Didi's group buying sector plans to downsize in September - PingWest

Didi's group buying sector plans to downsize in September

According to Chinese independent magazine Caijing, Didi's Chengxin Youxuan, a Chinese grocery group buying company, makes significant operations adjustments, including layoffs and service shutdowns in multiple cities. Half of the product development team has already been laid off.

"Mid September will be a turning point. By then, Chengxin Youxuan will gradually downsize. The first wave of downsizing will shut down operation in 60% of cities," a Chengxin Youxuan employee told Caijing.

"In fact, shutdowns are already underway in several cities. Chengxin Youxuan will shut down Beijing operation soon," said another employee at Chengxin Youxuan.

Context：

In its research report, China Merchants Securities anticipates: in 2021, the grocery group buying industry will have a 20 billion yuan in deficit.

Nice Tuan, one of the early players in the grocery group buying industry, announced on August 21st that it would shut down operations in 21 cities.

Multiple news outlets had reported that Meicai, a grocery group buying company aiming to connect farmers with buyers, is drastically laying off staff. The Beijing-based company later responded by saying they are just adjusting and optimizing their company structure.

The State Administration for Market Regulation (SAMR) fined several grocery group buying companies (Pinduoduo's Duo Duo Maicai, Meituan Select, Didi's Chengxin Youxuan, and Nicetuan) 1.5 million yuan ($230,000) each for improper pricing behavior in March this year. The amount of the fine reaches the maximum under current law.

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