While competitors retreat from China's community group buying sector, Meituan is doubling down with an aggressive new strategy. The food delivery giant has launched what it calls a "Summer Offensive" through its Meituan Youxuan platform, signaling its determination to reclaim market leadership in this fiercely contested space.
1. Counter-Cyclical Strategy: Meituan's Summer Campaign
After industry-wide consolidation in 2021, Meituan Youxuan repositioned itself as a "Next-Day Delivery Supermarket" to improve profitability. Recent financial reports show narrowing losses, but the segment remains unprofitable. In response, Meituan has implemented sweeping reforms since April:
Organizational Restructuring: The company eliminated its customer experience department and reshuffled leadership across four key divisions. In May, Meituan transitioned from a regional management system to province-level autonomy, empowering local teams with greater decision-making authority.
Operational Focus: June marked the official launch of a three-month "Summer Offensive," complete with motivational banners and real-time performance dashboards in offices nationwide. This represents a strategic pivot from cost-cutting back to growth-oriented expansion.
2. Window of Opportunity: Competitors' Strategic Retreat
Meituan's timing coincides with rival Pinduoduo scaling back its Duoduomaicai operations. After surpassing Meituan in market share during 2022 (reaching 45% of the sector), Pinduoduo has recently reassigned key executives to focus on cross-border e-commerce and its core platform.
This strategic shift presents Meituan with a rare opportunity to regain ground. Industry analysts note that while Duoduomaicai maintains advantages in total order volume and GMV, its reduced focus on community group buying creates openings for competitors.
3. Back to Basics: The Evolution of Community Group Buying
The sector has matured from its early days as a cash-burning competition to embrace traditional retail fundamentals. Major players now emphasize:
Integrated Retail Models: Meituan has developed a dual-system approach combining instant delivery (through services like Meituan Maicai) with next-day community group buying. Alibaba's Taocaicai similarly integrates supply chains from Freshippo and RT-Mart while expanding physical pickup locations.
Supply Chain Optimization: Taocaicai reports 50% centralized and 50% localized sourcing, connecting over 10,000 agricultural bases nationwide. Pinduoduo leverages its agricultural strengths to maintain price advantages in fresh produce.
4. Lower-Tier Cities: The New Battleground
Platforms are increasingly targeting China's vast lower-tier markets, where:
Demand Dynamics: Slower-paced lifestyles and less-developed instant delivery networks make next-day group buying particularly attractive.
Operational Advantages: Proximity to agricultural production areas reduces logistics costs while improving product freshness. These markets also represent significant growth potential, with 692 million monthly active users (58.4% of China's total) as of April 2022.
5. The Long Game: Meituan's Persistent Vision
CEO Wang Xing's commitment to community group buying reflects his broader strategy for local life services. The "Summer Offensive" represents more than a seasonal push—it's part of a long-term plan to integrate community commerce with Meituan's ecosystem.
Industry observers anticipate further specialization in product quality, logistics, and user experience. Potential convergence with other retail formats (like convenience stores and fresh e-commerce) could reshape China's local commerce landscape.
As competitors recalibrate and Meituan presses forward, the community group buying sector appears poised for its next phase of evolution—one where retail fundamentals and localized execution will determine the ultimate winners.