Scan the QR code in the image to register On the evening of February 18, according to a report by LatePost, Xingsheng Youxuan will complete a $3 billion financing round, led by Sequoia Capital, with follow-on investments from Tencent, FountainVest Partners, Temasek, KKR, DCP, Chunhua Capital, Evergrande, and others. It is reported that after this round of financing, Xingsheng Youxuan's valuation will be at least $8 billion. On December 11, 2020, JD.com announced the completion of a $700 million investment in Xingsheng Youxuan. -01- Capital's Favorite Xingsheng Youxuan and Shihuituan Xingsheng Youxuan, Shihuituan, and Shixianghui are community group buying brands that have truly "started from scratch" in this track. In 2013, based on its original "Furong Xingsheng" convenience store chain, Xingsheng Youxuan experimented with the "pre-sale + self-pickup" community group buying model. It has now basically completed the exploration and iteration of the community group buying model, establishing core competitive advantages in supply chain, team, warehousing, technology, and other aspects. Shihuituan and Shixianghui have also become the few community group buying brands that can compete with Xingsheng Youxuan on the same stage. Xingsheng Youxuan Financing History
| Date | Round | Amount | Investors |
|---|---|---|---|
| Dec 2020 | Series D | $700M | JD.com |
| Jul 2020 | Series C+ | $800M | KKR, Tencent, Sequoia, Tianyi |
| Sep 2019 | Series B | $200M | Unknown |
| Jul 2019 | Strategic | $40M | KKR |
| May 2019 | Strategic | Unknown | Tencent Investment |
| Aug 2018 | Series A | $40M | Today Capital, Jinshajiang, Zhenge |
| Table: Retail Circle; Data: Public information; Amounts in USD | |||
| In terms of financing, 2019 became the peak for community group buying financing, with Xingsheng Youxuan raising funds three times and Shihuituan twice. 2020 saw the most financing, as the impact of the pandemic amplified the advantages of community group buying, and capital closely watched the sector. Shihuituan completed four rounds of financing in one go, backed by Alibaba. Meanwhile, Xingsheng Youxuan, with capital follow-up from Tencent and JD.com, completed two rounds totaling $1.5 billion. | |||
| -02- | |||
| The Battle of Princes and Three Kingdoms in Community Group Buying | |||
| Xingsheng Youxuan initiated the model innovation of community group buying, with Shihuituan and Shixianghui later catching up, becoming the "indigenous" brands of the model. Since community group buying can be understood as an extension and innovation of e-commerce, it has attracted e-commerce companies such as Taobao, JD.com, and Pinduoduo, which have set up dedicated teams and launched community group buying businesses. Of course, internet capital giants never miss retail formats with high traffic; Alibaba, Tencent, and JD.com have all entered, becoming "professional" capital promoters. Companies like SF Express, which excels in logistics, Meituan, which excels in same-city delivery, and Didi, which has mobile delivery terminals, have launched community group buying brands such as "Fenghuotai," "Meituan Youxuan," and "Chengxin Youxuan." | |||
| Community Group Buying Player Teams | |||
| Indigenous | E-commerce | Cross-industry | Capital |
| --------------- | --------------- | ---------------- | ----------- |
| Xingsheng Youxuan | Taobao Xinxuan | SF Express | Alibaba |
| Shihuituan | JD.com | Meituan | Tencent |
| Shixianghui | Pinduoduo | Didi | JD.com |
| "Using war to stop war" has become the core strategy in this battle. After strengthening its core competitiveness in supply chain, operation model, team, warehousing, and technology, Xingsheng Youxuan can be said to be "storing grain widely, building high walls, and slowly claiming kingship." Financing may become its defense against the "price war" waged by external community group buying brands in market share competition. | |||
| -03- | |||
| Why Do Hypermarkets and Chain Convenience Stores Rarely Do Community Group Buying? | |||
| Why Do Mom-and-Pop Shops Love It? | |||
| Community group buying is so hot that it has attracted the favor of internet and retail giants like Alibaba, Tencent, JD.com, SF Express, Meituan, and Didi. Why do few hypermarkets and chain convenience stores get involved? | |||
| Li Guo, president of Yonghui Superstores, expressed his views on community group buying at the company's second extraordinary shareholders' meeting in 2020. Li said that Yonghui Superstores would not chase the trend for now. "We are actually looking at it, but the reason we haven't chased the trend is that the key to community group buying is the group leader, who requires large subsidies. From a user perspective, there are risks, so we will stick to our existing philosophy." | |||
| The Retail Circle believes that community group buying has two keywords: "community" and "group buying." Community represents "near and fast," reflecting shopping efficiency and convenience, but compared to delivery-to-home services, it is relatively slower. Group buying represents "savings," but this kind of savings is actually "superficial" and "relative." | |||
| Why is it superficial? Because most latecomers, without a full-category layout, use super subsidies to exchange low prices for traffic and users. This can be long-lasting, just like hypermarkets use fresh produce to attract foot traffic, selling eggs at negative gross margin, treating eggs as missiles. It's just a marketing tactic and a way to drive traffic. | |||
| Why is it relative? Because this price system is relative to the prices of delivery-to-home services and convenience stores. The real price system would not offer across-the-board discounts on all categories. So what's the difference between this and supermarkets and convenience stores? | |||
| Think about it: if you can pick up goods at a community supermarket or mom-and-pop shop near your home, why would you go to a supermarket to pick up? Supermarkets should match with delivery-to-home services. And convenience stores (except some community convenience stores) also have no need to do community group buying, for the same reason. | |||
| Mom-and-pop shops, due to their "geographical advantage," have become the preferred partners for community group buying, making it a retail model that competes for business from "supermarkets," "convenience stores," and "wet markets." |