---
title: "Xingsheng Contracts, Northern Expansion Sacrificed to Preserve Core"
description: "Xingsheng Youxuan's northern expansion faces long odds; without favorable timing, location, and unity, startup challengers attacking capital-backed giants is like throwing eggs at stones. Despite having timing and unity, community e-commerce is dominated by location, which big players buy with cash for supply chains and order volume. Facing long supply lines, even talents like Zhuge Liang couldn't work wonders. Forcing northward expansion would drain national strength, ending like Liu Bei's Shu. Now, under capital's shadow, preserving strength and sacrificing pawns to save the rook is wise. Thus, Xingsheng may retreat from the Qinling-Huaihe line northward, contracting to provincial capitals to ensure overall health."
author: "珑哥"
publisher: "New Distribution"
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published: "2022-09-03"
language: "en"
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---

# Xingsheng Contracts, Northern Expansion Sacrificed to Preserve Core

> Xingsheng Youxuan's northern expansion faces long odds; without favorable timing, location, and unity, startup challengers attacking capital-backed giants is like throwing eggs at stones. Despite having timing and unity, community e-commerce is dominated by location, which big players buy with cash for supply chains and order volume. Facing long supply lines, even talents like Zhuge Liang couldn't work wonders. Forcing northward expansion would drain national strength, ending like Liu Bei's Shu. Now, under capital's shadow, preserving strength and sacrificing pawns to save the rook is wise. Thus, Xingsheng may retreat from the Qinling-Huaihe line northward, contracting to provincial capitals to ensure overall health.

Xingsheng's northern expedition is long and arduous; how can stones from other hills polish jade?
Without favorable timing, location, and unity, a startup attacking a capital-backed giant is like throwing eggs at stones.
Xingsheng Youxuan understands this well. Though it has timing and unity, in community e-commerce, location is king. Big players use cash to buy supply chains and C-end order volume, spending lavishly to seize location.
Facing such long supply lines, even with talents like Zhuge Liang and Wolong in camp, it's hard to deploy wooden oxen and flowing horses. Forcing a northern expedition would eventually drain national strength, ending like Liu Bei's Shu.
Once mighty with iron horses and spears, now under capital's shadow, preserving strength and sacrificing pawns to save the rook is the wise choice.
Thus, Xingsheng Youxuan may retreat from the Qinling-Huaihe line northward, contracting to provincial capitals to ensure overall health.

**01** **Northern Retreat**
Recently, Xingsheng closed group points in some Hebei cities, stopped C-end fulfillment, and retreated to Shijiazhuang, the provincial capital. East and North China may see continued network closures and group stops, entering a provincial capital defense.
This city closure isn't unexpected. Since the entry of Duoduo, Meituan, and Taocaicai systems, Xingsheng Youxuan has rarely fought head-on. Over a year ago, it began narrowing city coverage to keep its home base strong.
The closure in Baoding and elsewhere is just a small node. Cities outside the core have seen grid warehouse mergers and group closures since last year. This time, it may involve large-scale retreats from provinces around the Qinling-Huaihe line and the north, falling back to provincial capital-level cities for cautious growth.
It's understood that Xingsheng Youxuan's Hebei operations are basically wound down. Initially, Shijiazhuang warehouse served as the provincial center, covering Handan, Xingtai, Baoding, Dingzhou, Hengshui, etc.
Now only Shijiazhuang continues fulfillment; other prefecture and county-level cities have been closed, with Hebei's fulfillment routes redirected to Shijiazhuang.
In the northwest, Xingsheng Youxuan has limited presence; Duoduo Maicai dominates. Other platforms, like Xingsheng, hold Xi'an, Shaanxi. Currently, Xingsheng uses Xi'an as the center warehouse, covering Xi'an, Baoji, and Tongchuan surroundings. Further contraction is possible to enter a positive cycle.
In the three northeastern provinces, Xingsheng Youxuan has basically no presence. Its main front is in North China provinces. Besides Hebei, Shanxi retains Taiyuan, Xinzhou, and Jinzhong surrounding areas; Beijing and Tianjin are untouched.
Northern provinces also include Shandong and Henan. In Shandong, it retreats to Jinan, radiating to Tai'an and Feicheng county-level city. Around the provincial capital, it splits the market with Duoduo, Meituan, and Taocaicai. Qingdao and Yantai, two major group-buying cities, are dominated by Duoduo and Meituan.
Only Henan remains, with operations in Zhengzhou, Kaifeng, and extending north to Xinxiang, south to Xinyang, east to Shangqiu, west to Luoyang, covering urban and some county areas.
Though not fully retreated to provincial capitals, these northern cities face ongoing network closures; other prefecture-level cities may not escape closure, making dark horses unlikely.
In East China's Jiangsu, Zhejiang, and Anhui, operations have basically contracted to Nanjing, Hangzhou, and Hefei. Other surrounding cities may also see network withdrawals and group stops.

**02** **Chain Capabilities**
Xingsheng's Hebei contraction and the gradual provincial capital defense in most of East and North China are mainly due to this year's core community e-commerce topic: cost control.
On the supply chain, Xingsheng Youxuan's core merchant system is well-established and strong, with advanced fruit and vegetable PC warehouse and hot fresh meat PC warehouse capabilities. Its merchant system rivals Meituan Youxuan's, Duoduo Maicai favors survival of the fittest with a weaker core merchant system, and Taocaicai relies mainly on the RT-Mart system.
But distant water can't quench near thirst. Central China's base is solid, Guangdong developed early with good provincial performance. Core merchants can be replicated, but in East and North China, supply lines lengthen, making supply chain advantages insufficient. Without capital subsidies for order volume, competing with Duoduo and Meituan by building local core merchant systems is very difficult.
In warehousing and distribution, Xingsheng in North and East China has little to show, basically using the industry's standard model. Grid warehouse fulfillment has a driver partner system, but with tight order volumes, partners will protect themselves rather than fight.
In contrast, Guangdong shows Xingsheng's warehousing style: a super-large warehouse model with multiple center warehouses in one park, which is Xingsheng's specialty.
This super-large warehouse model in Changsha is Xingsheng Logistics' full form: RDC center warehouse + fruit/vegetable PC warehouse + hot fresh meat PC warehouse + regular shared warehouse. Other players can hardly replicate 70-80% of its essence in the short term.
But even with such deep internal strength, under capital, one must stay low-key. Xingsheng's mature logistics is years of effort; in East and North China, lacking time for meticulous operation and the boldness to burn cash is the biggest pain.
In terminal group points and users, Xingsheng Youxuan has little advantage.
In core cities, Furong Xingsheng's long-term cultivation provides some brand foundation from promotion, compared to early startups like Shihuituan and Tongcheng Life, but only in Central and South China.
After Meituan, Duoduo, and Taocaicai entered, Xingsheng's visibility in North and East China is not on the same level, and traffic in lower-tier markets is hard to compete with.
Using BD iron army human-wave tactics against AI smart traffic push can only win temporary order data; playing a trump card against threes might win a round but can't change the landlord's eventual steady profit.
Therefore, considering all chain advantages and disadvantages, fighting hard in northern provinces is the worst strategy; retreating to preserve is the best.

**03** **Interpreting Expectations**
Xingsheng Youxuan's contractions across regions, retaining provincial capitals, is meaningful. Xingsheng neither wants to leave the table, nor can it play first, nor will it be wiped out.
From some data surveys of Xingsheng merchants, 60-80% of orders are still concentrated in Hunan, followed by Hubei, Guangdong, Fujian, Jiangxi, Guangxi. The retreat from northern cities has little impact on overall order volume.
Hunan orders remain strong with ample cash, not hurting the foundation or face.
Merchants in Hubei and Guangdong reveal that although Meituan and Duoduo's entry has dimmed past glory, year-over-year summer data shows core provincial order volumes are stable, which is commendable.
Retreating to provincial capitals, focusing on the overall UE model, means Xingsheng Youxuan may produce better profit data next, possibly paving the way for secondary capital markets.
Close group points to control costs, keep provincial capitals for storytelling, and cultivate talent.
With primary investors hesitant to enter group buying, Xingsheng needs to go to secondary capital markets, requiring both good UE and a good story.

Source: Liuge Research (ID: liugekandianshang) Author: Long Ge


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