Chinese community group purchasing business receives $31m

Other participants include IDG Capital, Sky9 Capital and Jiawei Gan, the former COO of online-to-offline local services platform Meituan Dianping. All of the investors backed the company’s $30 million Series A round last November.

Songshupinpin was founded in 2018 by Jun Yang, who previously spent a decade with Meituan-Dianping - which went public in Hong Kong last year - as a member of the core team. The company's model is based on the recruitment of so-called “team heads” - typically young full-time housewives who are social media savvy and have enough free time - for different residential districts.

These women create Wechat groups, adding people who live in their residential complex or district, and then post ads detailing special offers on a variety of products. Orders are aggregated and Songshupinpin sources items directly from the manufacturer or brand. These are shipped to the team heads who are responsible for offline distribution.

The company claims this approach saves on costs because items are bought in bulk and team heads are paid in commissions. From its launch last August to January, average monthly transaction volume was RMB100 million ($15 million). Songshupinpin's services now cover more than 10,000 residential districts in 30 cities.

Community group purchasing businesses have received a steady stream of PE and VC funding in the past couple of years. There are at least nine other major players in the space, including Linlinyi, Xiaoqule, and Meicai, which primarily focuses on agricultural goods.

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• Topics
• Greater China
• Consumer
• Technology
• Early-stage
• China
• TMT
• Hillhouse Capital Management
• Sky9 Capital