Chinese online grocer Shixianghui appears to have ended its community group-buy service amid fierce competition in the market and regulatory pressure. The service’s web site and mini-app are no longer functioning. Meanwhile, the company is raising funds for a new snack store business.

Why it matters: The Tencent-backed firm is the latest company to exit the highly crowded community group-buy market, which relies on part-time distributors using WeChat groups to sell groceries to their neighbors. Recent exit signals that the market is going through a new round of consolidation.

  • Shixianghui’s retreat from community group-buy comes only three weeks after rival Tongcheng Life went bankrupt.

Details: Shixianghui’s official website and its WeChat mini-program are no longer accessible since last week. On Monday, local media found the company had moved out and emptied its head office in Wuhan. Once valued at $500 million, Shixianghui showed multiple signs of a possible shutdown in recent weeks.

  • Both the website and the mini-program do not load as of Friday afternoon, with the mini-program displaying an endless loading wheel.
  • Several senior managers left the company this month. Dai Shanhui, founder and chairman of Shixianghui, exited the platform’s operating body on June 30. Senior partner Du Fei announced his departure in a Weibo post on Monday.
  • However, Dai denied bankruptcy rumors. He still owns more than 80% of the company, according to information from corporate intelligence database Tianyancha. In an interview with local media, he said that the firm is undergoing a business transition rather than going bankrupt.
  • The company’s new community snack chain store Ailingshi is reportedly completing a funding round of up to $30 million.

Context: An early player, Shixianghui was once making profits before tech majors such as Alibaba, Didi, and Pingduoduo entered and competed with heavy subsidies.

  • Dai claimed in a January interview that the company earned profits in all its locations in 2020, about 50 cities across China. The company brought in around RMB 200 million to RMB 300 million per month in sales.
  • In March, Shixianghui was among the five community group buy companies fined for irregular pricing by China’s market regulator, the State Administration of Market Regulation. The other four companies were Didi’s Chengxin Youxuan, Pinduoduo’s Duoduo Maicai, Meituan’s Meituan Youxuan, and Alibaba-backed Nicetuan.

Emma Lee (Li Xin) was TechNode's e-commerce and new retail reporter until June 2022, when she moved to Sixth Tone to cover technology and consumption. Get in touch with her via or Twitter.