(Yicai Global) Dec. 14 -- Alibaba Group Holding, Pinduoduo, and Meituan said they will continue to offer bulk-buying services, refuting speculation to the contrary among China’s netizens, after a leading newspaper criticized the business model.

Alibaba’s grocery store chain Hema Fresh dismissed conjecture it would quit the group-purchase business as a “rumor” in a Dec. 12 statement, while Pinduoduo said that it had no knowledge of the claims. Meituan labeled it speculation.

An editorial in the People's Daily on Dec. 11 suggested that large tech firms should focus on technological and scientific innovation instead of using their ample resources to gain quick profits. Social media users took to Weibo and Zhihu afterward, saying the tech giants would pull out of bulk-buying as the business model harms small vendors because platforms offer big subsidies to kill off competition.

Group-purchasing has become popular in China, particularly during the Covid-19 epidemic early this year, as consumers could order groceries from home -- made cheaper by the large quantity purchased -- with delivery to their neighborhoods.

China’s tech giants have embraced the model one after another. Ride-hailing services provider Didi Chuxing debuted its fresh produce service Chengxin Youxuan in June followed by Meituan setting up its own Youxuan division in July.

Pinduoduo launched Duoduo Maicai, a vegetable-buying channel, in August. Alibaba set up Hema Youxuan in October and started recruiting group leaders after it was reported that the unit received USD4 billion from its parent company. In the same month, Suning.Com inaugurated Suning Food Market in Beijing, and on Dec. 22 JD.Com said it would invest USD700 million in grocery platform Xingsheng.

Editor: Emmi Laine