In late June 2025, residents across China were jolted by an unexpected notification on Meituan, the nation’s food delivery giant, announcing that it was abruptly shutting down its grocery group-buying operations in all but four provinces.
The decision, which surprised many customers and even suppliers, marked a dramatic turning point for one of China’s hottest pandemic-era shopping trends. Just a few months earlier, in March, Alibaba Group had quietly closed its own community group-buying arm, Taocaicai.
Xingsheng Youxuan, a startup that pioneered the model nationally, scaled back to operating in only three provinces, down from 18, a startling fall for a company valued at $5 billion at its funding peak in early 2021. Today, Pinduoduo’s Duoduo Maicai is the last major platform still offering group-buy grocery deals across China.
This wave of exits by heavyweights like Meituan and Alibaba underlines the rapid rise and fall of community group buying. During the height of the COVID-19 pandemic, a unique kind of online shopping emerged as the darling of China’s tech industry.
Dubbed “community group buying,” the model was essentially Groupon-meets-Instacart, where neighbours or friends pooled their orders for everything from apples to iPhones to get bulk discounts and cheaper delivery.
By consolidating dozens of grocery orders and dropping them at a single pickup point, platforms hoped to crack the conundrum of low-margin online grocery sales. The approach proved especially popular for daily necessities like produce and rice, allowing bargain-hungry consumers to save a few yuan on each item.
At its peak, community group buying attracted billions in investment and millions of users, promising to revolutionise how less-affluent communities shopped. However, now these platforms are vanishing one by one, casualties of shifting consumer habits, intense competition, and unsustainable economics.
From lifeline to obsolete model
The COVID-19 pandemic was the crucible in which community group buying truly took off. Starting in 2020, as Chinese cities cycled through strict lockdowns, going to the local wet market or supermarket became impossible for weeks at a time.
Tech companies seized the opportunity to digitise everyday necessities. In metropolises, well-heeled residents could pay for on-demand grocery delivery to their doorstep. But in less-developed regions and smaller cities, millions found a lifeline in pooling grocery orders with neighbours for next-day pickup.
Joining a WeChat group chat run by a local “tuanzhang” (group leader), residents could browse daily deals on vegetables, eggs, or even toys, place orders collectively, and then wait for a bulk delivery to arrive at a nearby garage or convenience store. It was a socially driven solution to last-mile logistics: cheaper than standard delivery and a convenient alternative when venturing out was risky.
Rather than dispatching individual couriers to thousands of scattered homes, companies could deliver in bulk to one location, cutting costs to a fraction of normal last-mile fees. In early 2020, as interest surged, nearly every tech titan piled in.
Meituan launched Meituan Youxuan (Select) and rapidly expanded to hundreds of cities. The Meituan Select app offered discounted groceries for next-day pickup. Pinduoduo shifted a sixth of its employees into its new Duoduo Maicai division to fend off upstart rivals. Didi Chuxing, the ride-hailing firm, tried its hand with Chengxin Youxuan, and JD.com spun up Jingxi Pinpin to chase the trend.
By late 2020, recruitment ads for group-buying operations were everywhere, and venture capital flowed freely into the sector. One leading platform, Hunan-based Xingsheng Youxuan, even attracted investments from Tencent and others, reaching a valuation of about $5 billion amid the frenzy.
Yet the very forces that enabled this boom sowed the seeds of its decline. By 2023, China’s pandemic restrictions had lifted, and daily life was reverting to normal. At the same time, the major players had built dense courier networks and “instant delivery” services that promised groceries at your door in under 30 minutes.
Meituan, for instance, leveraged its army of scooter drivers to offer near-immediate delivery from local warehouses and supermarkets. Once consumers got a taste of that convenience, the idea of waiting until the next day and walking to a pickup point lost its appeal.
“Now, instant retail is also coming to the lower-tier cities. People could get groceries for maybe the same price as community group-buying, but within an hour, instead of waiting a day and having to pick them up from a community group leader. We have arrived at a time when it is almost an old model,” observes Ed Sander, a China tech analyst at Tech Buzz China.
In other words, the very audience that group buying brought online, including older shoppers who prized thrift, was being lured away by faster, easier options. The day it announced its group-buy drawdown, Meituan pointedly stated it would double down on its 30-minute instant delivery grocery business. In just a few years, an innovation born out of lockdown necessity became largely obsolete, replaced by a more convenient evolution in online retail.
Online grocery’s rise & fall
One of the most intriguing aspects of the group-buying craze was the rise of the community group leaders, or tuanzhang. These were the on-the-ground organisers who made the whole system work. Often a neighbourhood busybody, a small shop owner, or a stay-at-home mom looking for extra income, the tuanzhang acted as the human bridge between tech platforms and residents. The term literally means “regimental commander,” a tongue-in-cheek reference to marshalling one’s neighbours for collective action.
Companies recruited thousands of such community leaders, enticing them with small commissions and flexible hours to promote group buys in their area. Armed with a smartphone app and plenty of personal connections, a tuanzhang would rally residents to place orders, often by posting daily deals in WeChat groups or handing out flyers. In exchange, they earned a cut of the sales, usually a few per cent, and sometimes perks like free produce for hitting volume targets.
Beyond the political and social critiques, the lack of financial sustainability was the fundamental challenge that doomed community group buying. Even on paper, selling produce and staples is a low-margin game; add the costs of handling and delivery, and margins slim down further. Group-buying promised to solve this by aggregating orders, but in practice, it introduced a host of new costs and complications. For one, relying on thousands of loosely affiliated community leaders made it hard to control service quality or standardise operations. Vegetables sometimes spoiled in the summer heat, waiting on a volunteer’s porch; orders got mixed up by overworked group leaders; customer complaints piled up.
Moreover, to grab market share, companies engaged in a subsidy arms race, pouring money into discounts for customers and generous commissions for group leaders, effectively trading short-term losses for user growth.
By late 2021, the combined gross merchandise value (GMV) of Meituan Select, Duoduo Maicai, and Taocaicai had reached an impressive ¥220 billion. Yet that amounted to less than 0.5% of China’s total retail sales, a tiny slice of the market considering the scale of investment. The truth was that group buying, while popular in pockets, never became a dominant mode of shopping, and the costs to run it far outweighed the revenues.
Even deep-pocketed tech titans found these economics untenable. Startups in this sector burned cash at a blistering pace, and many fizzled out despite backing from big-name investors. Didi’s Chengxin Youxuan folded after failing to turn a profit. JD.com’s Jingxi Pinpin was drastically scaled back by 2022. Alibaba’s Taocaicai and Meituan’s Youxuan each reportedly lost billions of yuan attempting to conquer the grocery scene.
Meituan never broke out the separate financials for its group-buying unit, instead folding it under the ‘New Initiatives’ category in earnings reports. But that segment alone swallowed nearly $1 billion in losses in 2024. Ultimately, no amount of volume could make ultra-cheap cabbage and eggs profitable when layered with delivery costs and commissions, at least not under the model of the past few years.
For the frontline tuanzhang who hustled to make group buying work, the downturn has been palpable.
“Our customer pool has gotten so much smaller, and the commissions just aren’t what they used to be,” says Lingluo, who runs a small print shop in Guangdong province and has been moonlighting as a community group leader since 2022.
At the peak of the craze in 2022- 2023, she had nearly 500 neighbours actively ordering through her, earning about ¥4,000 a month (around $600) in extra income. But now, in mid-2025, her WeChat ordering group has only 280 members left, and on a typical day, merely 10 or so place orders. The real blow came in May 2025 when Meituan slashed the commission structure for group leaders in an effort to stem losses.
Disheartened by the meagre pay, Lingluo has largely stopped promoting orders and keeps her store closed most of the time, choosing to conserve her energy.
The only reason she hasn’t quit being a group leader entirely, she admits, is to maintain access to cheap groceries for her own household, a motivation many remaining tuanzhang share. As long as she stays registered, she can buy staple foods at the platform’s low prices even if customer demand has dried up.
In the meantime, China’s digital retail landscape has evolved. Meituan and other tech firms have pivoted their attention to premium on-demand grocery delivery, pouring funds into coupons and promotions to entice customers into using their 30-minute services.
Why wait until tomorrow for a bulk order, they argue, when you can have fresh produce on your doorstep by the time you finish watching an episode of TV? The bet is that once consumers grow accustomed to the instant gratification of near-immediate delivery, few will want to return to the old ways.
It’s a bet that seems to be paying off in the post-pandemic era. China’s shoppers, even those in smaller cities, are rapidly coming to expect convenience alongside low prices. And the tech companies, after the bruising price wars of group buying, are now in a race to win on service and speed.
In fact, the habit of buying daily necessities online has only deepened. Consumers who first learnt to shop for food via group purchases during lockdowns have moved on to other digital grocery channels rather than reverting to traditional markets.
Even elderly shoppers, once intimidated by e-commerce, have embraced the convenience. Some now order groceries on on-demand apps three times a day so that each meal’s ingredients are fresh. It’s a remarkable shift in consumer behaviour that few could have imagined pre-pandemic.