiang." A supplier close to Meijia Maicai analyzed that Meicai has agricultural supply chain resources but lacks online B2C traffic. Meijia Youxiang serves as an entry point for Meicai to obtain C-end traffic, and choosing grocery shopping as the main focus is precisely due to traffic requirements. Founder Liu Chuanjun also once said frankly, "Meicai is a supply chain enterprise." In his view, the logic of B2B and B2C is different: "B2C subsidies are for acquiring traffic, while B2B must rely on services to retain users." Additionally, according to a report by Ebrun, Meicai once received nearly 1 billion RMB in investment, possibly from its early investor Shunwei Capital. According to insiders, this round of financing was mainly used for the layout of its community group buying project Meijia Youxiang. Therefore, in the early days of the Meijia Youxiang project, it received high attention from Lei Jun, chairman of Shunwei Capital and chairman of Xiaomi Technology, and Meicai CEO Liu Chuanjun. Lei Jun personally presided over relevant meetings that year, and the decision to have Meicai invest heavily in Meijia Youxiang was a major direction set by Liu Chuanjun and Lei Jun in meetings. Lei Jun mentioned at a joint meeting with Meicai that they should "All in Meijia Youxiang." Lei Jun himself also publicly stated, "The rural internet industry is our most core investment field in the next ten years." -02- How to Complement Each Other After the major reshuffle in the community group buying industry in 2019, Meijia Maicai became one of the few "surviving" companies. Meijia Maicai CEO Wang Tianye recently stated that the platform has covered about 31 provinces and cities, serving over 20 million users, with total revenue of about 2 billion RMB in 2019. According to the Aladdin Mini-Program Index for June 2020, in the community group buying track, the top five platforms were Xingsheng Youxuan, Shihuituan, Meijia Maicai, Shixianghui, and Tongcheng Life. Among them, except for Meijia Maicai, which is backed by Meicai, the other four are backed by internet giants: Xingsheng Youxuan, Shixianghui, and Tongcheng Life are backed by Tencent, and Shihuituan is backed by Alibaba. As internet giants have frequently announced their entry into the community group buying track this year, leading community group buying startups such as Xingsheng Youxuan, Meicai (parent company of Meijia Maicai), and Shihuituan have successively experienced talent attrition and performance damage. According to multiple former employees of Meijia Maicai who tipped off Times Weekly reporters, about 40% of Meicai's warehousing and distribution personnel and 60% of its quality control employees were poached by other leading community group buying platforms such as Didi's Orange Heart Youxuan and Baoneng, or left. Not only that, news of Meijia Maicai gradually closing cities began to occur frequently in the second half of this year. A Times Weekly reporter learned that November 25 was the last day of Meijia Maicai's delivery in Changsha, with suppliers being notified in advance to clear goods and refund deposits, while in many cities such as Guangzhou, its related businesses had already been closed. Industry insiders analyze that for the new entrant JD.com, acquiring the veteran community group buying player "Meijia Maicai" and building its own community group buying platform may be its best choice to catch up with other giants. For Meicai, selling the C-end project "Meijia Maicai," which currently has little profit potential, to JD.com may alleviate the current dilemma of talent attrition and frequent business retreats. According to data from the China Electronic Commerce Research Center, among more than 4,000 fresh e-commerce entrants, 4% broke even, 88% suffered losses, and the remaining 7% suffered huge losses, with only 1% achieving profitability. Meicai CEO Liu Chuanjun publicly revealed at the end of last year that Meicai was still in a loss-making state but had good cash flow, expecting to achieve profitability by the end of 2020 and achieve large-scale profitability in 2021. However, industry insiders believe that due to the impact of the epidemic this year, Meicai's 2020 profitability plan may change, and selling Meijia Maicai to JD.com would be greatly beneficial to Meicai itself. A veteran community group buying practitioner told a Times Weekly reporter that the entry of giants into community group buying has also caused significant operational pressure on platforms such as Tongcheng Life and Shixianghui. It cannot be ruled out that under capital promotion, there will continue to be opportunities for mergers and reorganizations in the track in the future. Source: Times Weekly, Author: Zhou Yi If a tip is adopted, a reward of 400-2000 yuan will be paid. 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