(Yicai Global) Sept. 8 -- Chinese car-hailing platform Didi Chuxing’s grocery business Chengxin Youxuan is reportedly shrinking to less than a third of its current scale.

The fresh food delivery platform will reduce its operating area to nine provinces in China from the current 31 provinces, LatePost reported yesterday. The adjustment is expected to be completed before Sept. 15, it added.

Making the decision took only one week from proposal to finalization as Chengxin Youxuan's management believes that the market in most provinces is already occupied by rivals Duoduo Maicai and Meituan Youxuan, according to the report. The remaining nine provinces are considered to have more room for development.

The Beijing-based ride-hailing giant launched its grocery delivery business in June 2020, earlier than other tech behemoths Alibaba Group Holding, Meituan, Pinduoduo and JD.Com.

Jobs will be lost but no specific solution has been formed yet, sources told LatePost. At present, Chengxin Youxuan has about 10,000 employees after the firm laid off some 30 percent of its staff by July. As of last December, the company boasted a headcount of 16,000.

An acquisition is not on the horizon. Earlier rumors of ByteDance or JD.Com being in talks to buy Chengxin Youxuan are not true, several people close to the latter said to the same source.

The parent has its own worries. Shares of Didi Chuxing, the largest shareholder of Chengxin Youxuan, have fallen nearly 38 percent since the company went public last June after the government announced a cybersecurity review of it just days after the initial public offering.

Chengxin Youxuan is not running out of money yet. The firm issued USD3 billion of zero-coupon convertible bonds to Didi Chuxing last March. The fresh food platform is still looking for opportunities and will not easily close, according to sources.

Editor: Emmi Laine, Xiao Yi