The once-intrepid community group buying industry is shrinking further. Recently, one of the "old three groups" of the Ten Hui Group again spread the news of the national business shutdown, although some people close to the platform have denied the business shutdown, but since last year, the urban coverage of the Ten Hui Group has begun to shrink. Prior to this, Orange Heart Preferred was also rumored to have shut down the entire business line, and all the staff of the business production and research were laid off. Nandu learned that at present, Orange Heart Preferred has not been shut down in its entirety, but only a few cities are still operating.
The scene of the top ten platforms hunting community group buying was just yesterday: Didi CEO Cheng Weihao said that there was no upper limit on the investment of Orange Heart Preferred; Jingdong Liu Qiangdong personally led the team to fight; at that time, the Ten HuiTuan won the highest amount of $196 million in the past financing history. All kinds of new means such as 1 yuan spike and limited-time rush purchase on the platform frantically stir up the consumer market.
However, looking back at the past year, capital has no intention of fighting, and it is difficult to see a large-scale influx of hot money into this track, and the collapse of tongcheng life seems to have foreshadowed the direction of the industry. After the hustle and bustle, the contraction speed of the industry has caught the leader of the end of the group a little off guard, and baoma Awen, who was also the leader of the 7 community group buying platforms in the early days, currently has only four left in the camp, and the monthly income has also slipped from the original 3,000 yuan to the current store rent is difficult to cover. Supplier Chen Song's community group buying-related business has dropped from 70% of the total business volume at its peak to 30% or 40% today, replaced by the business of other fresh platforms and supermarkets. However, some people do not perceive the shrinkage of the industry, although Wang Xing, who is in an industrial village in Henan, only operates two platforms, but can obtain a monthly income of more than 6,000 yuan during peak periods such as holidays, and even in the off-season, he can earn more than 2,000 yuan per month.
The polarization between the leaders of the group, the shrinkage and transformation of suppliers, the unwillingness of Internet giants to give up, for more than two years, community group buying did not usher in the expected second half of the highlight, but hovered around the crossroads of transformation iteration.
He Xin cartographed
The head of the regiment weakened the commission of 167 items of goods less than 15 yuan
"Now the rewards are less, the commission is also less, and the head of the group is equivalent to doing nothing," Ah Wen, the head of the group who once operated 7 community group buying platforms at the same time, complained to the Nandu reporter. At the beginning of 2021, Ah Wen's neighborhood group buying group can see the promotion information of xingsheng preferred, duoduoduo, orange heart preferred, Meituan preferred, Ten Huituan, Qianxianhui, Meijia shopping and other platforms every day, at that time, she was busy and happy, specially rented a storefront as a "self-pick-up point" for community group buying, and could earn about 3300 yuan of profits a month, covering 2000 yuan of store rent can be described as more than enough. At that time, in addition to the slightly lower commission ratio of more than one grocery, the commission ratio of the rest of the platform to the head of the group could basically be maintained at about 10%-13%.
The pick-up point of the regimental commander Bao Ma Arwen
Nowadays, in order to save energy, Arwen only left the four platforms of Meituan Preferred, Duoduo buying vegetables, Xingsheng Preferred and Taocaicai to operate, but she revealed: "Now the commission ratio given by the platform is too low, and the commission obtained by the head of the group is not very good, I subtract the rent, labor and other expenses of the stalls here, and the income is basically negative." If the 167 items are mostly vegetables and fruits, the commission may be less than 15 yuan, and I still have to receive and sort the goods. Arwen said that she has recently begun to consider not doing community group buying.
Also feeling that this business is "not cost-effective" is the head of the Wu regiment from Huizhou, Guangdong Province. After shutting down the operations of Shihui Tuan and Orange Heart Preferred last year, he only retained the two platforms of Meituan Preferred and Duoduoduoduo, which had a decent order volume. Chief Wu also runs his own convenience store, and the community group buying business is more like a "side business" for him. "Didn't look closely at the background, but the proportion of commissions is falling on various platforms, like more than I did more than 100 yuan this month, the US group is slightly better, can have more than 500 yuan." The profit is not high, but also to store, sort, is very troublesome. ”
"When I was doing group buying, I thought that the major platforms had price advantages, which could bring some customer flow to the store", but in the end, this beautiful expectation was not realized, "People who buy things on the platform basically do not consume in my store, the price difference is too large, such as a mention of milk, the platform price is 10 yuan cheaper than the price I take." Commander Wu said that now he does not care much about the income of community group buying, "just let it go, a little bit of income." ”
As early as this year's New Year, Jiang Tuan, who is far away in Nanjing, stopped all community group buying business, and her income before the suspension was actually considerable among the group leaders, reaching about 2,000 yuan. But even so, the proportion of commissions dropped from the original 10% to 5% or gradually exhausted her patience, "I have my own full job, busy can not take care of, comprehensively feel that this business is not cost-effective." ”
Nandu reporter found in the return visit that as users become more familiar with the operation of the platform, the so-called "private domain traffic" has long ceased to rely on the "neighborhood group" of the leader of the group, but directly flows to the platform APP or mini program, and the function of the leader of the platform has also undergone qualitative changes, more like a "commodity storage place". Many regimental leaders have long lost their enthusiasm for promoting products in the group, and some have even lost much management of the "neighborhood group" at hand.
Dongxing Securities' recent research report on community group buying shows that with the addition of Internet giants, the expansion of the community group buying market has shifted to platform traffic drive, the traffic function of the group leader has gradually been weakened, and the main function is concentrated in the performance and delivery link, so the commission rate of the group leader has decreased significantly. In other words, when the platform begins to weaken the "drainage" function of the group leader, they can no longer assume the core role of the industrial chain in the early stage of crazy expansion.
Supplier Shuffle Large and all-supplier turn to vertical blockbusters
Compared with the feelings of the leaders, upstream suppliers who are more sensitive to the rise and fall of the industry began to adjust their supply strategies earlier, and some even quietly withdrew.
As a senior fresh food supplier in Guangdong, A Xin (pseudonym) asserted to Nandu reporters more than half a year ago that community group buying has entered the last-place knockout stage. After experiencing the collapse of Tongcheng Life and the arrears of Shihui Tuan, he reduced the scope of the supply platform to three: Meituan Preferred, Duoduo Buy Vegetables and Hema Market (now the Ali community e-commerce brand has been upgraded to "Taocai Cai"). Most of his good friends in the industry have stopped cooperating with platforms such as ShihuiTuan, "Their business scale in Guangdong, Zhejiang and Jiangxi is shrinking." ”
Chen Song, general manager of Guangzhou Mingxing Agricultural Co., Ltd., which focuses on vegetable supply, told Nandu reporters that the supply business of the company's community group purchase related platform has dropped from about 70% of the peak to 30% or 40% today, and the turning point of the industry is the bankruptcy of Tongcheng Life 8 months ago. "In the month since, a lot of platform businesses have begun to shrink."
Chen Song said that at present, they mainly provide more food, Meituan preferred and Taocai dishes. Judging from the average monthly single volume in recent months, Meituan Preferred and Duoduo are currently on par with each other, and can achieve 170,000-200,000 singles, while Taocai vegetables are maintained at 100,000-150,000 singles, "Taocai itself May only have a capacity of 50%-60% of the first two warehouses." ”
"Community group buying is rapidly ripened by capital, and it quickly enters the market through the ultimate low price and quickly rises to occupy the market." At the same time, many suppliers rushed into this track with the idea of 'exchanging price for small profits and high sales' in the early days, trying to rely on the platform to quickly grow in the short term. However, the price chaos of upstream suppliers has triggered category rolls, quality control is out of control, and the return cost of reverse logistics is as high as 20%, even far exceeding the gross profit risk of 15% of the single product, and finally many have overturned. A supply chain expert in Guangdong told nandu reporters that now, with the reshuffle of the community group buying industry, it is bound to be transmitted to the upstream supply chain link.
According to Ah Xin, he has no longer directly supplied to any community group buying platform, but has turned to a simple supply chain and become a "supplier of community group buying suppliers" to reduce the risk of the capital chain. "Before, I directly supplied the platform, because of the large amount and the amount of funds, now it is equivalent to using the money of the next level of suppliers to do it."
At present, the supply of Meituan Preferred and Duoduo is still the largest, A Xin said that many friends around began to do only one type of single product to help the platform to hit the explosion, rather than the early "big and complete" supply ideas. "Like I have friends to do the supply of package points, the US group can do 2 million flowing water a month, and Pinduoduo also has hundreds of thousands of flowing water", can do a single product can actually make money. ”
According to Ah Xin, "Now the platform with a relatively stable payment period is meituan preferred, more buy vegetables and prosperous preferred three, the account period can be about three or four days, Taocai vegetables are also catching up in a low-key manner, but the current volume is certainly not comparable to the MEITUAN." ”
It is reported that there have been media reports that Meituan Preferred will complete GMV of about 120 billion yuan in 2021, buy more vegetables at about 80 billion yuan of GMV, and Taocai vegetables will complete about 20 billion yuan of GMV at the end of the year.
Build supply chain platforms to become consumer infrastructure
In the future, the competition of the group buying business of major platforms is also a confrontation of the supply chain. To this end, reconfiguring the link has become a key action in the current transformation of many platforms.
In order to reduce the cost of circulation links, the platform began to reduce the subsidies of intermediate suppliers, and even reversely cleaned up the second- and third-level suppliers, directly contacting the source of goods in the production area, with the intention of directly "growing" the supply chain, and even driving the improvement of consumption infrastructure in rural areas.
Chen Song revealed: "In the past, as long as you have products, the platform will give you subsidies, and now it is a limited subsidy index for each region. In addition, now the platform will use the better sold single products to force the supply chain, directly contact the production area, clear the second and third level suppliers, and compress costs. He believes that there is basically no threshold for suppliers who became community group purchases in the early days, but now the platform prefers that suppliers themselves have supply chain capabilities, such as having their own production bases.
It is reported that Jingxi set up Jingxi Farm this year, mostly using the supply chain mode of direct supply from the source and direct local procurement and direct sales, opening up multiple links such as breeding, circulation and sales, and its offline Jingxi convenience store and regiment leader resources have become the most direct bearing units at the end. Even if orange heart is preferred, it is no longer willing to only play the role of intermediary "platform", but to force the B-end business, launch the "orange treasurer" APP to create a retail B2B platform, mainly for supermarkets, convenience stores, grocery stores and other formats, to help them carry out one-stop procurement and marketing, and is responsible for distribution to the store like community group buying.
Such a transformation path may be the most feasible attempt for community group buying to break through in the face of a "strong supervision" policy environment. It is understood that the executive meeting of the State Council held in September 2020 determined measures to support new formats and models to accelerate the development of new types of consumption. It is mentioned that it is necessary to promote the expansion and quality of new consumption, including strengthening the construction of the interconnected agricultural supply chain of farmers and merchants; and accelerating the construction of new consumption infrastructure, including accelerating the digital upgrading of rural commercial and trade circulation.
The executive meeting of the State Council held in April 2021 deployed to strengthen the construction of the county-level commercial system and promote the smooth flow of circulation and the double improvement of farmers' income and rural consumption. The meeting made it clear that it is necessary to accelerate the improvement of the quality of agricultural products and standardized production, support the construction of professional markets in production areas, expand the coverage of rural e-commerce, and promote the effective docking of farmers and the market. Develop refrigeration preservation, processing and other services according to local conditions. The construction of county-level commercial facilities and circulation facilities for agricultural product production areas will be included in the scope of rural revitalization input guarantees.
Zhao Ping, vice president of the Research Institute of the China Council for the Promotion of International Trade, once said that in recent years, rural consumption in the mainland has maintained a rapid growth momentum, but there are still many factors restricting the release of consumption potential. In the future, it is necessary to strengthen the empowerment role of platforms such as e-commerce, accelerate the process of standardization of agricultural products, open up the upward channel of agricultural products, optimize the supply of rural consumption, and further promote the increase of farmers' income and the release of rural consumption potential.
In this regard, Chen Song also believes that the platform power supply chain can be a good way to reduce the circulation link, achieve cost reduction and efficiency, and reduce their circulation costs for suppliers with production capacity such as them, which may lay the foundation for the large-scale profitability of community group buying in the later stage. However, he also admitted that it is still difficult to achieve profitability by only reaching the production area to transform the supply chain. "In the community group buying business, the supply chain is only one of them, and they also need to enhance the resilience of the entire model."
Looking for new users sinking the market into the last hope?
As sharp as the supply side is the capital market. Li Chengdong, founder of Dolphin Think Tank, revealed that now VCs (venture capital) no longer invest in this industry, because in their view, the industry has no growth value. "Now every (community group purchase) is painful and difficult, with losses in business, unflattering policies, and more criticism from public opinion, which is more pessimistic." Indeed, the Nandu reporter found in the review that in the past year, the community group buying industry has hardly ushered in any large-scale hot money entry, which is far from the early financing grand situation.
However, it is worth noting that during the return visit of the Nandu reporter, it was found that the heads of low-level cities or regions did not seem to be as negative as the above-mentioned leaders.
Wang Xing, who is located in an industrial village in a county town in Henan Province, after experiencing a round of reshuffling and elimination on the community group buying platform, is currently focusing on the operation of Meituan Preferred and More Grocery Shopping. She revealed that during the peak period of holidays, the order volume can exceed 600 orders, and the monthly income exceeds 6,000 yuan. In the off-season, it can also be maintained at the level of more than 50 orders and a monthly income of more than 2,000 yuan. Li Chengdong said that 60%-70% of the orders of community group buying now come from the township market, after all, the core users of this range are sensitive enough to price, "community group buying itself is a sinking demand, there are many users in urban areas, and low prices may not be their just needs." ”
Wang Qinglin, a senior analyst at Ai Media Consulting, believes that the model of community group buying has indeed reached a bottleneck stage, but it does not mean that it is not sustainable. The platform began to shift from a high-tier city to a sinking market, and the essence is still seeking new user dividends. If enterprises can adapt to the new user characteristics of the sinking market, find new profit points, and even let capital see new hopes, they can achieve real breakthroughs. Otherwise, it is easy to fall into the glue that has been experienced in first- and second-tier cities again after the user dividend is exhausted.
Indeed, the market space that can still grow in low-tier cities at this stage is also one of the key reasons why giants are still willing to burn money. Wang Qinglin analyzed that although under the empowerment of new technologies, the country's e-commerce consumption has generally improved, but due to the impact of infrastructure such as distribution, the shopping mode of the sinking market is still relatively single, and the group leader and distribution resources are not sufficient.
In addition, the food and daily necessities that are just needed by the community group purchase are the majority of consumer expenditure in many rural areas, but their retail formats and commodity categories are not as rich as in urban areas, which are the "vacancies" that the giants with strong funds can fill in reverse. As mentioned in the industry report "Community Group Buying: Retail Efficiency Revolution in the Sinking Market" released by Kaiyuan Securities, community group buying is expected to become a retail infrastructure for the development of the sinking market, reconstructing the product distribution link.
However, before the platform has built the infrastructure of the sinking market and run through, investing in the "supply chain" is not an easy task. Meituan's latest fourth-quarter financial report shows that although the operating loss ratio of new businesses, including community group buying, has narrowed, the operating loss is still more than 10 billion. Didi's third quarter 2021 financial report shows that due to the fair value change of investment in Didi's community group buying platform "Orange Heart Preferred", Didi confirmed a net investment loss of 20.8 billion yuan in the third quarter of 2021.
When capital has fled the community group buying track, whether the giants who continue to invest in the face of loss pressure can also become questions.
【Business Observation】
Insufficient hematopoietic capacity in the blood loss link The business model needs to be iterated urgently
The contraction of community group buying is not overnight, Chen Song, general manager of Guangzhou Mingxing Agricultural Co., Ltd., which focuses on vegetable supply, recalled that after Tongcheng Life announced the closure, they found that the beginning of the Ten Hui Group began to extend the accounting period, and the C-end business of Orange Heart Preferred was almost stopped last year. He said that until now, the company has not returned the company's deposit of more than 10,000 yuan, and many suppliers' deposits have basically not been returned.
In Chen Song's view, the current situation of the Shihui group actually exposes the business model problem of the community group buying industry: there are too many "blood loss" links in the entire industrial chain, but the "hematopoietic" ability is almost non-existent. "You can only rely on the front-end price increase to make a profit, but the back-end warehousing, logistics distribution, subsidies, head commission and other operating expenses are spending money in almost every link, which is equivalent to being in an imbalance where expenses are greater than income."
"Ali and Meituan have local life and other businesses themselves, and they may need community group purchases to pull traffic, and then use these private domain traffic to expand other businesses." But chips like the Ten HuiTuan are basically bet on the community group buying business, and it is easy for the big platform to steal their traffic as soon as it comes in. Chen Song said that after all, most of the private domain traffic was in the hands of the regiment leader before, and the regiment leader was the only interest, which platform could make money to go to which.
Crazy burning money to "enclosure", subsidy leaders and users are indeed one of the early giants to occupy the market, which has also led to the relevant regulatory authorities in the later stage of the introduction of a number of policies requiring the platform not to dump at low prices, disrupting the market order. However, A Xin revealed that although direct subsidies, seconds and other operations seem to have stopped a lot, the platform has only replaced these subsidies with the form of "buy gifts" and continues to attract traffic at low prices. In this way, from the surface pricing point of view, it is indeed not lower than the cost price. Based on such a competitive logic, the quality of the community group purchase product is difficult to guarantee. From the perspective of suppliers, the business model of community group buying needs to be iterated at present.
Producer: New Retail Lab of Nandu Business Data News Department
Written by: Nandu reporter Xu Bingqian
Coordinator: Zhen Qin Tian Aili
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