At Meituan’s annual general meeting on June 26, CEO Wang Xing named two decisions he regretted. The first was the company’s failure to expand overseas soon enough after its public listing, when it still had a chance to establish an early foothold. The second was Meituan Youxuan, a business that consumed substantial investment before being wound down last year.
Management also reviewed Meituan’s gains and losses over the previous year, its strategic errors over the previous five years, and possible ways to revive its share price.
Large technology and retail companies often describe reinvention as a virtue. The less flattering part of the process is the cost of learning what not to do. Meituan’s recent moves suggest that it has begun applying lessons from Youxuan. Rather than relying only on supplier bidding, it has moved deeper into the supply chain in search of lower prices and more consistent quality. It has also opened a discount supermarket business called Happy Monkey.
In June 2025, Meituan closed Youxuan in most regions. Suppliers, warehouses, and other resources were quickly absorbed by Pinduoduo. Two months later, JD.com moved in the opposite direction and quietly revived community group buying under the JD Pinpin name in Beijing, Hebei, Anhui, and Jiangsu.
By late November 2025, Duoduo Maicai’s gross merchandise value (GMV) had surpassed the combined GMV of Duoduo Maicai and Meituan Youxuan a year earlier.
Community group buying has passed through three expansions and two contractions in China. The cycle began with regional convenience store operators, before the country’s largest internet companies arrived with more money, larger ambitions, and little patience.
In 2018, the first generation of community group buying companies, led by the original “big three” of Xingsheng Youxuan, Nice Tuan, and Tongcheng Shenghuo, entered lower-tier fresh food markets through regional supply chains and networks of neighborhood organizers known as group leaders. Their rough operating systems and inability to earn a profit eventually forced them from the market.
In 2020, the Covid-19 pandemic produced a second expansion. Meituan, Pinduoduo, and other large platforms entered with substantial capital and spread nationwide through subsidies. The momentum ended abruptly after regulators tightened oversight, and the early operators disappeared one after another.
In 2025, Meituan Youxuan’s withdrawal began a third restructuring. The remaining platforms turned their attention to efficiency and closer control of the supply chain. At the same time, competition moved away from next-day pickup and toward delivery within an hour.
Capital-driven contests among hundreds, sometimes thousands, of platforms have recurred throughout China’s internet economy. The formats have changed, from early group buying services to bike sharing, food delivery, and community group buying. The pattern has not.
An industry acquires a persuasive growth story. Large companies pour in money and race for scale, hoping that an early lead will become difficult to dislodge. Yet spending alone cannot create a durable business. Once the contest subsides, the largest companies tend to remain, while smaller operators are left to absorb the losses.
The community group buying campaign spread across China’s internet sector and consumed tens of billions of RMB. Its movement from rapid expansion to broad retreat was more than an account of experimentation by large platforms. It became a study of how competition works in China’s internet economy.
It also showed smaller companies what can happen when a wave of speculative capital enters a young market, while revealing broader changes in Chinese consumption.
To understand community group buying is to see how large platforms respond to regulation and rebuild their strategies afterward. The industry may also offer clues about which retail models can reach a lasting balance among efficiency, compliance, and customer experience.
The pandemic makes a market
The year 2020 changed the cast of community group buying.
Before the pandemic, investors had largely watched from a distance. Xingsheng Youxuan had offered a promising example, but the market still appeared limited.
As early as 2017, Hunan was home to more than one thousand community group buying companies. Furong Xingsheng, the province’s leading convenience store chain, recognized the opportunity and created Xingsheng Youxuan.
Using its convenience store network, Xingsheng Youxuan targeted lower-tier markets through a preorder and pickup model. While other platforms charged group leaders deposits of about RMB 5,000, (USD 737.2) Xingsheng Youxuan waived the deposit and paid commissions. The offer helped it gain market share quickly. Because the business had grown out of a convenience store chain, it allowed only store managers to serve as group leaders.
Xingsheng Youxuan was not profitable from 2017 through 2019. In 2019, however, it generated RMB 10 billion (USD 1.5 billion) in GMV and processed about eight million orders a day. In Hunan, its unit economics were close to breakeven.
Investors began to imagine what the business might become. If the model could be reproduced across China’s more than 30 provincial-level regions, the country might, in theory, support thirty versions of Xingsheng Youxuan. If Hunan alone could generate RMB 10 billion in GMV, a nationwide operator might command a valuation of USD 8 billion.
Earlier failures still gave investors reason for caution.
Community group buying platforms raised about RMB 4 billion (USD 589.8 million) in 2018. More than twenty companies, including Familyone, Songshu Pinpin, and Nice Tuan, received investments from HSG, IDG, and other firms.
Capital receded in 2019 as fulfillment costs became clearer. Funding fell to RMB 1.9 billion (USD 280.1 million), less than half the previous year’s total. Songshu Pinpin, Dailuobo, and other operators collapsed or merged, setting off the industry’s first large shakeout.
Then came 2020.
During the pandemic, many people were confined to their homes, while brick-and-mortar supermarkets faced operating restrictions. Community group buying, previously a minor retail format, moved quickly into the mainstream and became one of the market’s most closely watched sectors.
Within a year, Xingsheng Youxuan raised USD 1.5 billion, far more than it had raised in the previous three years combined. Total financing across the industry exceeded RMB 10 billion. Nice Tuan raised about USD 280 million across two rounds, while Tongcheng Shenghuo raised about USD 230 million. Valuations climbed.
Large technology companies rushed to back promising operators. The assumption was simple: the first company to dominate the market might gain lasting leverage over both suppliers and consumers.
Nice Tuan, one of the original “big three” alongside Xingsheng Youxuan, was widely viewed as Alibaba’s preferred contender.
Beginning with Nice Tuan’s Series B round in 2019, Alibaba led four consecutive funding rounds and invested more than USD 750 million, becoming the company’s largest shareholder.
Unlike Xingsheng Youxuan, which built its network around convenience stores, Nice Tuan initially had its product assortment and pricing system redesigned by Freshippo, also known as Hema. It used stores connected to Alibaba’s Ling Shou Tong (LST) network of about one million small retailers, along with Cainiao Post locations, as pickup points.
In 2020, Nice Tuan acquired several local group buying companies in Changsha in quick succession. With Alibaba’s backing, it gained access to local sorting hubs and group leaders.
Tongcheng Shenghuo entered community group buying even earlier than Nice Tuan.
The business was incubated within Tongcheng Group in January 2018 and operated by Suzhou-registered Xiancheng Technology. It began with nonstandardized fresh food products and targeted lower-tier markets. Fresh food accounted for seventy percent of its assortment, while other categories included household goods and local services.
Its model combined large-scale direct sourcing from producers with community pickup points.
Founder He Pengyu had previously served as a senior vice president at Tongcheng Travel, giving him access to online travel industry resources. Tongcheng Shenghuo completed eight funding rounds in two and a half years.
In June 2020, Joyy led its USD 200 million Series C round with an investment of USD 100 million. More capital followed, supporting the company’s expansion beyond East China. After its Series C+ round in July 2020, Tongcheng Shenghuo was valued at USD one billion and ranked second among the original big three.
The three companies used different operating models, but Xingsheng Youxuan was the one that later entrants studied most closely.
At a time when many operators were still recording orders by hand, Xingsheng Youxuan had begun introducing automation and other logistics tools. Meituan and Pinduoduo later adopted parts of its approach.
Several industry practitioners told 36Kr that when Duoduo Maicai entered Nanchang, its first move was to contact Xingsheng Youxuan’s group leaders.
A new group of three companies, each backed by a large technology platform, concentrated its expansion in 2020.
That year remains vivid for former Meituan employee Jin Chen.
In December, Jin, then a designer, received an urgent transfer order assigning him to Meituan Youxuan.
Meituan had spent considerable time studying the market. According to Jin, Chen Liang, the executive overseeing the initiative, traveled to southern China in 2019 to examine Xingsheng Youxuan. After returning to Beijing, he concluded that Meituan should invest heavily in community group buying.
After senior management approved the plan, Meituan piloted the business in Jinan. Meituan Youxuan was formally established on July 7, 2020, and given the status of a top-tier business unit.
No company had made community group buying profitable. But the potential size of the market was easy to imagine if the format could work at scale.
Meituan decided to pursue territory and market share first, then address profitability after it had grown. Xingsheng Youxuan, Meijia Youxiang, and Duoduo Maicai were already expanding. As a late entrant, Meituan raced to catch up, hoping to operate in about one thousand cities.
“It really felt like a war,” Jin said.
During his three months at Meituan Youxuan, Jin routinely worked from 10 a.m. to 10 p.m, with double pay on Saturdays. Previously, he would have left the office by 8 p.m. at the latest. Now, 8 p.m. marked the beginning of the night shift.
The office was still brightly lit at 11 p.m, and the lights often remained on into the early morning.
New faces appeared almost every day. There were so many that it became difficult to tell internal transfers from new hires. Few people had time to learn one another’s names. They were ushered into meeting rooms and assigned work almost as soon as they arrived.
Jin heard colleagues say that Meituan Youxuan had assembled an internal team of nearly 10,000 people.
The product operation was not the only function that had to be built from nothing. Employees worked at full speed for three months to create systems for users and group leaders. Those systems remained in use for years.
Few employees could withstand the pressure.
Five people, including Jin, were transferred into his department. Three resigned because of the workload. Jin stayed but frequently suffered from insomnia and found himself crying uncontrollably at night.
A colleague whom Jin had referred to the team developed stress-related physical symptoms, including bumps across the body, and left as soon as the probationary period ended.
The pace produced rapid expansion.
Within three months, Meituan had entered 20 provinces and launched in 20 cities. By December, it covered more than 2,000 cities and counties and more than 90% of China’s towns and townships. Within five months, Meituan Youxuan was processing 20 million orders a day and had acquired more than 100 million new users.
Duoduo Maicai began discreet pilots in Nanchang and Wuhan about six weeks after Meituan’s pilot. It began reproducing the model nationwide in September. The brand formally debuted about six weeks after Meituan Youxuan.
Pinduoduo regarded community group buying as no less important.
About 60% of Pinduoduo’s 600 million annual buyers lived in third-tier cities or smaller markets. Community group buying, with next-day delivery and self-pickup, reached many of the same consumers.
In an internal speech marking Pinduoduo’s fifth anniversary on October 8, Chairman Colin Huang put the issue bluntly:
“If someone else has already taken over the consumer’s dining table, why would the consumer still come to Pinduoduo?”
Pinduoduo sought to keep prices low while concentrating on frequently purchased products. In each new city, it opened a section offering RMB 1 (USD 0.1) flash sales during the first month of operation. A prominent entry point in the Pinduoduo app helped Duoduo Maicai reach more than 300 cities within six months, and its daily order volume briefly led the market.
Chengxin Youxuan, another member of the new big three, was backed by Chinese ride-hailing platform Didi.
Community group buying was Didi’s largest move beyond ride-hailing, and it spent heavily. It allocated RMB 2 billion (USD 294.9 million) in consumer subsidies and another RMB 5 billion (USD 737.2 million) for field marketing teams.
The spending produced dense coverage in some cities. In central Chengdu, Chengxin Youxuan had more than 20 pickup points within a 500-meter radius in certain neighborhoods, a concentration comparable with Duoduo Maicai’s network in Wuhan.
But the method Didi had used to establish an early advantage in ride-hailing did not carry over to community group buying. The business depended on complicated supply chains and logistics networks that could not be built through spending alone.
During its nationwide expansion, Didi entered cities faster than it could develop its supply chain, warehouses, and distribution system. Service deteriorated, and many customers acquired through subsidies soon left.
In March 2021, Didi removed Chengxin Youxuan from its reported operating results. Some industry participants interpreted the change as an attempt to separate the business financially before a possible public listing.
In May 2021, percentage- and threshold-based promotions were halted, although many business development employees had depended on such offers to generate orders.
The company then closed city operations in batches, removed Chengxin Youxuan from the Didi app, dismissed its product and technical teams, and removed product information from its WeChat mini program. By March 2022, Chengxin Youxuan had ceased operations.
Didi had entered community group buying earlier than the other large platforms but withdrew before the market settled. Alibaba’s Taocaicai took its place.
Alibaba arrived somewhat later. It did not formally enter the sector until it established the MMC business group in March 2021.
In September that year, Alibaba combined Hema Jishi and Taobao Maicai and relaunched them under the Taocaicai brand.
Alibaba described Taocaicai as community e-commerce rather than community group buying. It said it would not depend on heavy subsidies to gain market share and would instead concentrate on its supply chain.
It also sought to challenge the belief that community group buying meant cheap, poor-quality products by putting greater emphasis on quality.
The new big three took shape during this period.
No one knew how long flash sale subsidies would continue or how long investors would remain enthusiastic.
At the time, neither Huang nor Chen could have expected Duoduo Maicai and Meituan Youxuan, two rivals launched within weeks of each other, to compete for years.
By the end of 2020, China’s community group buying market appeared close to a decisive shift.
Wang Xing said Meituan Youxuan had to surpass its rivals. Huang similarly viewed the sector as a rare opportunity that could not be missed.
The platforms used subsidies to enter one city after another. A regulatory directive then stopped the expansion.
In December 2020, the State Administration for Market Regulation and the Ministry of Commerce jointly issued “nine prohibitions” for community group buying. The rules banned practices including below-cost sales, deceptive pricing, and algorithmic price discrimination against existing customers.
A month earlier, Meijia Maicai, a subsidiary of Meicai, had begun withdrawing from cities. It was later sold to JD.com.
The subsidy-led expansion began to unravel.
After the rules took effect, Chengxin Youxuan, Meituan Youxuan, Duoduo Maicai, and other platforms received administrative penalties for improper pricing practices.
In March 2021, Nice Tuan and four other companies received the maximum penalty of RMB 1.5 million (USD 221,170.4) for pricing violations. In May, Nice Tuan was fined another RMB 1.5 million for below-cost selling and false advertising, while its Jiangsu operations were suspended for three days for rectification.
Under growing regulatory pressure, the original big three, which depended on continued capital infusions, were the first to collapse.
In July 2021, Tongcheng Shenghuo filed for bankruptcy. The company had relied heavily on franchisees to expand. Its fulfillment system was fragmented and difficult to standardize or reproduce. Under sustained price pressure from Meituan, Pinduoduo, and other large platforms, it lost ground until its cash flow failed.
Many former employees regretted the outcome.
CEO He Pengyu appeared on a livestream the day before the bankruptcy announcement to negotiate with suppliers. He said the company would make strategic adjustments, change its name, and alter the direction of the business.
The next day, it announced its bankruptcy.
Even as it pressed employees to improve performance, Tongcheng Shenghuo had been seeking a merger or acquisition.
It held discussions with JD.com, Alibaba, ByteDance, Meituan, and other companies. Some teams began due diligence, but no transaction was completed as confidence in the industry deteriorated.
At the end of June 2021, Tongcheng Shenghuo still hoped that one final performance push would produce stronger figures and help secure an acquisition. A potential buyer rejected the effort again.
Beginning in October, Nice Tuan and Shixianghui withdrew from cities or changed direction. Chengxin Youxuan began large-scale layoffs.
By the end of the year, Xingsheng Youxuan had withdrawn from six provinces, including Henan, Shandong, and Sichuan, and retreated to three provinces in central China.
The departure of the original big three exposed the structural weaknesses of community group buying. The business required substantial assets, produced thin margins, and carried high compliance costs.
“Once subsidies were stopped, order volume fell off a cliff and cash flow dried up rapidly,” a person close to Nice Tuan said.
The largest platforms, however, continued running similar promotions in altered forms, including campaigns that gave customers 15 eggs after checking in for five days.
At the same time, the platforms paid substantial subsidies to group leaders at the end of the distribution chain, surrendering nearly all the revenue from some orders.
With the original leaders weakened, Taocaicai began to grow.
Nice Tuan fell short of expectations, but the effect on Alibaba was smaller than it might have been.
While investing in Nice Tuan, Alibaba had developed several internal operations, including MMC, LST, Hema Jishi, and Taoxianda. They competed independently as the company decided which approach to pursue.
In September 2021, Alibaba announced that the businesses would be combined under the Taocaicai brand. It said there would be no limit on investment.
Trudy Dai took command, while B2B business group president Li Di assumed overall responsibility. Taocaicai became one of Alibaba’s most important new retail projects.
Nice Tuan was subsequently set aside.
Taocaicai, however, failed to overtake its rivals.
A 2024 report found that Duoduo Maicai held the largest share of China’s community group buying market, at 44%. Meituan Youxuan ranked second with 32%, followed by Xingsheng Youxuan with 17%.
Taocaicai’s share remained below 5%, leaving it outside the market’s second tier.
The remaining companies had to change course.
The subsidy contest gave way to a contest over efficiency. Competition shifted toward warehouse and distribution density, product selection, fulfillment costs, and the retention of group leaders.
Meituan Youxuan was the first to adjust.
In October 2021, Meituan combined Youxuan, Kuailv, Meituan Maicai, and other operations into a single group. Chen Liang, then a senior vice president at Meituan, led the new organization.
Three months later, Chen transferred his responsibilities to another senior executive with long experience in finance and operations, who then took control of Youxuan.
The personnel change suggested that the business was moving from expansion toward profitability.
Meituan Youxuan began reducing and reorganizing its operations.
In 2022, it withdrew from several underperforming regions and conducted multiple rounds of layoffs. During the year, it was downgraded from a top-tier business unit and merged with Meituan’s e-commerce operation.
Its results were no longer reported separately, and it was no longer overseen by the president of an independent business group.
Soon afterward, Meituan Youxuan repositioned itself as a “next-day delivery supermarket.”
Duoduo Maicai maintained its low-price approach. It relied on traffic from Pinduoduo’s main platform and its agricultural supply chain while concentrating on lower-tier markets.
Alibaba’s Taocaicai, formerly Hema Jishi, brought together resources including MMC and LST. It tried to distinguish itself through traffic from Alibaba’s e-commerce businesses and its digital agriculture operations.
Its direction shifted repeatedly in the early stages. It did not begin to stabilize until 2022, when it concentrated on major cities in East and South China.
The second shakeout was complete.
The surviving platforms regrouped and prepared for the next phase.
Why Meituan Youxuan could not be saved
Beginning December 15, 2025, Meituan Youxuan ceased operations across Guangzhou. The closure marked its formal departure from the market.
From its first large contraction in April 2022 to its final closure in December 2025, Meituan Youxuan spent more than three years retreating.
On June 23, 2025, it cited “business adjustments” as it closed community group buying services across most of the country.
The scale of the withdrawal had already suggested where the business was heading.
Public discussion moved from reports of “regional adjustments” to expectations of a “nationwide shutdown.” To outside observers, the closure appeared sudden. Employees had seen signs much earlier.
Liu Zirui, a former business development employee at Meituan Youxuan, saw his workload rise sharply for several months around the middle of 2025. He frequently worked late into the night.
Liu told 36Kr that employees in his region had previously been expected to establish one new group each month. During that period, the target rose to at least two.
Performance demands increased while performance-related compensation fell.
The team leader took a hard line and, at one point, reportedly told employees to resign and leave if they wanted to.
Looking back, Liu believes that the attitude may have reflected the wishes of senior management.
The highest-ranking city executive and the local manager overseeing Meituan Youxuan in the region were also replaced twice within a short period.
Zhang Yutong, who worked in operations at Meituan, noticed warning signs even earlier and chose to leave Meituan Youxuan.
After 2021, Meituan Youxuan and Duoduo Maicai appeared to have divided much of the market. Industry participants often described Meituan Youxuan as the platform that most resembled a conventional retailer in product quality and fulfillment reliability.
But the business was never secure. Concern about its performance remained constant.
Duoduo Maicai achieved its first full-year profit in 2024, while most of its regional operations had recorded positive gross margins since 2023.
Meituan Youxuan, by contrast, had not achieved overall profitability shortly before its closure. It was Meituan’s only loss-making new business.
That pressure reached the operations team through a steady reduction in employee authority.
When Zhang joined, the budgets controlled by operations employees could pay for a wide range of subsidies. These included flash sale prices on the app’s home page and RMB 10 (USD 1.5) coupons with no minimum purchase, which were used to compensate customers.
Headquarters supplied all the money.
Over time, headquarters reduced or eliminated the budgets to lower costs. Merchants were increasingly expected to fund promotions themselves.
Meituan Youxuan’s weakness in the later stages of the competition grew partly from the centralized model it had adopted at the beginning.
The platform paid the subsidies and set the prices. Headquarters also maintained tight control over product quality and fulfillment reliability.
That arrangement initially generated orders and supported quality. It also concentrated costs, pricing decisions, and responsibility for regional execution at headquarters. As time passed, the burden on profitability grew, while local teams lost room to respond.
Duoduo Maicai, by contrast, had operated largely as a marketplace from the beginning. It earned revenue by charging merchants technology service fees, product placement fees, and campaign fees.
After platform subsidies declined in 2023, merchant funding became its main source of profit. Its structure was lighter and more flexible.
To reach price-sensitive consumers in lower-tier markets quickly, Duoduo Maicai set maximum prices and often selected suppliers according to who offered the lowest bid. This kept procurement costs and retail prices down.
“Contradictory” was Zhang’s assessment of Meituan Youxuan in its later years.
During her first year with the business, Zhang felt that she was developing quickly.
In addition to routine operations work, she independently managed a Lunar New Year shopping festival project. Coordinating resources and communicating with different teams gave her a strong sense of accomplishment.
Later, she led younger employees through major promotional campaigns.
All of it made her feel: “I really could build something.”
When did that begin to change?
The emphasis on product quality may have contributed both to Meituan Youxuan’s early strengths and to its eventual difficulties.
As Pinduoduo expanded quickly through low prices, Chen Liang repeatedly told employees that community group buying was fundamentally a retail business. Meituan, he argued, first had to master supply chains and fulfillment.
To distinguish itself, Meituan Youxuan could not lower its quality standards to match Duoduo Maicai. Yet its prices still had to remain competitive.
That was its central contradiction.
Meituan Youxuan separated purchasing from merchandising, creating a barrier between the two functions.
To reduce the risk of corruption, operations employees could not speak directly with merchants about commercial resources. Procurement employees, who did deal directly with merchants, could not always negotiate prices that suited the operations team.
Communication became slow and expensive.
Tension between the two functions often mirrored the company’s wider problems.
The contradiction also appeared in GMV.
Low prices attracted not only consumers buying for themselves but also resellers hoping to profit from promotions.
Some group leaders began collecting goods for customers while purchasing large quantities from Meituan Youxuan for resale.
Meituan Youxuan imposed purchase limits to stop the practice. GMV immediately fell.
“The people making the rules did not seem to know what they wanted,” Zhang said.
Caught between competing priorities, Meituan Youxuan repeatedly tried to correct its course. It never resolved the conflict.
In April 2022, Meituan carried out its first large withdrawal, ceasing operations in Gansu, Qinghai, Ningxia, and Xinjiang, and withdrew from Beijing. It also conducted two rounds of layoffs.
During those layoffs, Zhang’s merchandising team was merged with the business development team, and both departments were placed under one manager.
Anxiety spread through the organization.
“Not long after I joined, we were no longer allowed to run products at a negative gross margin,” Zhang said. “Everything had to have a positive gross margin, and the gross-margin target kept being pushed higher and higher.”
Middle managers became increasingly reluctant to make decisions that involved risk.
“In execution, we at Meituan Youxuan did not really have any internal friction,” she said. “But we faced many restrictions. After our authority was reduced, no matter how quickly we responded, there was no way for us to be as flexible and unpredictable as Duoduo Maicai.
“For example, Duoduo Maicai could set one price in the morning to drive traffic, then change the price in the afternoon and recover the gross margin. It would use a low morning price to bring people in and increase a product’s popularity. Then it would raise the price in the afternoon, and the new users arriving would directly contribute profit. The two moves flowed seamlessly into each other.”
The working environment changed as well.
Alongside constant operational tests and adjustments, Zhang’s schedule filled with meetings and presentation materials. She worked into the early morning preparing documents, then had to be seated in a conference room by 9 a.m. for the morning meeting.
Managers began asking employees to prepare extensive materials so that, when the business failed to deliver results, they would still have a persuasive account to present.
According to Zhang, employees who told persuasive stories and produced polished presentations were more likely to become middle managers.
Policies changed frequently, managers came and went, and campus hires rarely stayed longer than three months.
“Changes often came without warning,” Zhang said.
Upstream teams would suddenly inform her of developments such as a subsidy reduction or a campaign’s cancellation, sometimes with only a week’s notice.
Suppliers received no transition period, and operations teams had little time to respond.
Zhang and her colleagues had to revise plans overnight, replace creative materials through the night, and abandon carefully prepared schedules.
Few employees around Zhang lasted more than three months in such an unpredictable environment. Turnover among campus hires was even higher.
By then, Meituan Youxuan had become too large and cumbersome to change direction quickly.
In June 2025, Meituan abruptly closed community group buying operations in 18 provincial-level regions, including Beijing, Fujian, Sichuan, Chongqing, Hubei, and Shanghai. It retained operations only in parts of Guangdong and Zhejiang.
With competition in food delivery intensifying, Meituan closed Youxuan and redirected resources to larger businesses.
When operations were suspended, order data in group leaders’ systems was reset to zero. Suppliers were given three to five days to handle remaining inventory themselves.
Group leaders later received refunds for deposits, often of about RMB 1,000 (USD 147.4). Meituan Youxuan employees could choose transfers to Kuailv or Xiaoxiang Supermarket.
What came after Youxuan
After Meituan Youxuan closed across most of China, Meituan transferred employees to Kuailv or Xiaoxiang Supermarket. Central warehouses whose leases had ended were converted to support quick commerce, which uses local storage and couriers to deliver orders within short periods.
The decisions offered an indication of Meituan’s next priorities.
As competition in community group buying faded, China’s retail sector split into two new areas: on-demand retail centered on delivery within about 30 minutes, and discount supermarkets built around low prices and value.
For several years, on-demand retail had been treated largely as an extension of food delivery.
In 2025, it became a major field of direct competition among China’s largest internet platforms.
JD.com entered food delivery and launched a self-operated quick commerce service. Meituan elevated its long-established Meituan Shangou operation into an independent brand and a major strategic priority.
Alibaba upgraded its one-hour delivery business into Taobao Shangou, gave it a top-level entry point, and displayed the service prominently on the Taobao app’s home page.
During 2025, on-demand retail moved from the edge of the business to the center of competition.
The previous round of community retail competition had taught the internet companies the value of closer control over sourcing, warehousing, and inventory.
As the on-demand retail contest intensified, spending moved further upstream.
In November 2025, Taobao Shangou introduced a convenience store chain. Built around a warehouse-centered quick commerce model, it was expected to expand gradually to more than 200 cities nationwide.
Meituan Shangou announced a range of growth programs for domestic and international brands. These included plans to develop warehouses with more than ten thousand brands and build supporting supply chain infrastructure.
JD.com took a different approach. It began converting its 7Fresh supermarkets through a combined warehouse-and-store model, seeking to shorten fulfillment times by reusing existing resources and coordinating online and offline operations, inventory, and delivery.
The rise of on-demand retail reflected growing expectations for faster delivery.
Demand moved from next-day pickup toward delivery within an hour, and sometimes within minutes. Platforms redirected more investment toward local warehouses and last-mile delivery networks.
Because on-demand retail depends on short distances and rapid fulfillment, discount supermarkets, which emphasize low prices and limited product selections, also became important to the largest internet companies.
In August 2025, three of them entered the sector within a short period.
Freshippo announced that Hema NB would be renamed Chaohesuan NB and opened seventeen stores across ten cities, including locations in Jiangsu, Zhejiang, and Shanghai.
Meituan opened its first Happy Monkey supermarket in Hangzhou.
JD.com opened its first discount supermarket in China, a 5,000-square-meter store in Zhuozhou, Hebei.
Although all three companies were competing in discount retail, Alibaba, JD.com, and Meituan pursued different approaches. Each adapted the format to its existing strengths and broader aims.
Commenting on the growth of discount supermarkets, angel investor Guo Tao said consumption stratification and inflationary pressure had combined to increase demand for products offering strong value.
The trend, he said, closely matched the needs of mass market consumers.
The retail transformation led by China’s internet platforms is far from complete.
The closures of 2025 increasingly resemble not the end of an era but the beginning of another reordering.
Part of Wang Xing’s motto has been not to dwell on the past and to keep moving forward.
The warehouses that technology companies once spent heavily to build are now supporting on-demand retail and discount-focused supermarkets.
After Meituan Youxuan closed, Zhang Yutong noticed a sudden increase in emotional messages from users mourning the service.
During its expansion, Meituan Youxuan’s network reached more than 2,000 cities and counties across China. More than half of its pickup points were in towns and townships.
Even in mountainous counties such as Ganzi in Sichuan and Shuangbai in Yunnan, customers could place an order one day and collect their goods the next from a small store near the entrance to their village.
Zhang struggled to describe how she felt when she read the messages.
Only in hindsight did she recognize that the business had carried a meaning larger than its financial results.
“Meituan Youxuan was still something aimed at generating long-term returns,” she said. “In the short term, it consumed enormous amounts of labor and material resources, and the work brought little immediate reward.
“The significance of doing business in rural areas was that it could expand our social influence and our value to society.”
“That day was simply too far away,” she said. “No one managed to wait until it arrived.”
KrASIA features translated and adapted content that was originally published by 36Kr. This article was written by Tian Jiaxin for 36Kr.
Note: RMB figures are converted to USD at rates of RMB 6.78 = USD 1 based on estimates as of July 23, 2026, unless otherwise stated. USD conversions are presented for ease of reference and may not fully match prevailing exchange rates.