---
title: "Subsidies Cancelled, Warehouses Closed: Shi Huituan's Chen Ying's Internal Letter: Shi Huituan Merges with Alibaba MMC"
description: "Shi Huituan, one of the 'old three groups' in community group buying, is undergoing strategic contraction, cancelling subsidies and closing warehouses in several cities. Founder Chen Ying's internal letter announces integration with Alibaba MMC in some regions, aiming for sustainable development and supply chain upgrades."
author: "New Distribution"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2021-08-21"
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# Subsidies Cancelled, Warehouses Closed: Shi Huituan's Chen Ying's Internal Letter: Shi Huituan Merges with Alibaba MMC

> Shi Huituan, one of the 'old three groups' in community group buying, is undergoing strategic contraction, cancelling subsidies and closing warehouses in several cities. Founder Chen Ying's internal letter announces integration with Alibaba MMC in some regions, aiming for sustainable development and supply chain upgrades.

**Click to read the original article for details**
“ _**_**_****_**_**_
_**A general's success leaves a trail of bones; those who remain are remembered, those who fall become stepping stones.**_
”
Times have changed, and the earliest players in community group buying are almost all reinventing themselves.
Facing the vicious cycle brought by massive capital's strong impact on the community group buying industry, and the country's determination to overhaul the entire internet ecosystem, players at the top are feeling the chill of high places.
**After Tongcheng Life exited, Shixianghui stepped down, and Chengxin Youxuan weakened, Shi Huituan, one of the 'old three groups,' has begun strategic contraction, with cancelling subsidies becoming a unified signal!**
Starting at 3 PM the day before yesterday, suppliers in some cities of Shi Huituan received notices that local grid warehouses would soon cease operations.
"First, suppliers in Changchun received a notice at 3 PM on August 19 that Shi Huituan's grid stations would soon close. Then around 6 PM, Shi Huituan's Nanning grid station also sent the same message.
**Shi Huituan's Qingdao station notified on August 21 that it would officially close the city on the 22nd. Additionally, Jinan and Jining businesses will merge. Zhangzhou, Fuzhou, Harbin, and several other cities will also soon cease operations.** "
According to industry insiders, although Shi Huituan's city closures and warehouse withdrawals were sudden, there were signs beforehand. At this stage of the game, cancelling subsidies has become a unified 'signal flare' for retreat.
A few days earlier, Shi Huituan had already cancelled subsidies in Nanning and Qingdao, and suppliers already felt the storm approaching.
However, the areas Shi Huituan closed this time are basically tail-end cities with fewer orders, because Shi Huituan's main battlefield is in the two Hu provinces plus Jiangxi and other core regions. Once it gains sufficient market share, the possibility of profitability is high, so cutting cities with high loss rates to slim down may not be a bad strategic adjustment.
Compared to other platforms' large-scale, regional business closures, Shi Huituan selectively closed some cities.
For example, in Guangxi, only Nanning was closed, while Guilin remains; in Shandong, Qingdao was closed, while Jinan and Jining businesses were merged.
Moreover, unlike the previous failed startup platforms that secretly fled, Shi Huituan publicly notified suppliers, group leaders, etc., for settlement of accounts.
This morning, Shi Huituan founder Chen Ying released an internal letter titled 'A Self-Reform Focusing on Long-Term User Value,' announcing several strategic plans for the second half of community group buying.
In the internal letter, Chen Ying stated that Shi Huituan will reform regional warehousing and distribution, group leader operations, and will integrate with Alibaba MMC in some regions.
On the supply chain side, various partners, including the Alibaba ecosystem, will be connected to Shi Huituan to enhance its supply chain capabilities.
**The following is the full text of the internal letter:**
Dear Shi Huituan partners,
Remember on July 4, we held an all-hands meeting themed 'Organizational Reform.' Fierce competition has forged our team's strong combat effectiveness. The courage to self-reform and persist in long-term improvement is the driving force for Shi Huituan's continuous growth.
Looking back at this time last year, with our precise group leader operations and supply chain efficiency over two years since establishment, we quickly achieved a balance of cost, experience, and efficiency, and rapidly reached positive profit margins. It was also during this period that more players and capital flooded into the community group buying track, sparking a subsidy war that disrupted the development rhythm of the entire industry. To cope with competition, we also temporarily gave up profitable growth and focused on expanding territory. Over the past year, Shi Huituan accelerated its pace, significantly speeding up city expansion, and sales data highs were constantly refreshed.
However, facing rising data and increasingly abundant funds, under the company's high-speed operation, we should more rationally view the development of the entire community group buying industry. This cause we are determined to pursue long-term to achieve the goal of 'inclusive retail,' and this field that should have entered a healthy development stage is now showing an unhealthy state due to disturbances such as the previous subsidy war.
Standing at the beginning of the second half of community group buying, we must self-reform, abandon impetuousness and short-sightedness, return to the essence of business, and carry out comprehensive business upgrades.
\- Recently, Shi Huituan will integrate with Alibaba MMC in some regions, sharing resources in operations, complementing advantages, collaborating as a team, exploring the community group buying model, and bringing users a better and more convenient service experience.
\- On the supply chain side, deep access from various partners, including the Alibaba ecosystem, will help Shi Huituan open up more high-quality fresh produce and daily chemical supply resources, upgrading the product mix for users while further enhancing Shi Huituan's own supply chain capabilities.
\- In the short term, in some business areas with lower efficiency, we will carry out bold reforms. In regional warehousing and distribution, group leader operations, etc., Shi Huituan and Alibaba MMC will combine their regional advantages for organic integration, creating their own unique strengths.
Standing at the second half of the community group buying industry, we must shoulder the mission of healthy and sustainable development, with independent development as the premise and multi-party collaboration as the strategy, to jointly build a rational, healthy, orderly, and trustworthy community group buying industry ecosystem, and make unremitting efforts to achieve the long-term vision of 'inclusive retail.'
Where the heart goes, ask not east or west. Let us ride the wind and waves, and move forward with passion!
Longma
August 21, 2021
**Final Thoughts:**
Previously, due to the entry of giants, Shi Huituan's business in various provinces had been impacted to varying degrees, with tight cash flow. After being punished twice by the State Administration for Market Regulation this year, internal morale at Shi Huituan was also affected.
Additionally, in early July this year, industry rumors said that Shi Huituan's latest round of financing had started and was about to be completed. According to the plan, **Shi Huituan hoped to secure about $1 billion in this round and seek a post-investment valuation of nearly $5 billion. After this battle, everything has become uncertain.**
Currently, the winter for startups continues, and the only two remaining leading startup platforms, Xingsheng Youxuan and Shi Huituan, can only watch themselves fall into this vortex.
**Community group buying is still undergoing reshuffling.**
**PS**: From September 23-25, 2021, the 2021 (4th) China FMCG Conference hosted by New Distribution will be held in Shanghai. **Focusing on industry trends + practical cases + growth connections** , **3000** FMCG practitioners will gather at the event.
10 themed forums covering **new retail O2O, community group buying, short video live e-commerce, distributor transformation, rise of new consumer brands, new wine and beverage interpretation, distribution B2B supply chain, omni-channel marketing, B2B2C new technology applications** , etc., with operators from various segments bringing the latest case studies.
Confirmed heavyweight guests so far include: **1. Tao Shiquan, founder of Jiangxiaobai; **2. Yao Xuhong, general manager of Meiyijia Holdings Co., Ltd.; **3. Lu Xiuqiong, global expert partner at 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. Yang Shun, COO of Lipton Greater China; **9. Zhang Yipeng, general manager of Kuaishou E-commerce SKA Brand Operations Center; **10. Li De, e-commerce general manager of Gold Hong Ye Paper Group**....**
**A grand event for FMCG professionals, you must be there!**
**Are you 'watching' me?**


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