Source丨Lingshou ID丨lingshouke
Taocaicai Withdraws from Community Group Buying
Taocaicai's next-day pickup service has been quietly replaced by a delivery-by-courier model. On the evening of March 25, users nationwide received notifications on the platform.
Xiao Nan, a group leader in Chengdu, told the author that despite earlier rumors that Taocaicai would close by mid-year, the speed of this adjustment still caught people off guard. "The driver told us when delivering at night, and that's how we found out about the change. We knew less than an hour before the users did."
In fact, as early as May 2023, Alibaba began a systematic restructuring of its community group buying business. First, Taocaicai and Taoxianda were merged into Taobao Maicai, and then Taoxianda was given a separate entry point. What seemed like fine-tuning was actually a gradual downsizing.
Now, Taocaicai's next-day pickup service has been completely replaced by the courier model. Many group leaders couldn't help but say directly: "This should be a nationwide shutdown; it won't restart."
According to the platform announcement, users can still browse and order products through the "Taobao Maicai - Farm Direct Channel," with orders delivered to their homes via courier, while orders already placed under the previous next-day model remain unaffected. This transition arrangement appears smooth, but the subtext is intriguing—Taocaicai is completely shedding its community group buying label.
In fact, there were signs of this earlier. Last December, Taocaicai began closing pickup points in Nanchang and other places, and at that time, some were already speculating how much longer the business could last.
"Now Taocaicai only has the courier business; it takes three to four days for an order to arrive. The previous model of local distribution and next-day delivery is gone. Now that it's courier, Taobao doesn't need to hire people, so there's no cost, but the order volume is pitifully low—just three to five orders a month. I closed my own pickup point half a year ago," said Fang Chao, a group leader from Liaoning, to the author.
Over the years, he tried several community group buying platforms, including Xingsheng Youxuan, Meituan, Duoduo Maicai, and Taocaicai, and only Meituan and Duoduo Maicai remain.
"When Xingsheng Youxuan contracted, I couldn't withdraw a single cent of commission, losing a few hundred yuan for nothing. Taocaicai was also bad—too few products, completely uncertain delivery times, and ridiculously low commissions. Now only Meituan and Duoduo are passable: Meituan has higher commissions but fewer orders, while Duoduo has more orders but lower commissions. The quality of fresh produce has improved recently, but you still need to be careful with imitation-brand daily necessities," he admitted. This situation forces group leaders to weigh options across multiple platforms and choose partners with relatively higher returns.
Competition between platforms is not only reflected in commissions and order volumes but also in delivery times, creating a clear gap.
Meituan Youxuan and Duoduo Maicai have a next-day delivery cutoff of 11 PM, while Taocaicai can only manage 10 PM. This one-hour difference, though seemingly trivial, could be a key factor for users when choosing a platform. Moreover, in terms of market share, Taocaicai lags far behind these two giants, making it difficult to compete effectively.
In fact, Taocaicai's adjustment is not hard to understand. Alibaba's main business is e-commerce, and community group buying, as a peripheral business, has been sinking deeper into losses, with resource investment and returns completely disproportionate. Facing fierce competition in its main battlefield, Alibaba has called for "focusing on core business," and community group buying naturally became the first to be abandoned.
Some industry insiders speculate that Taocaicai did not shut down directly but instead switched to a courier-to-home model, retaining the entry point, clearly to make full use of existing traffic resources.
The Plight of Suppliers
"The market is tougher than we previously expected." This is how Meituan founder Wang Xing frankly described the current state of community group buying during a conference call, also revealing the long-standing difficulties of this track.
Meituan's financial data supports this view. Over the past five years, Meituan's new business segment has been in a state of huge losses. From 2019 to 2023, its operating losses reached 6.7 billion yuan, 10.9 billion yuan, 38.4 billion yuan, 28.3 billion yuan, and 20.2 billion yuan respectively, with cumulative losses as high as 104.5 billion yuan.
The root of the problem lies in high operating costs. On the surface, the community group buying model is not complex, but it actually involves multiple links such as procurement, sorting, warehousing, platform operations, distribution, and customer service, each requiring substantial resource investment. However, when the platform is unable to increase the average order value, the loss pit becomes increasingly difficult to fill.
To turn the situation around, platforms have to re-examine their operating models. By compressing inefficient and extensive management in the supply chain, they attempt to find savings in every detail. The goal is clear: control costs, reduce losses, and ultimately achieve a shift to profitability.
But all this comes at the cost of increasing pressure on participants. "Platforms must continuously reduce logistics and warehousing expenses, while requiring delivery teams to improve efficiency, reduce cargo damage, and even work year-round without rest, just to slightly alleviate losses," an industry insider told the author.
Thus, cost pressure is ultimately passed on to all participants. Suppliers are required to provide lower-priced goods, drivers' freight fees gradually shrink, and distributors' profit margins become narrower.
Guo Peng, a fruit supplier from Shandong, has deep feelings about this. Since 2021, he has been supplying apples to mainstream community group buying platforms and signed exclusive sales agreements with them. To ensure product quality, the platforms even sent procurement and quality control personnel to the production area for guidance.
But entering this year, Guo Peng has gradually reduced the proportion of his community group buying business.
"Cooperating with community group buying platforms means you have to keep lowering prices, even forcing sales to make the data look good," Guo Peng admitted. As a source producer, he cannot bear the additional costs from inventory backlog, cargo damage, or returns and exchanges, and the pressure on his capital chain has forced him to gradually reduce investment in community group buying.
Xia Xia, a supplier of fast-moving consumer goods, has a similar experience. Since entering the community group buying track in 2020, his company achieved daily sales of over a thousand items on multiple platforms. However, as platforms gradually increased gross margins and reduced merchant subsidies, his profit margins shrank sharply. Eventually, Xia Xia also chose to gradually exit this field. "This model is becoming increasingly unsustainable for suppliers," he said.
The current community group buying ecosystem is like a "besieged city." Suppliers inside gradually want to leave, while those outside are still "eager to try" and want to become part of it.
An agricultural product supplier deeply involved in community group buying told the author that he is cautious about the future of the two remaining major platforms. "The situation in 2025 is likely to be even more severe. Overall traffic has barely changed compared to the second half of last year. Some platforms that were once stable and had decent profit points are now making it extremely difficult even to submit products for review."
This supplier mentioned that in February this year, he tried to submit several products to a leading community group buying platform that had stable sales on other platforms, but almost all warehouse procurement teams rejected his applications. "I submitted to 20 warehouses, and not one passed."
He further explained that the leading platforms' strategies have become more stringent, prioritizing branded products or white-label goods that the platform desperately needs. For ordinary suppliers, the difficulty of entering this system is increasing.
From suppliers to platforms, every link in community group buying is under multiple challenges from resource competition, profit shrinkage, and operational pressure.
The Future
The ebb of community group buying is no longer an isolated phenomenon. Even Duoduo Maicai, under Pinduoduo, is rumored to have its entry position on the Pinduoduo app homepage possibly downgraded to free up resources for the "Billion Subsidy" program.
The giants' calculations are clear: resources must be concentrated in more promising areas, and peripheral businesses, even if they can continue operating, are destined to take a back seat.
Looking at Meituan Youxuan, news of city withdrawals and warehouse closures is common. Group leader Xiao Nan revealed to the author that since October last year, Meituan Youxuan's order volume has halved. He speculated that this might be related to Meituan's app reducing recommendations for the Youxuan business.
This is reflected in the data. Financial reports show that Meituan's new business revenue in the fourth quarter of 2024 was 22.92 billion yuan, a year-on-year increase of 23.5%, but a quarter-on-quarter decrease of 5.3%. Notably, this includes Keeta's rapid growth in Saudi Arabia. Clearly, Meituan's management has begun to bet on Xiaoxiang Supermarket as a key project to replace Meituan Youxuan.
In fact, as early as last year, Meituan significantly contracted its strategic direction for new businesses. In particular, Meituan Youxuan no longer pursues scale expansion or market share, but instead shifts to reducing losses and improving efficiency. Subsidies are gradually being cut, and the status of community group buying is no longer what it was. This may also indicate that Meituan has lost its early expectations and patience in this track.
For "veterans" who were deeply involved in Meituan Youxuan, such an outcome is not surprising. Some industry insiders even bluntly state that Meituan Youxuan's business will eventually be gradually marginalized.
Supplier Guo Peng believes that this marginalization trend has already emerged, but he also expressed his concern: "If Meituan Youxuan really falls, the capital-backed groups will only have Duoduo Maicai left. This is undoubtedly a bigger blow to merchants. I hope Meituan Youxuan can revive and leave some competitive space for the market."
However, Duoduo Maicai's situation is not entirely smooth either. Guo Peng said that although overall order volume may be lower than in 2024, Duoduo Maicai remains an important sales channel. Whether for clearing excess inventory or selling low-priced goods, Duoduo Maicai, with its scale and traffic advantages, can still provide suppliers with some profit margin. As long as prices are competitive enough, suppliers still have opportunities to profit.
Meanwhile, JD's Pinpin, from outside the city, is re-entering the battlefield with a massive investment of 20 billion yuan, attempting to seize market share by laying out local life services and same-city instant retail. Many suppliers are also waiting on JD Pinpin's official website for city openings, anticipating the opportunities brought by the new business.
The transformation of Taocaicai may be an isolated case, but it is more likely a microcosm of the entire industry's changes. Those projects once full of ambition now only have struggling figures and gradually dissipating warmth. The story of community group buying may be drawing to a close, leaving only the footsteps of capital and the sighs of suppliers.