Meituan, China's largest delivery platform, has abruptly withdrawn from the Chinese group buying market, which has transactions amounting to tens of trillions of won. The market is now left to Pinduoduo, the parent company of Temu, as the sole stronghold. Pinduoduo's growth strategy is now being put to the test in response to the surge in demand created by the competitors' exit and the mitigation of market growth.
Community group buying is a joint consumption behavior among residents within the same living area, which has rapidly spread in China since 2019 as a retail distribution model. Compared to general e-commerce, consumption is greater in cities below the third tier, with main items being fresh food and daily necessities.
According to the Chinese newspaper Zhenmian Daily on the 7th, Meituan, which was leading alongside Pinduoduo, announced on the 23rd of last month that it would halt services across all regions except for Guangdong Province and Hangzhou. Suppliers that had been providing products to Meituan received notice of the suspension without any forewarning, and cargo in transit has also been subject to complete recall. Fresh food faced urgent issues with maintaining freshness, while a mass return situation arose for general daily necessities.
This confusion has been directly transferred to Pinduoduo's Duoduo Maicai. Businesses that lost their suppliers flocked to Duoduo Maicai, leading to a surge in cargo volume. As a result, the logistics warehouses of Duoduo Maicai, numbering 72 nationwide, are currently operating at full capacity, with reports of employees collapsing from overwork due to labor shortages. It is reported that job postings for product sorting, loading, and delivery positions at Duoduo Maicai's warehouses are regularly appearing on social media and recruitment platforms, offering high salaries.
According to Zhenmian Daily, Duoduo Maicai is currently the only group buying platform operating on a nationwide scale. Duoduo Maicai, which has begun absorbing Meituan's suppliers in earnest, has started aggressively attracting new entries nationwide, as existing stores alone became insufficient to handle the demand. Benefits such as service fee exemptions have also been added. In addition to the supply chain, logistics, Director General, and warehouses are undergoing a complete overhaul.
It is also strengthening its delivery services. Duoduo Maicai is piloting an 'next-day delivery' service in the Shanghai area, where orders are completed the next day, and will start an 'immediate delivery' service from August. The enhanced delivery service is expected to be expanded to other major cities in the future.
However, the challenges facing Pinduoduo are significant. Firstly, the market growth momentum is waning. According to the Qianzhan Industry Research Institute, the community group buying market size surged by 300% year-on-year to reach 34 billion yuan in 2019, when the COVID-19 pandemic began, which is estimated to have grown to approximately 322.8 billion yuan in 2023. It is believed that growth was also maintained last year.
However, this year has seen a reversal of fortunes. Local media reported that the number of community group buying orders in the first quarter of this year decreased by 37% compared to the same period in 2023. The monthly active user count has reportedly dropped by nearly 40%.
The accumulated quality issues with fresh food and declining price competitiveness are cited as the main reasons. Community group buying is primarily active in cities below the third tier, which lack robust cold-chain supply chains compared to first- and second-tier cities, making it difficult to manage the quality of fresh food. Additionally, since the costs of cold-chain distribution are high, businesses burdened by these expenses have been passing them onto consumers, leading to a loss of price competitiveness.
As a result, many group buying platforms are closing their doors. According to the '2025 Q1 Group Buying Industry Analysis Report' released by China's Ministry of Commerce's Electronic Commerce Research Center, the number of group buying platforms in China, which once numbered in the hundreds, has decreased to fewer than 100 in the first quarter of this year.
Moreover, the immediate delivery market that Duoduo Maicai is targeting already sees fierce competition among significant frontrunners. Not only Alibaba, a leading e-commerce group in China, but also e-commerce companies JD.com and the fresh food-focused immediate delivery platform Dingdong Maicai are competing for market share.
Pinduoduo's strategy is to survive until the end in a market where competitors have disappeared. A representative from Duoduo Maicai noted to Zhenmian Daily, "Even if competitors exit, we will stick to our path," adding, "In fact, many Meituan suppliers have turned their eyes to Duoduo Maicai, and we are doing our best to seize that opportunity."