---
title: "Where Will Xingsheng Preferred Go in 2022?"
description: "Xingsheng Preferred has been a key player in the community group buying sector, but its influence has waned. Given its financial constraints and the dominance of giants like Meituan, Pinduoduo, and Alibaba, the best strategy for Xingsheng in 2022 is to focus on regional markets, particularly Hunan, Hubei, Jiangxi, and Guangdong, rather than pursuing a national expansion."
author: "陈维龙"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2022-03-17"
language: "en"
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---

# Where Will Xingsheng Preferred Go in 2022?

> Xingsheng Preferred has been a key player in the community group buying sector, but its influence has waned. Given its financial constraints and the dominance of giants like Meituan, Pinduoduo, and Alibaba, the best strategy for Xingsheng in 2022 is to focus on regional markets, particularly Hunan, Hubei, Jiangxi, and Guangdong, rather than pursuing a national expansion.

********Preface**
Xingsheng Preferred has always been a significant participant in this track, and Shihui Tuan, Tongcheng Life, etc. are not comparable. Compared to giants like Meituan, Pinduoduo, and Alibaba, Xingsheng Preferred also has unique significance to this track.
So practitioners have been paying attention to Xingsheng Preferred, especially its business initiatives.
Meituan, based on a full evaluation, has a very objective and respectful attention to Xingsheng Preferred. This attention is good, but sometimes it overlooks Xingsheng's difficulties and forms an overestimation. Basically, it has achieved a strategic contempt and tactical attention.
Pinduoduo has always adhered to the spirit of internal, autonomous, and one word "do", focusing more on itself and business, not on empty talk. It does what it should do, does what it can, and just does it.
This kind of newborn calf spirit makes them not pay attention to or recognize Xingsheng's success in the national market, and they even don't think highly of Alibaba and Meituan. This disdain comes from business focus, not entirely from spiritual expansion.
Alibaba has always been self-centered. They often support their belief in self-centeredness from a global perspective and conceptual perspective, while Pinduoduo's "self-centeredness" develops from specific business details.
Alibaba is like a hegemon, because of abundant resources and a peaceful scene below, it feels that the overall situation is under control. Pinduoduo is like a latecomer, confident that it can solve this business.
Because of this spirit, Alibaba certainly recognizes Xingsheng, but this recognition is short-lived, not objective, not from the heart, because its recognition cannot be specific to details, and after recognition, it often emphasizes its own "initiatives and advantages".
Rather than saying it recognizes Xingsheng, it is more like it has to affirm Xingsheng to show itself, after all, the "initiatives and advantages" of Taocaicai are added on the basis of Xingsheng Preferred.
At the end of 2020, Xingsheng Preferred abandoned Alibaba and embraced JD.com. Being treated as a renegade by Alibaba, Taocaicai, as the successor of the renegade's business, certainly cannot face Xingsheng Preferred as Meituan does.
Anyone who has watched gangster or police films knows that when a capable person defects from the gang and sets up his own branch, the successor will never speak well of the predecessor, and all the predecessor's legacy, whether good or bad, must be changed before use.
Therefore, Alibaba's attention to Xingsheng Preferred is lukewarm, essentially paying attention but not recognizing.
Regardless of the giants' attitudes, to be honest, Xingsheng Preferred still needs attention and research. As I said two years ago, Didi and JD.com can be ignored, but Xingsheng Preferred must be watched.
However, with the change of time and battle situation, Xingsheng Preferred's influence has weakened a lot, not comparable to 2020. My judgment in 2021 was that "regionalization is the best destination for Xingsheng".
But recently some people disagree with my judgment, or disagree with my judgment on Xingsheng Preferred's strategy and goals in 2022. So this article came about.
This article will discuss Xingsheng Preferred's ending and possible strategies in 2022 from three aspects: **funds, survival space, core decision-makers**, and use Xingsheng Preferred's **historical performance** as supporting evidence.
******The Impact of Funds on Xingsheng Preferred**
**I. Why consider from the perspective of funds**
When summarizing why it could win the group-buying war, Meituan repeatedly mentioned issues such as "funds, fund utilization efficiency, and the impact of capital on business choices".
For example, Wang Huiwen mentioned that Lashou's total financing was $165 million, Wowo Tuan consumed more than $165 million, and Meituan's total financing was only $62 million, so Meituan paid great attention to input-output ratio. In terms of regional investment, it differed from competitors, with relatively less investment in first-tier cities and more in second- and third-tier cities.
This case has been repeatedly used by Wang Huiwen and Meituan people to explain that Meituan insists on doing the right thing, indicating that Meituan (and the outside world) believes that "funds, fund utilization efficiency, and the impact of capital on business choices" are key factors for victory.
I have repeatedly emphasized and used this method from 2020 to today, and pointed out half a year or a year in advance that companies like Orange Heart Preferred, Tongcheng Life, and Shihui Tuan would exit the community group buying track.
Among entrepreneurs, there is a consensus that the CEO's main responsibilities are setting direction, finding people, and finding money, nothing else. This shows the impact of funds on enterprises and businesses.
Whether it's the group-buying war, the community group buying war, or long-term experience consensus, funds are crucial to corporate decision-making. We can infer the possible business strategies and endings from the financial situation, after all, as the saying goes, "do things according to the money you have" and "taking big steps can easily hurt yourself".
**II. Xingsheng Preferred's capital and expected expenditure**
According to public media reports, Xingsheng Preferred's cumulative financing is $5 billion+ (not considering unarrived funds), about 35 billion RMB.
It is rumored in the industry that Xingsheng has 20 billion left in its account, and some say 10 billion. From other angles, the money in Xingsheng's account will not exceed 20 billion.
What can 20 billion do?
According to my estimate, Meituan has invested about 30 billion so far, and needs to invest another 30-40 billion to make community group buying successful. Alibaba's total investment is similar, and Pinduoduo will be much less.
If Xingsheng Preferred wants to compete with Meituan, Pinduoduo, and Alibaba in the national market, it needs to first invest a large sum to raise its business volume and market scope to Meituan Preferred's current level. Currently, Xingsheng Preferred is only one-third of Meituan and Pinduoduo's volume.
To reach this market volume, Meituan Preferred spent 30 billion. Assuming Xingsheng Preferred is very capable and only needs to spend another 10 billion to reach Meituan Preferred's current level, then Xingsheng has 10 billion left.
Then, the remaining 10 billion of Xingsheng Preferred needs to compete with Meituan's future 30-40 billion investment in efficiency, survive in the national market, and gain a certain market share.
Obviously, this is unlikely to be possible.
Xingsheng Preferred is indeed very capable, but in provinces other than Hunan, it doesn't have three heads and six arms, and its capital utilization efficiency will not be significantly higher than Meituan and Pinduoduo, and is likely to be worse.
Some may say can't Xingsheng Preferred raise more money? Based on my understanding of the primary and secondary investment markets, I can only say it's basically impossible. Even if money comes in, there won't be large amounts that can affect the business.
Therefore, Xingsheng Preferred cannot follow the same national strategy as Meituan and Pinduoduo; regionalization is the best destination for Xingsheng.
So, specifically for 2022 decisions, Xingsheng Preferred should return to the region, forming a regional territory supported by 20 billion to fight against the giants' national territory supported by 40 billion.
According to the capital scale estimate, Xingsheng Preferred can support at most 10 provinces. Combined with the current business foundation, returning to Hunan, Hubei, Jiangxi, Guangdong and other regions is an inevitable choice.
**III. Other factors besides funds**
Funds are not everything, but they are easy to understand and explain. Market nature, organizational capabilities, personnel and other factors are decisive for the outcome of participants.
If community group buying were a highly regionalized and fragmented market like supermarkets and convenience stores, Xingsheng would not necessarily need to return to the region.
If Xingsheng Preferred's organizational capabilities and personnel were sufficient to support the national market and exceed or match Meituan, Pinduoduo, and Alibaba, Xingsheng Preferred would not necessarily need to return to the regional market.
But these conditions do not exist.
The problem Xingsheng faces is: in various regions across the country, due to the nature of the market, it is difficult for Xingsheng to gain a firm foothold without being defeated. In terms of funds, organization, and personnel, Xingsheng Preferred cannot keep up with the giants, nor can it match the strategy of national expansion.
******Xingsheng Preferred's Strategic Survival Space**
If Xingsheng only has the market of Hunan Province, while Meituan, Pinduoduo, and Alibaba have national territories, some profitable and some not, the giants can subsidize unprofitable markets with profitable ones and slowly exhaust Xingsheng.
Even if it doesn't die, Xingsheng Preferred only has the Hunan market, which is too small in scale and influence. Whether for listing, industry influence, or government influence, it is meaningless.
This situation means the strategic survival space is too small, with no room for maneuver. If this is the ending, it is second only to Xingsheng Preferred closing down and disappearing.
As mentioned earlier, Xingsheng cannot do the national market, so Xingsheng's only path is: with Hunan as the core, form an absolute advantage region; with Hubei, Jiangxi, Guangdong and other provinces as the periphery, form a relatively balanced region.
In such a region, the strategic space is sufficient, and survival pressure is small; market share is neither too big nor too small, but enough to become a small giant; industry and government influence is not small; Xingsheng Preferred's current funds, personnel, and organization are sufficient to compete with the giants, and the feasibility is highest.
******Looking at Xingsheng's Future from Its History**
The above analysis is too abstract, not intuitive, not specific, not impactful, and only a few trained professionals can deeply appreciate it. If we reflect on Xingsheng Preferred's development experience from 2020 to 2021, we can roughly know its future.
We need to examine a question that touches the soul of Xingsheng Preferred: Why did Xingsheng Preferred fall far behind despite being in an absolute leading position?
Xingsheng Preferred started in retail and explored the community group buying model as early as 2018, and iterated to the fifth-generation logistics system in 2020. Meituan and Pinduoduo only entered the community group buying market around June 2020.
At that time, Xingsheng's advantages included:
  * Xingsheng Preferred practiced 3 years earlier than the giants, accumulating deep experience and cognition. In comparison, the middle and senior management of the giants were not even clear about "what is retail" and "what is community group buying".
  * Xingsheng Preferred accumulated the most and most formal talents and working methods in the track. Giants like Meituan were all internet talents, unclear about the working methods, processes, and even personnel quality requirements of community group buying. The giants suffered a lot in recruitment because of this, and Orange Heart's collapse was greatly related to personnel.
  * Xingsheng Preferred had the largest scale in the industry, the strongest suppliers, the most and most loyal group leaders, and the strongest brand recognition. Meituan and Pinduoduo had nothing.
If we look at June 2020, the situation was like a lion hunting a rabbit—Xingsheng Preferred was the lion, and the giants were the rabbits. In less than 2 years, the situation was reversed, Xingsheng Preferred became the rabbit, and Meituan and Pinduoduo became the lions.
Why did this happen?
Simply put, it's due to funds, organization, and personnel.
Xingsheng Preferred still has these problems, such as the funding problem analyzed in "The Impact of Funds on Xingsheng Preferred", and the organization and personnel problems are still far behind the giants.
When Xingsheng Preferred had huge advantages, these problems caused it to fall far behind.
Now, in a position of great disadvantage, with these problems still present, can Xingsheng Preferred defy the odds and overtake the giants?
Xingsheng Preferred is unable to compete with the giants for the national market, at least from a fundamental perspective. Just as Japan's successful attack on Pearl Harbor could not defeat the United States, Xingsheng Preferred hasn't even successfully attacked "Pearl Harbor".
The best ending for Xingsheng Preferred is to defend the regional market, not to pursue the national market.
******Xingsheng Preferred's Preset Goals**
Whether Xingsheng Preferred's goal for the next 3 years is to go public or survive has a profound impact on 2022 decisions.
Different goals have different impacts on the interests of decision-makers. I think survival is more beneficial to core decision-makers. From the perspective of core decision-makers' own factors, they will also tend to choose survival.
**I. Impact of different goals on the interests of core decision-makers**
Different endings for Xingsheng Preferred have different results for the founding team and shareholders.
If Xingsheng Preferred occupies Hunan, Hubei, Jiangxi, and Guangdong, and survives among the giants, although it lacks profitability and growth, its cash flow is good, and barriers are not a problem. That is, the business foundation is good, survival is no problem, but there is no story, which is not conducive to financing.
This is good for the founding team but bad for shareholders. Because such a company cannot go public or sell at a good price, shareholders' investment returns are basically wasted, unable to cash out and exit.
But the founding team can become a small giant in the industry, a benchmark enterprise in Hunan, and a guest of honor of the Hunan Provincial Party Committee because they survived among the giants and have a certain business scale.
Long-term operation will bring many benefits to the actual managers, and they can obtain many political and social resources in Hunan. These resources, after being implemented through star enterprise operations, may accumulate to billions over time.
If Xingsheng Preferred chooses to improve data, such as scale or user growth, profitability, and attempts to use short-term data improvement to prepare for listing, this is good for shareholders but bad for the founding team.
Because such a company will definitely not survive long-term, its influence in the industry and Hunan Province will gradually disappear, and those billions of benefits will not exist. The founding team can only get listing returns.
According to the valuation of Xingsheng Preferred's last round of financing, it is worth about $10 billion. According to current primary market expectations and the lag in business progress after listing, it is estimated to drop by 80%, at least half.
It is said that the founding team's equity is about 20%, meaning after listing, the founding team may get $400 million to $1 billion in stocks. If they cash out, cash income will further decrease. This result is likely not better than the first situation.
In this case, shareholders entering at different times will get different returns, and at least they can exit part of their investment principal. Better than the first situation.
If we step out of specific roles and look objectively, I personally think the first situation, running the company well, is the most correct choice.
Xingsheng Preferred certainly faces many temptations and pressures to go public. I just want to add some information, hoping it helps.
If investment institutions can exit, of course, that's best. Even if they cannot exit, if Xingsheng Preferred can survive among the giants, investors will accept it. This result is definitely in the top 5% of all their investment cases, worthy of being publicized on the institution's website, and the relevant investors will definitely often boast about investing in Xingsheng Preferred.
So, no matter what Xingsheng Preferred chooses, it does not owe most capital. Investors are short-sighted, only considering their own interests, and will be hysterical to gain more benefits. Never think from the perspective of investment institutions.
From another perspective, Xingsheng Preferred's current stage no longer needs venture capital; they are no longer Xingsheng Preferred's sugar daddy. They not only can't give money, but also won't give money. Why sacrifice the company's future to please such people? Does the core decision-making layer of Xingsheng Preferred want to start a second business and fear offending them?
At this moment, Xingsheng Preferred's fate with venture capital is over, and the cause and effect with capital have condensed into Xingsheng Preferred itself. Only by looking at problems from Xingsheng Preferred itself can it best meet the interests of all parties and conform to reality.
**II. Impact of core decision-makers' own factors**
In 2020, Xingsheng Preferred contacted multiple giants such as Meituan, Alibaba, and JD.com, and encountered the temptation of being absorbed by giants, but the core decision-makers firmly refused.
This is certainly related to the business environment and cognition at the time, as well as their attitude towards the business and the company.
The core decision-making layer of Xingsheng Preferred started in wholesale, came from a humble background, and walked step by step. This background and experience forged a spirit of steadfastness, pragmatism, honesty, and integrity, as evidenced by the corporate culture Xingsheng Preferred promotes.
Xingsheng Preferred has come through 8 years of hard exploration since 2014. Before receiving investment, it lost millions or tens of millions each year, but it persisted and tried every year.
In Hunan, a relatively backward place lacking an internet environment and entrepreneurial spirit, such entrepreneurs who invest in innovation are rare. Most people are hit-and-run, making quick money, and reluctant to invest.
Because of their background, experience, and feelings for Xingsheng Preferred, the core decision-making layer will not choose to "ruin the enterprise to cater to listing", but will only consider the enterprise's interests and wholeheartedly develop the enterprise well.
**III. Summary**
Therefore, Xingsheng Preferred's long-term goal is likely to survive, not to go public or have rapid performance growth and eventually die.
So specifically for 2022, the strategy will not be to do data for listing, but to make decisions based on Xingsheng's actual situation and the current development stage of the industry, that is, not to target data growth and market expansion.
******Summary**
From the perspectives of funds, safety boundaries, historical performance, and long-term goals, the best decision and ending for Xingsheng Preferred are:
  * With Hunan as the core, form an absolute advantage region; with Hubei, Jiangxi, Guangdong and other provinces as the periphery, form a relatively balanced region.
  * Take long-term operation and form a certain influence in the whole industry as long-term goals.
Of course, there are many variables in the market. If the giants no longer invest heavily and maintain the national market, that is, only invest 10-20 billion in the next 3-5 years instead of 30-40 billion, then Xingsheng Preferred can still do the national market.
If the giants' main business is greatly impacted, with market share, profits, etc. significantly affected, then Xingsheng Preferred can still do the national market.
If the state further intervenes and strongly controls the giants, then Xingsheng Preferred can still do the national market.
If the giants' organizational capabilities significantly decline, then Xingsheng Preferred can still do the national market.
Unfortunately, these possibilities are not great.
In terms of strategic considerations, Xingsheng Preferred needs to emphasize capital utilization efficiency, operational efficiency, organizational efficiency, innovation, and long-term market stability. If Xingsheng Preferred cannot do this, the ending will be decline or even disappearance.
Therefore, it is predictable that Xingsheng Preferred will withdraw from certain provinces, supply certain group leaders, and improve group efficiency. If Xingsheng's market strategy in non-essential provinces is equal to or more aggressive than the giants, it is unlikely to happen, unless it is stupid or I am stupid.
Xingsheng Preferred must start laying out for this this year, 2022.
Source: Chen Weilong's Telescope (ID: yiguojiren)
 _**-END-**_


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