Image source @ Visual China
Text | Retail Business Finance, author | Crane Xiang
With the past of the "inflection point year" of 2021, the emerging community e-commerce has experienced a return to the value from high-minded and short-term competition to steady and long-term competition.
Under the big wave of sand and sand, a number of enterprises such as Tongcheng Preferred, Food Enjoyment Club, Ten HuiTuan, Orange Heart Preferred and so on either collapsed externally, or internally attrition, and eventually transformed or withdrew from the table. The remaining Duoduo buy vegetables, Meituan Preferred, Taocai Vegetables, Jingxi Spelling, Xingsheng Preferred, etc. have also entered the new cycle of "spelling innovation" and "fighting new infrastructure laying" from "spelling subsidies".
At the time of the rise of the first and second retail revolutions, players were building tall in emerging market territories. At present, China is experiencing the third retail revolution, and the construction of oases on the Gobi Desert and the increase in the stock market are becoming more and more obstructive and long-term.
In the process of changing the consumer Internet to the industrial Internet, community e-commerce is gradually becoming a new model that leverages the county consumer market, improves supply efficiency and facilitates the lives of community residents.
01 The track cools down and returns to the essence of retail
The COVID-19 epidemic has "ripened" community e-commerce, and at the same time accelerated the cultivation and strengthening of online channel consumption models.
Under the background of the continuous upgrading of resident consumption, the acceleration of the upward trend of agricultural products, and the rapid development of the Internet and information technology, at the end of 2020, the scale of China's fresh e-commerce market reached 364.1 billion, an increase of 42% year-on-year; the total annual turnover of community e-commerce was about 72 billion, an increase of 78% year-on-year.
At the same time, since the end of 2020, the entire industry of community e-commerce has rapidly moved towards standardization under constraints, and various platforms have thought more about the sustainable development of the model.
The most obvious change is that community e-commerce has entered the intensive cultivation stage of pursuing the ultimate cost performance; the efficiency competition under the normalization of competition has begun, and the industry has also entered a new round of evolution and elimination.
After several rounds of major reshuffles, the adherents of the orderly and low-key march such as Duoduo Buying Vegetables, Meituan Preferred, and Taocai Cuisine were low-key entrenched and turned from attack to defense, such as Xingsheng Preferred and Jingxi Pinping; Orange Heart Preferred and Ten HuiTuan were transformed into survival in the retreat.
Since then, the supervision force and the end of the price war have become an important watershed for community e-commerce to "advance" to community e-commerce, and the focus of community e-commerce has gradually shifted from drainage to core construction such as warehouse allocation and supply chain construction.
When community e-commerce gradually enters a new stage of pursuing the ultimate cost performance, improving the quality of goods and services and operational efficiency, it means that the entire industry is thinking about the "essence of retail".
Today's community e-commerce emphasizes the creation of a "digital network system", focusing on the competition of the supply chain and the digital opening of community stores, rather than limiting its attention to the digitization of the traffic and consumption behavior of a few bundles of cabbage and a few pounds of fruit.
From this point of view, in the process of integrating the digital economy and people's livelihood services, community e-commerce has also become a force after the structural rebalancing and re-optimization of online and offline retail.
Community e-commerce is interested in the upgrading of the warehousing and distribution system and the reconstruction of the supply chain, and finally the penetration of scientific and technological forces in every link of the industrial chain, and whether each link can achieve cost reduction and efficiency.
Source / Guohai Securities
Specifically, community e-commerce adopts the "store manager (group leader) + community" model to gather deterministic demand through consumer terminals, reverse promote the deterministic supply of source manufacturing and agricultural product bases, and provide more cost-price advantaged products in the performance mode of "production/marketing warehouse + landing collection", so as to achieve the unity of low cost, low loss, high efficiency and high value.
At the production end, from Ali's heavy investment to build a planting demonstration base, Pinduoduo to create more than a thousand "Duoduo Farm" projects, Meituan's Meituan preferred "fresh and direct harvesting" to help agricultural products "go out of the village and into the city" with scientific and technological innovation, and then to the "10 million new farmers" plan announced by Jingdong "Jingxi Farm"... The "agricultural ideal" of the Internet platform lands from the source of the product, and through the community e-commerce direct procurement direct sales network, it is possible for the source products to connect directly to the family table.
At the supply chain end, community e-commerce is based on the social collaboration model and mobilizes a large number of idle but effective social resources. At the same time, community e-commerce enterprises have established a logistics system that goes deep into the county and township markets in a short period of time to ensure that the goods purchased by local residents can be delivered to the corresponding group points within 24 hours. The laying of this logistics infrastructure is not fully realized by traditional e-commerce retail enterprises.
02 Continuous "evolution" of community e-commerce
The consumption increment leveraged by community e-commerce mainly comes from the low-line market and urban consumption formed by urbanization or the development of new areas.
Although the income levels of first-tier cities and county residents are different, with the growth of per capita disposable income and the penetration of digital services, the circulation conditions and consumption environment of the sinking market have been continuously improved, and the gap between the consumption demand and quality of urban and rural residents in eating and living is converging.
Source / iResearch
First of all, community e-commerce uses "fresh" to leverage the consumption potential of the county.
Consumption capacity and consumption habits determine that the county consumer population's pursuit of high quality and low price is no less than that of first- and second-tier cities.
Compared with the far-distance e-commerce of "origin warehouse + one piece of agency", the core point of community e-commerce is to focus on short-distance real-time consumption scenarios, and effectively solve the problems of short timeliness, small sales radius and uneven distribution of fresh products, so that the demand for "fresh" by county consumers can be satisfied.
With high-frequency, just-needed fresh products and daily necessities as the entry point, and then fresh agricultural products to drive multi-category daily low-frequency consumption, through the sales of fixed production, reverse intensification of the way to completely leverage the county consumption potential, the community e-commerce this move is altruistic and self-interested.
Secondly, retail standards and premium products use community e-commerce to complete the brand "downward".
Inherent factors such as market size and logistics costs affect the direct supply of domestic standard retail to the county market, and as a result, the lack of retail categories and brands inhibits the economic vitality of the county market.
Retail brands circulating in first- and second-tier cities have found a new channel for brand sinking with the help of the market layout of community e-commerce and the overall coordination between regions, which ultimately promotes a win-win situation for retail brands, community e-commerce and county consumers.
In addition, the "fingertip consumption" of silver-haired people continues to stimulate the economic vitality of the county.
Relevant surveys found that nearly half of the community e-commerce consumers are middle-aged and elderly silver-haired people, and more than three have become office workers. The consumption model of "placing orders before bedtime, arriving the next day, and picking up in the community" provided by community e-commerce not only meets the consumer demand for convenience of mainstream people, but also significantly increases the frequency of consumer procurement, and even procurement categories.
According to the "2021 China County Fresh Consumption Upgrade Report" released by iResearch Consulting, community e-commerce has become an important engine for county consumption economic growth. Taking Renshou County, Santai County and other regions in Sichuan as an example, from January to October 2021, the sum of the orders for hairy crabs on the e-commerce platform of a community in the region reached 98% of Beijing's orders.
Such examples are actually not uncommon, in the central and western regions, the original limited to the traditional commodity circulation, purchase channels of county residents, a large number of unreleased consumption upgrade demand is difficult to be satisfied, this contradiction is concerned and solved by the community e-commerce, and the market increment released by the central and western regions is well transformed into the profit space of community e-commerce.
epilogue
The value of community e-commerce depends not only on the existence of a verifiable and sustainable business model, but also on whether certain inherent pain points have been solved in a specific historical period.
In the final analysis, community e-commerce starts from the innovation of business models, and the "group leader system", "pre-sale system", "collection single to store system" and so on have achieved their business models.
The social value of this business model is to use scientific and technological means to make farmers' "money bags" bulge, promote the digital transformation of rural agricultural economy, and help rural revitalization.
When we stand at a higher perspective and start from the entire business chain, community e-commerce may become a fertile soil for the future development of Chinese business, which not only continues the expansion and prosperity of e-commerce in the past decade, but also realizes the efficient integration of industrial chain resources in the continuous iterative innovation of Internet technology and business model, and promotes the value-added benefits of the industrial Internet "1+1>2".
At one end is the rapid development of the new economy, and at the other end is the digital upgrading of traditional industries. Just like the "dumbbell theory" mentioned by Zhang Lei in "Value", technology Internet enterprises and the real economy, as the two ends of dumbbells, are playing a role in integration and innovation in digital people's livelihood services.