Giants shrink, suppliers are divided, and community group buying encounters "cold winter"

Financial Associated Press | New Consumption Daily (reporter Li Danyu) news, at the beginning of 2022, there will be three community group purchases one after another.

After orange heart preferred gradually withdrew from the market, Jingdong's Jingxi Pinpin began to shrink its business or even completely withdraw, and the recent Ten Hui Group was also exposed to withdraw from the Hunan market and lose its last position.

A few days ago, Tao Ying, a Supplier of Jingxi Spelling In Guangdong, told the New Consumption Daily reporter that its procurement notice would withdraw from the market and the cooperation was suspended, and then the procurement was also laid off. This statement has also been confirmed by suppliers in Sichuan, Hebei, Jiangsu, Hainan and other places, and all of them have been temporarily notified and the business has been cut.

Unlike suppliers who have expressed surprises, the heads of local leaders seem to have anticipated this situation.

At the same time, Zhang Limin, who is also the head of the group who is also serving as Taocai, Duoduo, Meituan Preferred, and Jingxi Spelling, told the New Consumption Daily reporter that the daily single amount of Jingxi Spelling is the least, sometimes even none, and the subsidy is not as strong as several others, and this result is also expected.

On the other hand, the Shihuituan, which has long withdrawn from the markets of other provinces and cities, has also failed to keep the Hunan market, and like Jingxi, the "Shihuituan" Mini Program can no longer be used normally, and the Hunan business is facing closure.

Whether it is the Jingxi Fight built by JD.com or the Shihui Group backed by Ali, it was once an important layout of the e-commerce giant in the community group purchase track, but with the contraction of the entire industry, it also had to cut off the loss of business self-protection. The large-scale subsidies for Meituan's preferred and more grocery purchases have also been suspended.

The community group buying industry, which seems to be only left with the oligarchy, is also difficult for the remaining giants to ride the tiger.

Quality or Quantity Under the dilemma, Jingxi spelled out

At the beginning of the establishment of Jingxi, it mainly aimed at the sinking market, realized the low-cost drainage of the main station, and formed a differentiated complement with the Jingdong main station. Because JD.com's own user base is not in the sinking market.

Therefore, it is difficult for Jingxi Pinpin to obtain a traffic advantage in the competition, and it is difficult to have the advantage of fresh and direct procurement.

Taking Duoduoduo as an example, the e-commerce ecology of Pinduoduo's main station helps to reduce prices through a package of cooperation with the main station when purchasing; the long-term stable cooperation with dealers makes Pinduoduo can get many low-priced goods from alternative channels.

Hainan supplier Ding Zhiqiang also told reporters that Duoduo buys vegetables with a number of bases for direct procurement of origins, which greatly reduces the intermediate cost, and fresh products almost do not need to rely on suppliers, so the price advantage is obvious, but the quality control is difficult to grasp, so the overall quality is not as good as Jingxi Spelling.

In the interview, a number of suppliers and leaders told reporters that the procurement docking with Jingxi is very pleasant, and the quality of goods on the Jingxi platform is also the best among several platforms, but community group buying consumers are generally sensitive to price, and Jingxi's preferential treatment is obviously insufficient. "Taking the same dish potato as an example, Meituan's preferred and more vegetables can be controlled at about 1 yuan, but the price of Jingxi is about 2 yuan, even if the quality is better, consumers will not choose expensive."

Quality or quantity? Obviously, Kyoki had never thought it through. However, in the strategic swing, the market share of Jingxi Pinnacle has not been able to make a substantial breakthrough. In the second half of 2021, the order volume of Jingxi Pinpin did not enter the top six community group buying (Meituan, Pinduoduo, Didi, Xingsheng, Shihuituan, Ali), nor did it complete the preliminary national layout.

This also directly led to the launch of Jingxi Pinpin in December 2020, and began to shrink in May 2021. At that time, Jingxi Pinpin successively withdrew from Fujian, Gansu, Guizhou, Jilin, Ningxia, Qinghai and Shanxi provinces, and reduced the amount of subsidies.

This time, Jingxi Pinpin basically withdrew from the national market, and the mini program also merged with Jingxi, and this business was "abandoned". It is understood that while Jingxi Pinpin has lifted cooperation with suppliers, JD Retail, JD Technology and other sectors have begun to lay off employees to varying degrees, and Jingxi has become a hard-hit area.

However, according to Ding Zhiqiang's speculation, the layoffs and national withdrawal are also affected by the environment, and if there is an opportunity in the future, Jingdong will not give up the traffic of the sinking market.

Suppliers carved up by "survivors"?

Due to the great reshuffle of the community group buying industry, the choices for the leaders and suppliers are becoming more and more limited, leaving only meituan preferred, more to buy vegetables, and to shop for vegetables. A number of brokerage analysts believe that the advantages of the above three platforms have been basically established, of which Meituan Preferred and Duoduo buy vegetables have the highest market share.

Interestingly, the reporter found that at the same time as the Jingxi fight and the ten groups retreated, the procurement of meituan's preferred began to actively contact some suppliers of Jingxi.

Ding Zhiqiang revealed to reporters that he established contact with the procurement of Meituan Preferred in the early stage of cooperation with Jingxi Pinpin, but in the end did not choose the latter, jingxiqing retreated, immediately signed a cooperation agreement with Meituan Preferred, and also helped suppliers in other provinces and cities to establish contact with Meituan Preferred.

But Ding Zhiqiang also said that there is not much room for choice at present, and Meituan Preferred and Duoduo buy are currently more secure community group buying brands, but these two are not short of suppliers, and the price will be relatively low.

Similarly, the taocai dishes that have come to the fore have also become the choice of many suppliers. A grain and oil supplier in Sichuan has begun to ask on multiple platforms how to settle in Taocai, but there is still no result. According to its introduction, a number of suppliers of the original Jingxi Spelling organized a WeChat group to recommend channels and platforms to each other.

A group leader in Changsha told reporters that community group buying is worse this year than in previous years, and customers' desire to buy is particularly low. First, because there is no activity on the three platforms of buying vegetables, Meituan Preferred, and Taocaicai, and at the same time, there is no price advantage, and other commodities are purchased even less. "I have a total of about 2,000 yuan of goods on the three platforms every day, but this arrival volume still can't make money."

Zhang Limin also said that meituan preferred to buy vegetables in the second quarter of 2021, and the commission rate of the head of the group has dropped to less than 5%. This also means that the battle for the leader of the regiment is no longer the primary task between the head platforms.

Community group buying went down, and the head contracted and adjusted

How much money does community group buying burn?

Taking JD.com as an example, according to the financial report, the new business sector in which Jingxi is located in the four quarters of 2021 recorded revenue of 5.15 billion yuan, 6.96 billion yuan, 5.732 billion yuan and 8.21 billion yuan respectively, but the loss margin at the same time of increasing revenue increased year-on-year, recording losses of 2.2 billion yuan, 3.02 billion yuan, 2.073 billion yuan and 3.22 billion yuan respectively.

In meituan's latest financial report, the operating loss of new businesses, including Meituan Preferred, is still expanding, from a loss of 10.9 billion yuan in 2020 to a loss of 38.4 billion yuan in 2021, and the operating loss ratio has expanded by 36.6% year-on-year.

Although Alibaba's net profit in the third fiscal quarter of 2022 was 20.429 billion yuan, it fell by 75% year-on-year, an important reason is the increase in investment in sinking market businesses such as Taote and Taocaicai.

Obviously, after the orange heart, Jingxi spelling, and the Ten Huituan group withdrew from the battlefield, the head position of the MEtuan preferred, more to buy vegetables, and tao vegetables seemed to be more and more stable, but in fact, it paid a high price, and the overall downward trend of the industry was still inevitable.

At present, the giants of community group buying have realized that the routine of community group buying purely relying on low prices to compete for the market is no longer applicable, and they have entered the adjustment period.

For now, the giants are focusing on supply chain capabilities.

The most typical is Pinduoduo, which turned a profit into a profit in 2021, an important reason is to significantly reduce marketing expenses, and increase investment in agriculture and supply chain.

Although the top management of the Ustuan group still said at the conference call that there is a broad space for community group buying, it did not mention the next step of expansion plan, which was different from the previous attitude of vigorously developing community group buying.

Industry insiders believe that the reason why Meituan Prefer and Duoduo buy vegetables tend to develop cautiously is that after large-scale subsidies, they have not been able to form a monopoly position in any local market. Although it has grabbed a part of the share of traditional offline retail, at present, offline stores are still the absolute main force of FMCG retail.

Analysts at Orient Securities expect that the focus of the head platform this year will be to adjust the commodity structure to increase the proportion of high-margin commodities, or more directly increase the rate of commodity mark-ups and reduce subsidies. However, the increase in gross profit means that commodity prices are rising, the growth rate of order volume may be affected, and the increase in unit prices is also the key this year.

At the end of the performance, the head platform will exert force at both ends of the central warehouse & grid warehouse, the central warehouse will further optimize the efficiency, further reduce the cost of personnel and transportation, and reduce the postage of the grid warehouse, but due to the low performance costs of each company, especially the lower pressure space of the platforms such as Meituan Preferred and Duoduo buying vegetables is small.

It is foreseeable that the possibility of large-scale expansion of community group buying platforms in 2022 no longer exists, and the competition between the so-called oligarchs has also become the main "defensive city".