On June 23, without any prior notice, Meituan’s community group-buying platform ‘Meituan优选’ unexpectedly shut down operations on a large scale, causing almost nationwide disruption with only 6 warehouses remaining operational in Huizhou, Dongguan, Foshan, and Hangzhou. This news quickly became a hot topic and sparked widespread attention.
Starting from the morning of June 23, products on the Meituan优选 app began showing a message stating, “Due to local business adjustments, order taking in your area will be temporarily suspended starting from June 23.” Orders that were supposed to be delivered on time either got canceled or delayed on a large scale.
According to industry insiders, Meituan优选 only retained 6 warehouses in the advantaged regions of Huizhou, Dongguan, Foshan, and Hangzhou. The platform’s lack of prior announcement led to discontent and anxiety among industry participants.
Delivery courier Ms. Wang, who has been in the business for almost a year, was taken aback by this sudden turn of events. She told Epoch Times that on the morning of the 23rd, she was delivering as usual, but by the afternoon, she suddenly couldn’t place any orders, stating, “It came out of the blue, I could hardly believe it.”
In a video, a blogger who had been in e-commerce for 17 years and ran a baking factory for 10 years as a supplier for Meituan优选, shared his story. On June 22, the factory was still fulfilling orders, but on the morning of the 23rd, they received a sudden notice to suspend supplies. The factory still had over 6,000 freshly baked bread loaves piled up in the warehouse, which would go to waste if not sold in a day or two. Additionally, there were thousands of frozen cakes in warehouses in other areas that couldn’t be sold. What worried him the most was that dozens of workers in the factory were now unemployed.
He hoped that the platform would first provide a buffer period for everyone, help redirect the produced goods through other channels, clearly define the settlement time for payments to prevent cash flow interruptions for small businesses, and establish a proper communication channel for partners rather than just issuing notifications in groups.
Community group-buying is a “new retail” model promoted by internet platforms that saw rapid growth during the pandemic. Meituan优选, under Meituan, is a community e-commerce business mainly operating on a “next-day delivery + self-pickup” model, catering to the needs of local residents.
Meituan优选’s business department was established in September 2020 and within three months expanded to 20 provinces with a goal to cover thousands of cities within the year. In 2021, as the user base rapidly expanded to 690 million, there was a significant increase in transaction volume. However, the rapid expansion led to substantial losses. Meituan’s entire new businesses, including Meituan优选, incurred losses totaling 20 billion yuan in the third quarter of 2020 to 102 billion yuan in the first quarter of 2021. In 2023, Meituan’s new businesses suffered a total loss of 20.2 billion yuan, which narrowed to 7.3 billion yuan in 2024 but still remained a significant money-draining segment.
Mr. Zhao, a supplier, mentioned that he had been informed by Meituan’s senior management as early as the beginning of 2024 that there would be major actions in June of that year, but he did not anticipate the warehouse closures.
Ms. Li, a business owner, mentioned that Meituan优选 had been downsizing its warehouses for the past one to two years, showing signs that closures were inevitable, but the sudden move caught her off guard.
Regarding the reasons for the warehouse closures, Meituan responded on June 23 that Meituan优选 was undergoing transformation and optimization of its operations. The closures were part of a comprehensive expansion of immediate retail operations like flash sales and Xiang supermarket to enhance new retail services to better meet consumer demands.
However, industry insiders had their own views on the situation. Mr. Zhao believed that the closures were due to losses. Mr. Cao from Meituan优选 stated that based on industry analysis, this move might be related to JD.com’s (京东) delivery service.
Mr. Cao explained that previously, there had been fierce price competition between JD.com’s delivery and Meituan’s delivery services, prompting the authorities to intervene and request an end to price wars and subsidies. After the intervention, the competition cooled off. With high costs for Meituan’s delivery service and Meituan优选 itself not being profitable, the lack of prospects led to the decision to cut losses rather than continue operations.
Observers noted that community group-buying rose quickly but contracted just as fast. The abrupt closure of Meituan优选 serves as a reminder for industry participants and consumers to view emerging business models with rationality.