CHINA – Chinese ecommerce giant is investing US$700 million in acquisition of additional stake in community group-buying platform Xingsheng Preference Electronics limited.

The share acquisition will give some level of control in the company and provide it with a platform from which it will officially join the online fresh foods market.

Xingsheng which is based in the Chinese province of Changsha serves community families across 14 provinces of the Asian country.

It allows consumers to purchase fresh produce and other daily supplies through a WeChat mini-programme and then pick up the products from branded convenience chain stores in their neighbourhood.

The e-commerce platforms focusing on fresh foods and daily essential is particularly strong in Southern and Central China.

As of 2019, Xingsheng’s gross merchandise volume (GMV), a metric used in the e-commerce sector to measure transaction volumes, reached 10 billion yuan (about US$1.4 billion). says that the investment is expected to create synergies between its business and that of Xingsheng in low-tier cities “through close collaboration in technology, supply chain, and logistics.

Earlier, Xingsheng had closed about US$800 million in a funding round led by New York based buyout giant KKR&Co, with participation from a number of investors including Sequoia Capital China, and Huaxing Growth Capital – the flagship investment platform of China Renaissance.

The fresh food delivery market although rapidly expanding is also experiencing cut-throat competition with a number of big Chinese tech firms trying to have a piece of the pie.

Just a month ago, Didi Chuxing- a Chinese ride hailing firm- launched a community group-buying service through a WeChat mini-programme. With the app, consumers can order groceries and fresh produce from the convenience of their homes.

During the same month of November, another e-commerce platform Pinduoduo announced plans to raise as much as US$6.1 million, with a significant part being invested in expand the platform’s next-day delivery for fresh produce.

Xingsheng is also 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.

Liked this article? Subscribe to Food Business Africa News, our regular email newsletters with the latest news insights from Africa and the World’s food and agro industry. SUBSCRIBE HERE