GGV leads round for Chinese community group buying business
Shihuituan, a China-based community group buying platform also known as Nice Tuan, has raised $81.4 million in an extended Series C round led by GGV Capital.
Joy Capital, Qiming Venture Partners, Ince Capital Partners, and Cygnus Capital also took part. The new round comes five months after Joy Capital led a $88 million investment.
Founded in June 2018, Shihuituan offers fresh produce through a mini-program on Tencent Holdings' WeChat platform. Each community has a leader who aggregates demand for products and places orders. Customers pick up items from specified places such as convenience stores.
The company has operations in more than 100 Chinese cities, with gross merchandise value (GMV) reaching RMB650 million ($91 million) in April. Peak daily orders for the month came to 1.6 million. Shihuituan has gained traction following its merger with industry peer Niwoning.com - a portfolio company of GGV and Hong Kong-listed CMBC Capital - last August.
Ying Chen, the founder of Shihuituan, noted that the focus is mainly on lower-tier cities. “We can create more value in lower-tier cities and rural areas, where the customers have fewer choices. That’s where we can provide the largest commercial and social values,” he said.
The group-buying model isn't necessarily a good fit with the fast pace of life in first-tier cities. It typically takes several days for orders to be fulfilled and customers often have to go to a specific place at a specific time to collect items.
Chen expects the concept to evolve as "community new retail," comprising brick-and-mortar stores as well as mini-programs. This corresponds with the view of Huafeng Yu, founder of fresh produce retailer Benlai Group, who told AVCJ that community group buying cannot be sustained without offline stores.
Community group buying deals have dropped significantly since the second half of 2019. Many smaller players have either gone bankrupt or been acquired by larger operators. Larger recent transactions include a $100 million commitment to Tongcheng Life, a group buying business incubated by Hong Kong-listed online travel agency Tongcheng-Elong.
More on Greater China
Latest News
Asian GPs slow implementation of ESG policies - survey
Asia-based private equity firms are assigning more dedicated resources to environment, social, and governance (ESG) programmes, but policy changes have slowed in the past 12 months, in part due to concerns raised internally and by LPs, according to a...
Singapore fintech start-up LXA gets $10m seed round
New Enterprise Associates (NEA) has led a USD 10m seed round for Singapore’s LXA, a financial technology start-up launched by a former Asia senior executive at The Blackstone Group.
India's InCred announces $60m round, claims unicorn status
Indian non-bank lender InCred Financial Services said it has received INR 5bn (USD 60m) at a valuation of at least USD 1bn from unnamed investors including “a global private equity fund.”
Insight leads $50m round for Australia's Roller
Insight Partners has led a USD 50m round for Australia’s Roller, a venue management software provider specializing in family fun parks.