Hundreds of billions of dollars burned a year, and more than half of the players withdrew from the community group purchase

Compared with the heat of the industry in 2020, the community group buying industry in 2021 can be described as "miserable".

In the middle of 2021, a number of community group buying platforms ushered in great changes, such as Tongcheng Life filing for bankruptcy, Food Sharing Will switch to the snack track, Orange Heart Preferred Guancheng, JD.com's Jingxi Pinpin and another platform, Shihui Group, have adjusted and contracted. Under the platform change, suppliers and employees have also been affected.

After a turbulent 2021, how will community group buying develop in 2022?

Damaged suppliers

This means that Tongcheng Life, which declared bankruptcy, still owes more than 1.1 billion yuan to suppliers. Lawyers said whether the 1.1 billion yuan of debt confirmed can be repaid depends on the company's assets or whether a third party is willing to repay the debt for the company.

Not only tongcheng life, which declared bankruptcy, but also the ten groups that are still in operation, but also many suppliers are waiting to settle the payment and security deposit.

At present, a WeChat group called "Ten Hui Tuan Deposit Payment Rights Protection" has exceeded 100 people, and most of the groups are suppliers who have not yet settled the deposit and payment. A supplier from Chongqing told the first financial reporter that after the rise of community group buying, he supplied low-temperature yogurt to a number of community group buying platforms, of which Shihui Tuan is one of the platforms with large sales, with a monthly flow of 100,000 yuan during the peak period. Since September this year, he has no longer supplied the Ten Clubs. Judging from the background screenshots he provided, there are still more than 30,000 yuan of payment and 10,000 yuan of deposit outstanding.

In the view of the above suppliers, the problem is revealed from July 2021, "in June and July, there have been successive cases of suppliers' payment and deposit non-payment in cities." At the end of August, we went to the headquarters specifically, and the headquarters informed the Chongqing Shihui Group that it was profitable, and other regions such as Changsha were strategically adjusted, and then said that there was no problem, and they would pay the suppliers for the goods and related fees. At the end of August, the staff of Chongqing docking and settlement left, we contacted the headquarters, the headquarters let us contact the person in charge of Changsha and Wuhan, the other party let the person in charge of Chongqing, we also contacted and said let the wait, has not been waiting until now there is no word. ”

After waiting for no results, suppliers are considering adopting a class action lawsuit to defend their rights.

In addition, at the time of the expansion and merger of community group buying, the payment settlement problems of some suppliers have been delayed so far. A fruit supplier from Guangzhou told First Finance that it had previously supplied the community group buying platform "You, Me and You", and then merged with you and me in August 2019, but the 190,000 payment owed by you and me has not yet been resolved.

It's not just suppliers who feel pressure, but also employees. In November 2021, the Shihui Group said that since November, under the premise of ensuring the basic salary and basic living needs of employees, some of the salaries of the company's middle and back-office employees, including performance wages, have been deferred and paid at a rate of 70%. In the deferred portion, the company will calculate interest at an annualized rate of 3.0% and reissue it within Q1 2022, while matching the same amount of equity incentives.

In addition, judging from the online complaint platform black cat complaint, there are recently reported that the commission in the leader's account cannot be withdrawn, and the user reflects that the platform does not ship orders, and the return is not refunded.

Hundreds of billions burned a year

Judging from the time-consuming and laborious suppliers chasing the payment for the goods, community group buying is an extremely expensive business. This can also be seen from the financial reports of various Internet companies.

On December 30, Didi released its financial results for the second and third quarters of 2021. According to the third quarter financial report, Didi's net investment loss in the third quarter was RMB20.8 billion, mainly due to the adverse changes in the orange heart business in the third quarter of 2021, compared with a profit of RMB830 million in the same period last year. Previously, at the time of submitting the prospectus, Didi said that it would split the orange heart preferred.

In September 2021, Orange Heart Preferred, which has been in the community group purchase for more than a year, began to close the city one after another, and there is news that Orange Heart Preferred will turn to the wholesale track of TO B. In this regard, Orange Heart Preferred did not respond.

Compared with Didi, Meituan, which entered the community group buying industry after Didi in 2020, has also been investing heavily in the business of community group buying.

Wang Xing said on Meituan's fourth-quarter 2020 earnings call that "the fourth quarter generated a loss of about 6 billion yuan, half of which came from Meituan Preferred and the other half from other new businesses." "The reason for the loss of Meituan's preferred choice comes from investing more in infrastructure."

In 2021, the new business to which Meituan Preferr belongs is increasing losses every quarter. In the first quarter of 2021, the loss of new business reached 8.04 billion yuan, an increase of 489.9% year-on-year. The loss in the second quarter reached 9.24 billion yuan, an increase of 532.9% year-on-year. The loss in the third quarter reached 10.91 billion yuan, an increase of 437.5% year-on-year. Meituan said in the second quarter earnings report that the community e-commerce business Meituan Preferred was still the most important investment area in the quarter, and further expanded its geographical coverage in the second quarter and deepened its penetration of the low-line market.

Some insiders told First Finance, "In 2021, this track will burn at least 100 billion." ”

And burning money to burn out the scale of the industry, so that many platforms in 2021 to withdraw. Zeng Ying, senior analyst of analysys analysis and circulation industry, told the first financial reporter that there are certain problems in the business model of community group buying, first, low prices have become the main advantage of community group purchases, and the user loyalty attracted by low prices is also low, and the repurchase rate is difficult to guarantee. Second, in the environment of low-price competition, the faster the expansion of community group buying, the greater the loss. Third, some of these companies do not have rich experience in the commodity supply chain before, so in the case that the supply chain and operation do not have advantages, the enterprises that cannot keep up with the capital chain will withdraw from the community group purchase market in advance.

Adjust and return to rationality

From the perspective of the overall trend of the industry, the community group buying industry in 2021 can be summarized by "standardization" and "upgrading".

Zeng Ying told the first financial reporter that on the one hand, in 2021, a number of community group buying was interviewed by the State Administration of Market Supervision on the negative impact of low-price competition, after which the governments of many regions, including Shaanxi and Chongqing, have also formulated relevant guidance policies and held seminars on the standardization of community group buying, aiming to standardize the competitive order of the online group buying market. The barbaric growth period of community group buying has passed, and the future has begun to enter healthy competition, and standardization and standardization are the main trends in future development.

On the other hand, community group buying has experienced a period of industry precipitation this year, some manufacturers have withdrawn from the battle of community group buying, and the remaining enterprises have begun to return to quality development, multi-faceted upgrading of enterprise business, including organizational business adjustment, Meituan Preferred this year's heavy asset investment community group purchase, to ensure the quality of product services; regional integration, strong and strong cooperation, Ali MMC and shihui group part of the regional merger, enhance regional competitiveness; horse racing mechanism, provide cost-effective goods, buy more vegetables to achieve horse racing mechanism, regions can be merged, Strengthen the assessment of suppliers.

The above analysts believe that in 2022, the community group buying industry will enter a precipitating period, the industry will return to the essence of quality, and the first echelon of enterprises will continue to expand their business, including strengthening supply chain management, optimizing user operations, improving performance capabilities, and diversifying their business layout. Among them, supply chain capabilities, performance capabilities to reduce costs and increase efficiency, and the value mining of existing users are the key. At the same time, some platforms choose the strategy of "intensive cultivation of some areas" may appear in the future community group buying regional giants, the platform will create characteristic supply for different regions, deepen the local supply chain, continue to consolidate the advantages in the region, and different regions will have different platforms to occupy the advantages.

In the eyes of industry insiders, 2022 is still a year for many giants to make up lessons, "giants want to make up for infrastructure construction lessons." Giants may also shrink and focus on certain areas. ”