CDH leads round for China community group buying player

GGV Capital, Ince Capital Partners, and CMB International took part. The proceeds will be used to strengthen the company's warehousing, distribution and the overall supply chains, while supporting geographic expansion.

It takes Shihuituan's funding to more than $300 million up to date. Most recently, GGV Capital led an extended Series C of $81.4 million in May. This followed an $88 million round led by Joy Capital in January.

Founded in June 2018, the company 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 and has 100,000 community leaders serving 20 million family customers. Its gross merchandise value (GMV) reached RMB650 million ($91 million) in April alone. Shihuituan has gained traction following its merger with industry peer Niwoning.com - a portfolio company of GGV and CMBC Capital - last August.

During the COVID-19 pandemic, the company directly sourced products from the ultimate suppliers. It also claims to have organized the cultivation and delivery of fresh produce and personal protective equipment. Shihuituan was designated an official supplier by numerous provincial and municipal governments.

The company focuses on lower-tier cities where customers have fewer choices. It plans to build three million self-pickup points in the next three years, with the objective of ensuring a majority of the country's urban and rural residents walk no more than five minutes to collect their orders. 

Another goal is guaranteeing next-day or same-day delivery, At present, it normally takes up to one week for a group buying order to be fulfilled.

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. Recent transactions include a $100 million commitment to Tongcheng Life, a group buying business incubated by Hong Kong-listed online travel agency Tongcheng-Elong.

There are other established players in the fresh produce market. Chinese online grocer Miss Fresh recently raised $495 million, which is said to be the largest private round ever seen in the segment.