The winner of the community group buying track has not yet appeared, and the knockout round has already begun.
Recently, some media reported that all the business of the current ShihuiTuan in the national cities has been shut down, and the company has entered the aftermath stage, mainly dealing with the liquidation of suppliers' payments and the settlement and payment of employees' wages. On March 28, a reporter from China Times asked the Shihui group for verification on the national business shutdown, but as of press time, there has been no reply. In addition, the reporter repeatedly contacted the manual customer service of the Shihui group, and the phone was not answered; during the period, the reporter tried to log in to the Shihuituan APP and the Mini Program many times, but always showed that the server was abnormal.
The former community group buying "old three groups" are only left to prosper and prefer to stick to, and the defeat of the Ten Hui Group and Tongcheng Life also shows that in the crazy subsidy capital game, the most hurt seems to be never the rich giants, and the small and medium-sized players who fell down are the victims of the industry reshuffle. And the defeat of the "Ten Hui Regiment" has any warning to players who are still struggling in the industry? In what direction will community group buying enter the knockout rounds go?
The Ten Leagues were defeated
The closure of all operations in cities across the country was rumored to be a further continuation of its massive contraction at the end of last summer.
In August last year, Chen Yin, the founder of Shihui Tuan, said in an internal letter that in the short term, Shihui Tuan would carry out drastic reforms in some less efficient business areas. At that time, the Ten Hui Tuan told the "China Times" reporter that it was not aware of the specific adjustment strategies of each city.
However, judging from the follow-up results, the reform mentioned in the above-mentioned internal letter is to shut down business and lay off employees on a large scale in more than 20 cities such as Xi'an.
Xiao Yi (pseudonym), an employee of the xi'an branch of the former Shihui Tuan, told the China Times reporter that there were more than ten employees in the processing center where she was at that time, and there were more than 100 employees in the warehouse. "Without advance notice, as soon as we went to work on August 20 last year, the headquarters directly came to clean up the warehouse materials and asked us to sign a resignation order." According to her understanding, all machining centers and warehouses in Xi'an are currently closed.
After this round of closure in August last year, the more than 2,000 cities and counties previously laid out by the Shihui Group shrank to only 5 cities left in Changsha, Wuhan, Jinan, Jiangsu and Guangdong to continue to operate. But just four months later, in December last year, business in Wuhan, Jinan and other places also shut down.
On March 29, Xiao Yun (pseudonym), a former employee of the Shihui Regiment, told the China Times reporter that he joined the Wuhan branch of the Shihui Tuan in August 2020 and was responsible for the operation. "On December 20, 2021, the company notified employees to leave, leaving only some after-sales employees, mainly dealing with arrears from suppliers and service stations. In January, wuhan only had a few sporadic products left in the mini program; on February 28, the Wuhan area was all cleared. ”
However, after the clearance, the Ten Hui Group still has arrears to pay. Xiaoyun told reporters that his salary in December last year has not yet been paid, and some employees who received salaries have a 30% discount on the basic salary, and their performance has not been paid.
In addition, the supplier's payment can only be paid at a 30% discount due to financial problems. The settlement plan provided by Xiaoyun to reporters shows that the previous plan of the Shihui Group was to pay the goods according to the 30% discount of the amount owed by the supplier, and the reporting time was until February 10. After that, merchants who have not yet settled will implement a 20% discount plan. The statement also emphasizes that "the further back the supplier, the lower the revenue of the supplier".
"Many suppliers have no choice but to sign a 30% discount plan, but some suppliers have feedback that even if they signed the plan, they have not received the payment so far." Xiao Yun said.
Expansion and participation in wars
The Shihui Group once worked with Xingsheng Preferred, Tongcheng Life and called the "Old Three Groups" of community group buying.
In April 2018, Chen Yin, who has been starting a business in the rural market for 6 years, founded the Shihui Group and entered the sinking market with the model of community group buying. In August of the year of its establishment, the Group received an angel round of financing of 100 million yuan. At that time, this track already had a number of pioneers such as you and me.
In 2019, the community group buying industry entered a period of integration, with squirrel spelling, large-scale layoffs of neighbors and neighbors, and the closure of carrots, and the departure of multiple community group buying platforms. However, in January of this year, Shihui Group first obtained investment from Alibaba, and since then, it has successively acquired community group buying platforms such as You and Me, Haojile, and Neighborhood Talk, and entered the first echelon of the industry. According to media reports, when Shihui Tuan acquired the shares of "You, Me and You", it acquired 20% of its shares with more than 70 million yuan in cash and 3.13% of the shares of Shihui Tuan.
While many mergers and acquisitions have allowed the Group to further expand, it has also tested its subsequent organizational management capabilities.
A former employee of the Beijing Shihui Regiment told the China Times that in May last year, the company parachuted in a CMO, and several old employees were marginalized. However, the former employees of the Shihui Regiment in Wuhan had not heard the news of the personnel change of the head office, which meant that the news did not circulate among companies across the country. But she said that since August last year, she has clearly felt that the company changes frequently. "Previously, the main body of our labor contract was Beijing QunxianHui, but in October, the company did not have any explanation, so it let all employees change their contracts to Hunan QunxianHui, and then the legal person of the newly signed company was changed."
According to Tianyan, in November last year, the legal person of Hunan QunxianHui was changed from Sun Yuanbo, the former chief operating officer of the Shihui Group, to Li Xiuzhen. The Wuhan employee said that "Li Xiuzhen cannot be found in the DingTalk group."
Ren Xiaodong, founder of Mosaic Cloud Sales Consulting, told the "China Times" reporter that from its own point of view, Shihui Group initially became the head player of the community group buying industry through continuous acquisition of companies. But the company itself has not yet passed; the Ten Hui Group has not made strong acquisitions of them, and each region is independent, and it has not unified technology, background, organizational structure, etc., which has led to its insufficient grasp of subsidiaries and exposed its lack of organizational management capabilities. After the acquisition, the Ten Hui Group did not come out of a model of its own.
Not only its own organizational management capabilities, the entry of giants has caused drastic changes in the external environment, which disrupted the original rhythm of the Ten Hui Group.
When acquiring "you, me and you", Chen Yin issued an internal letter saying that it was necessary to invest resources in improving the ability to perform the contract, and said that it was necessary to take a clear stand against the practice of burning money quickly and holding high.
However, in the second half of 2020, Internet giants such as Ali, Meituan, and Pinduoduo either invested or launched new businesses to personally enter the market. The giants with capital entered Changsha, the base camp of the Shihui Regiment, and used high commissions to grab the regiment leader and dump users at low prices, which made the Shihui Regiment, which was in line with the principle of "opposing rapid burning money", also have to join the subsidy war. According to media reports, Chen Yin once said, "When the Internet giants come in and use capital to smash it, we ourselves have to reduce the gross profit by 20 points." ”
This is also believed to be the main reason why the later Shihui Group faced a crisis. On March 29, some insiders told the "China Times" reporter that the common problem of several community group buying players who have left the market is that they have not calculated the accounts well, have not thought about how much money they can support, and have no bottom-line thinking. Of course, there are also blind expansions, such as several mergers and acquisitions of the Ten Hui Group. After the giants entered the market, they blindly joined the subsidy and did not stop loss and contraction in time, resulting in problems in the final capital chain.
There are no winners
Fresh e-commerce seems to have always been a bitter business. However, compared with the heavier front warehouse, community group buying can control costs more.
Although the margin of the front warehouse is slightly higher than that of the community group purchase, its performance cost is much higher than that of the latter. According to a research report released by Soochow Securities in June last year, the gross profit margin of 19% of Dingdong Buying is about 4 percentage points higher than that of community group buying, while the average performance cost of 1 yuan per community group purchase is only one-twentieth of the pre-positioned position.
According to a research report released by Everbright Securities in September last year, in July 2020, before the entry of Dachang, the performance fee of Xingsheng Preferred in Hunan was reduced to 3%, and the gross profit margin was 15% to 20%, achieving initial profitability. This has also attracted more players and giants to join.
When they first entered, the giants moved quickly - in July 2020, Meituan just established the Meituan Preferred Business Department, and in September it was announced that in the future, Meituan Preferred would enter 20 provinces within 3 months to achieve thousand-city coverage within the year; in August of the same year, Pinduoduo established Duoduo to buy vegetables, expanding nearly 300 cities after half a year; in September, the speed of Orange Heart Preferred Kaicheng doubled.
Under pressure, even players who do not choose to follow up quickly will inevitably be shocked.
On March 29, a person close to Xingsheng Preferred told the China Times reporter that Xingsheng Preferred originally achieved a balanced micro-profit in the first half of 2020, but after the giant entered in the second half of the year, the company began to lose money. "After the giants came in, although Xingsheng Preferred did not follow up with low-price dumping, it was definitely necessary to make profits in terms of price, and was forced to subsidize in a specific period, and it was certainly impossible to make a profit."
According to the reporter's understanding, the prosperous preferred choice, which started in Changsha, Hunan Province, is the only enterprise in the "old three groups" that is still sticking to it. Although there is a mature supply chain in Hunan, the battlefield outside hunan is not bright. At the end of 2020, Xingsheng Preferred announced that it would expand to at least 10 provinces in 2021. However, since September last year, Xingsheng Preferred has chosen not to open new cities for the time being.
Another member of the old third group, Tongcheng Life, announced its bankruptcy application in July last year, and after changing its name to "Honey Orange Life", it shifted its business from the C-end to the B-end. Almost at the same time, the Food Sharing Club also announced the transformation of community snack convenience stores. Dai Shanhui, the founder of The Food Sharing Club, said in an interview last July, "In the community group buying track, the giants have blocked the direction in which the Food Sharing Club can go. ”
Ren Xiaodong told the "China Times" reporter that the giant launched a subsidy war after entering, and the essence of this activity is the behavior of the market game, and the fight is the ability of funds. Startups can follow up, but form a clear strategy and go at their own pace. If the company's own basic disk is not stable enough, and financing problems occur under the coercion of the drastically changing environment, it will inevitably lead to the end.
In this protracted money-burning game, even the giants will not be able to reach the end.
In the third quarter of last year, Didi's net investment loss in Orange Heart Preferred reached 20.8 billion yuan. In March this year, Orange Heart Preferred was exposed to the closure of the entire line; recently, Jingdong's Jingxi Pinpin also began to withdraw layoffs. Meituan Preferred, which is still sticking, announced at its March earnings conference that it will be more cautious in the future in new businesses, including community group buying.
Ren Xiaodong said that the advantage of large companies is to do mature business, but community group buying is a business of emerging entrepreneurs. He said that in the future, he is more optimistic about regional brands based on word-of-mouth recommendation, good goods at the source and fast supply chain. This means that players need to have the ability to grasp the source of good goods in the future, and have the ability to control the whole link and the ability to do business.
However, he believes that if they can achieve an efficient logistics system and find an efficient community group buying model, they can still expand to the whole country. "In the future, community group buying removes the impact of disorderly capital expansion on enterprises, and each fights for a deep understanding of business, organizational capabilities and consumption scenarios."
Responsible Editor: Huang Xingli Editor-in-Chief: Han Feng
![Ten Hui Group big layoffs, community group buying changed the day?[fig]](data:image/gif;base64,R0lGODlhAQABAIAAAP///wAAACwAAAAAAQABAAACAkQBADs=)