Meicai, a Chinese app that supplies farm-to-table produce for restaurants, has been reducing its operations and laying off employees, Chinese media Jiemian reported on Friday.

Why it matters: Cutbacks came after Meicai failed to expand its online grocery delivery business and in July shelved a US IPO plan.

  • The company experimented with a grocery community-group buy model to compete with Pinduoduo and Meituan last year. It halted those operations early this year to refocus on servicing restaurants.

Details: Meicai has closed its research and development center in Chengdu, Chinese media Jiemian reported. The company also plans to cut at least half of its employees in several teams in its Beijing headquarters, including product development, sales, and finance.

  • The layoffs started two weeks ago and are expected to end in mid-September;  they will affect new employees and mid-level managers. 
  • Meicai partially confirmed the downsizing in a Saturday statement, saying the company is conducting “organizational optimization.” The statement said all branches are running as usual.

Context: Founded in 2014, Meicai largely focuses on supplying farmers’ produce directly to restaurant owners. 

  • Meicai is competing with Meituan’s enterprise-facing food distribution arm Kuailv in the business-to-business produce market. Kuailv also cut back its services in late August. 
  • The company has received investments from renowned investors, including Tiger Global Management, Hillhouse Capital, and GGV Capital. The firm raised $800 million in its most recent round in 2018.

Emma Lee

Emma Lee is Shanghai-based tech writer, covering startups and tech happenings in China and Asia in general. We are looking for stories related to tech and China. Reach her at lixin@technode.com.