JD.com to invest $700m in Chinese community group-buying firm Xingsheng

Chinese ecommerce giant JD.com announced that it has entered into a preferred share purchase agreement to invest around US$700 million in Xingsheng Preference Electronic Business Limited, a community group-buying ecommerce platform.

The deal is subject to customary closing conditions, according to a Securities and Exchange Commission filing.

Photo credit: Xingsheng

Founded in 2009, Xingsheng is based in Changsha, the capital of China’s Hunan province. With the platform, users across 14 provinces in the country can order online and pick up their goods in convenience stores in the neighborhood.

The strategic investment is expected to create synergy between JD.com and Xingsheng in lower-tier cities through “close collaboration” in technology, supply chain, and logistics, said the ecommerce giant.

In July, it was reported that the group-buying startup was looking to close its US$800 million series C+ round, which would value the company at US$4 billion. The round was led by KKR & Co., along with Sequoia Capital China, Tencent, China Renaissance-backed Huaxing Growth Capital, Eastern Bell Capital, and Capital Today.

The pandemic has boosted the community group-buying segment in China as people shift to buying fresh food and daily necessities online. According to a report by iiMedia, China’s online grocery market is expected to grow by 62.9% in 2020 to 264 billion yuan.

Xingsheng is up against rivals such as Nice Tuan – which raised US$196 million in a series C3 round in November led by Alibaba and Jeneration Capita – and Tencent-backed Missfresh which recently secured US$305.6 million in strategic investment from a Qingdao government-guided consortium. There’s also Tongcheng Life, which closed US$200 million in series C funding led by Joyy.