Who is most afraid of the death of community group buying?

Image source @ Visual China

Text | Lu Jiu Finance

Community group buying burned hundreds of billions, in reality wrote a big "miserable" word. In the hustle and bustle of "community group buying is dead", Xingsheng Preferred is still optimistic about this track. Compared with the Internet giant, it can only fight to the death.

Recently, the media reported that the Ten Hui Group is mired in the quagmire - there are fewer and fewer community group buying players, is this business model dead?

Just half a year ago, this track was still thriving and fiercely competitive. Ali, JD.com, Meituan, Pinduoduo, Didi and other giants are participating in various forms, in addition to a series of startups such as Xingsheng Preferred, Shihui Group, Tongcheng Life, and Food Enjoyment.

However, half a year later, there are still less than five active community group buying companies, of which Xingsheng Preferred is the only enterprise known as the running through model.

Recently, Lujiu Finance and Xingsheng Preferred conducted in-depth communication. The company believes that community group buying is an asset-heavy model that requires a lot of investment in manpower and material resources. However, Xingsheng Preferred also insists that the community group purchase pre-sale + self-pick-up model can save at least 20% of costs and will lead the retail industry in the next 10-20 years.

However, on the other hand, when Lujiu Finance communicated with Ali, Meituan and other corporate insiders, it was found that the giants' enthusiasm for community group buying is gradually decreasing, and now it is only used as a supplementary link in the supply chain of the sinking market, and it is likely that the future will be "public welfare" of this business to some extent.

For the giants, it doesn't matter if the community group buying fails, but for a startup like Xingsheng Preferred, the community group buying is all.

Perhaps, the company that is most afraid of the death of community group buying is the most anxious.

The Ten Clubs went into the ICU

Following the death of Tongcheng Life, the Shihui Group, which is also one of the "old three groups" of community group buying, has also recently been deeply involved in the suspicion of "explosion of thunder".

According to Caijing, most of the workstations in the beijing headquarters office of the Shihui Regiment are empty, and some office areas are filled with debris. A security officer who claimed to be a member of the Ten Hui Regiment came forward and said that he had to receive more than a dozen people who came to the door every day to ask for money, some million yuan more, and fewer tens of thousands of yuan.

Backed by Ali, the Ten Hui Group has raised more than $1 billion and was previously a "powerhouse" in the industry. But in the track of the giant melee, Ali seems to be more willing to develop his own "pro-son", choosing to integrate the hema fresh and Taocai vegetable business, and turning off the link of the Ten Hui Group.

The Ten Hui Tuan is more like the "stone" that Ali felt the stone to cross the river.

"Whether the community group buying model can achieve profitability is yes, but capital cannot accelerate the ripening of this industry." The departing staff of the Ten Hui Group told Lu Jiu Finance in this way.

What is the essence of the business model of community group buying? In the view of this former employee, it is to supplement the scene that traditional e-commerce cannot deliver instantly, and to drive the sales of low-frequency and high-profit products such as beauty and daily necessities through the distribution of high-frequency and low-profit consumer goods such as fresh fruits and vegetables. Realizing the "last meter" delivery mechanism of the regiment leader to his home is also an upgrade of the service scene.

From the perspective of business model, fresh is a low-margin product, and whether its supply chain construction is perfect and whether it can be negotiated in quantity is the key point for the survival of the platform. In the early stage, several established community group buying platforms were refined and deeply cultivated, carefully selecting fresh products, and most of the leaders also required home delivery.

However, after the community group buying represented by the Internet giants came in, the commercial logic of the entire community group buying began to be disordered, and the extensive play of capital soon made the community group buying platform have to join the ranks of the inner volume.

Lu Jiu Finance learned that the "latecomers" Of Internet capital giants are relatively weak in the supply chain, they do not care about fresh products, but set their sights on milk, beverages and other standard products. Standard products have formed an inherent price system cognition in the market, how to run the volume, capital giants are still the killer of massive subsidies.

1 yuan of milk, 1 cent of 8 eggs... Various subsidies emerged in an endless stream, and soon cultivated user habits into wool, and the price system built by manufacturers was also impacted.

The leaders of the troupe in the center of the stage also found the "way to get rich" in various scrambles: 1 yuan 1 piece of milk was sold, 10 yuan was recovered and then sold back to the platform, until the platform funds were emptied.

This is a game rule that everyone defaults to: the platform side needs bright data to obtain capital "ammunition", the leader of the group is working hard in the gray area, and the capital side needs to have a better capital story...

A number of industry insiders told Lu Jiu Finance that the various problems faced by the Shihui Group are actually the epitome of the chaos of group buying in the entire community.

Prosperity Preferred: Community group buying can't die

Tongcheng Life, Food Sharing Club, Ten Clubs, Orange Heart Preferred, plus this time the Ten Clubs... A long list of community group buying platforms, in this round of racing, or turn around, or fall behind.

Is there any salvation for community group buying? This may be a question that hangs in the minds of all practitioners.

At present, community group buying is still a capital-driven industry, before the major platforms are more like "a visit here", there is no deep foundation and moat, once the capital withdraws, subsidies weaken, leaving only a set of bright data reports. From the perspective of the market, the current remaining at the table, in addition to the Internet giants, is only prosperous and preferred.

As the pioneer of the community group buying track, Xingsheng Preferred is also the only remaining seedling of the "old three groups". The encounter between Tongcheng Life and the Ten HuiTuan inevitably makes Xingsheng prefer to have a feeling of cold lips and teeth. As early as September 2021, Xingsheng Preferred proposed the "Rock Plan", suspending the opening of new cities, choosing to retreat and wait for dawn.

"This business model (community group buying) must be leading the retail industry for the next 10-20 years." The relevant person in charge of Xingsheng Preferred told Lu Jiu Finance, but this industry is an asset-heavy industry, not an industry that can work immediately by burning money on the Internet in the past.

In the view of the person in charge, the infrastructure of this industry is still very poor, and it requires a lot of manpower, material resources, financial resources and energy to build and polish.

Why can community group buying only run heavy assets, but cannot complete industry integration through mergers and acquisitions of giants? The person in charge said that community group buying is not a single "daily standard product with high frequency and low gross profit driven by low frequency and high gross profit" as the aforementioned industry insiders said, even in terms of standard products, it also has a price advantage. He said: "Pre-sale + self-pickup, the core is to greatly reduce the cost of commodity circulation, our estimation is to save 20% to 50%. ”

A FMCG brand Zhengzhou district agent told Lu Jiu Finance in a concise manner that the meaning expressed by Xingsheng Preferred is to try to complete the direct docking from manufacturers to consumers through community group buying, and save the warehousing costs and secondary transportation costs of dealers at all levels through accurate matching and high turnover.

The future does not need "capital barbarians"

Is Xingsheng Preferred's confidence in the industry based on its own position, or is it really established?

"Community group buying wants to break the dealer model, in fact, let the manufacturer hand over the lifeblood to the platform, which is not what the manufacturer wants to see." A community group buying supplier in Henan told Lu Jiu Finance that even in the early days when the community group buying did not start the inner volume, Procter & Gamble, Vinda and other companies only specially opened up community group purchase service departments, formulated a commodity strategy that is different from terminal stores and e-commerce channels, and tried to make the price system clear and avoid conflicts with offline dealers.

In his opinion, manufacturers will never "put eggs in one basket". In addition, the dealer system not only undertakes to open up the market and shop goods, but also bears the role of advance capital, which is far from being comparable to community group buying.

Facts have also proved that manufacturers do not have the correctness of all-in-community group buying. "After the rolled-up community group buying, a large number of competition for the head of the group began, and no one cared whether it would impact the supplier's price system." The above suppliers said that at the end of 2020, Huahai Shunda, Weilong and other suppliers have successively issued notices saying that the supply of several community platforms with serious low prices is prohibited, and the distribution right will be cancelled if the impact is bad.

"The operating costs of offline supermarket stores themselves are very high, the losses of dealers and customers are too large, and these platforms cannot be low prices forever, and the ultimate loss is still the interests of manufacturers and dealers." The above-mentioned suppliers said that the thinking of Internet giants entering the community group purchase is a kind of monopoly thinking, and he asked: Subsidies are not a long-term solution, how to make profits in the later stage? Perhaps, after forming a market share, squeezing the profits of dealers and farmers upstream and raising consumption costs downstream is the inevitable way.

More importantly, many people in the industry believe that this capital game has not achieved a flat link of the scene in many links, but has increased the cost.

The above suppliers take fresh and other non-standard products as an example, and the previous layers of wholesalers are actually the "gatekeepers" of each link, and these self-employed people will be divided into different channels according to different products. However, in the collection or local mining of the platform, full-time personnel are required to sort, pack and distribute, and these costs are difficult to achieve the "cost reduction and efficiency increase" mentioned above compared with the role of market-oriented wholesalers.

In addition, with the intensification of consumer competition, the platform has relaxed the quality threshold in the selection of non-standard products, coupled with the demand for price wars, the community group purchase channel can easily become the "sewer" of tail goods and defective products, reducing the brand image of the manufacturers who cooperate with them.

The community group buying related to people's livelihood has attracted the attention of the regulatory authorities and intervened to rectify it. From authoritative media comments "Don't just worry about a few bundles of cabbage" to the "nine no's" regulations issued by the Municipal Supervision Bureau in some areas, they are all correcting the deviations of community group buying. In June last year, the regulation that community group purchases could not appear "penny and second kill" goods was even more poured cold water on the head.

The disenchantment of capital subsidies seems to make community group buying "formatted" and returned to the original state. But can you really go back? Several executives of the head platform privately told Lu Jiu Finance that the Internet capital behind it is more confused about the prospects of community group buying - in the face of consumers who are accustomed to wool on the platform, it is difficult for the platform to form consumer loyalty, and the fresh-based operating system is also difficult to form profit points.

Some senior industry insiders also privately revealed to Lu Jiu Finance that according to its understanding, the regulatory authorities have relevant requirements, and capital must no longer arbitrarily disrupt the community group buying industry.

Problematic grassroots ecology

When the tide of community group buying receded, the leaders of the group who were competed by major community group buying platforms in the past were also stranded on the "beach".

"Today's MEITUAN goods have been sold out, tonight at 11 o'clock to re-list the goods, there is a need to place an order, you can see the time to place an order as soon as possible!" The new round of the epidemic in Zhengzhou has made Xiaoyu (pseudonym), the leader of the community group buying group, busy with a rare time.

Xiaoyu is the head of a newly delivered community in Zhengzhou, and she just moved in, pulled the neighbors of the decoration group in and re-formed the group buying group of less than 100 people. After establishing the group for half a year, she will send information to the group on time and point every day, but almost all of them are in a "stand-alone" state, and few in the group can get a response, only when they encounter special goods with relatively large preferential efforts, after sending a red envelope, there are only a few responses.

"Looking for something to do with your children at home, I don't expect to live on it." Xiaoyu told Lu Jiu Finance that the main force of her current community group buying is mainly the elderly and office workers, and compared with the self-pick-up points of other community group buying, she will deliver the dishes directly to the door. If some office workers work overtime temporarily, they can also tell her in the group to change the time of delivery to the door.

She admits that it is not uncommon to send a message a day with only a few dozen yuan of orders, "If it is not a part-time job, the labor cost of just sending it to the door one by one does not match the remuneration obtained." ”

Like the leader of the group, Xiao Yu, Master Li, the owner of the fruit shop in the southern suburbs of Zhengzhou, clearly felt the ebb and flow of community group buying. He recalled that at the beginning of 2021, many platforms came to negotiate self-pick-up points, and now only Duoduo and Meituan are left.

The community group buying is not long, which is the simple judgment of the shopkeeper. He said that office workers use community group purchase to pick up, and rarely can pick up goods on time on the same day, especially fruits and vegetables, which may deteriorate overnight. He personally saw consumers pick up the goods, turned his head and threw them into the garbage bin, "Community group buying has no advantage in terms of standard products, they have all gone downstairs to the pick-up point, why not buy directly in the supermarket?" Have you ever seen a dragon fruit the size of a duck egg? 9 cents 1 on the platform, there is no way to eat. Master Li said with a smile.

The regimental commander who is almost lying flat, without the passion of the subsidy war, is almost a life-or-death decision for the community group buying. Xiao Meng, a regimental commander in Luoyang City and County, told Lu Jiu Finance that the subsidy of the regiment leader was far from the peak. He revealed that the previous sales of 200 yuan can have a commission of about 8 yuan, but now it has dropped to about 2 yuan, and there has been no enthusiasm.

"Originally I wanted to make extra money, but now I don't make money, and the task of the regiment leader is also increasing, requiring a large number of circles of friends and communities every day." Xiao Meng said that at present, many leaders of the county are also the heads of many platforms, which of a certain type of product is preferential, and they will promote this type of product on the same day, and there is no loyalty to speak of.

"Can't do it anymore this year!" Compared with the platform that can't be lost, what lacks confidence in the future of community group buying is a front-line participant like Xiao Meng. This is a microcosm: it is not only a few thunderstorms that are in trouble, but also the grassroots ecology.

"Public welfare" of the big factory, "desperate" prosperity preferred?

The tide receded and fang knew who was swimming naked.

Even internet giants with deep pockets cannot be caught in an endless money-burning war. In fact, after the previous round of money-burning war on consumer education, today's community group buying has fallen into a state of saturation or even excess.

The above-mentioned community group buying executives chose to change careers after leaving, leaving the track that made him pay a lot of hard work. A senior BD post talent of the community group buying platform found that he could not find a job in the community group buying industry after leaving his former owner - from grabbing talents to rejecting talents, refracting industry players have entered the conservative layout stage.

Where is the future of community buying? It is difficult to see through the fog in the market inside and outside the industry. However, as an extension of the traditional e-commerce instant service scenario, no one easily gives up the idle chess move of community group buying.

Ali supported the Ten HuiTuan and hatched Taocai dishes; Jingdong invested in Xingsheng Preferred, and had its own position, Jingxi Fight, which was likened by people in the industry to "first raise a dry son, and then give birth to a pro-son". Feeling the experience of startups, the empathy for the market may not be strong, and the performance of the two can only be regarded as decent in the industry.

An industry insider close to Meituan told Lu Jiu Finance that meituan is doing better at present. He believes that meituan joins the battlefield of community group buying, more in the field of instant delivery of defensive layout, with the implementation of the strategy of all things home, with the army of riders, meituan, than traditional e-commerce can easily solve the "last meter" delivery problem.

However, if the Us group previously regarded community group buying as the final harvester of traffic in the second half, then now, after three quarters of adjustment, the Us group has taken this battlefield as an important supplementary link in the supply chain of the sinking market. The difference between these two positions will lead to a huge change in the strategy and tactics of Meituan for community group buying.

Mr. Guo, an Internet veteran, believes that the sinking market needs to improve the supply chain, which in the past "father does not hurt the mother and does not love" because it is thankless. But now, the Internet giants who are still on the community group buying track, under the regulatory logic of "don't worry about a few bundles of cabbage", in the era of rural revitalization and common prosperity, perhaps the strategic focus to the direction of public welfare to help farmers is the best choice.

In the case of Pinduoduo, since its birth, the genes of multi-person grouping and selling explosive agricultural products have been branded, and the addition of community group buying in the upward trend of agricultural products makes Pinduoduo more easily cut into depth than other Internet giants in the field of community group buying in the county.

In view of the future layout of community group buying, Lujiu Finance consulted Meituan and Pinduoduo, and both sides did not comment on this. As for Ali, the beginning of the year also did not disclose the new plan for future community group buying. Behind the giants' low profile, in fact, is the intensive adjustment of strategy and tactics, and community group buying is not as prosperous as it was a year ago.

There are public reports that Ali, JD.com, Meituan, Pinduoduo and other e-commerce platforms have actively sought a way out for unsalable agricultural products during the epidemic and regarded them as long-term projects to "break into the sinking market and continuously establish a sound logistics supply chain system." ”

This long-term project obviously falls into the scene of community group buying more matched. LuJiu Finance learned that at present, many Internet companies such as Taobao, Pinduoduo, and Kuaishou are deeply cultivating the industrial chain of agricultural products. How to bring many "categorical, unbranded" agricultural products up to other regions? Community group buying, which has a price advantage and is rooted in the trust of neighborhood leaders and platforms, may not have room to show its fists.

In this context, the only thing that needs to be desperately trying is to prosper. For the giants, even if the community group buying fails, it doesn't matter; but for a startup like Xingsheng Preferred, the community group buying is all. Although Xingsheng Preferred is reluctant to admit the problems existing in the community group buying business model, it still cannot solve the reality of the industry's time withering.