Fu Xiaoling, Cao Binling
Group leader Ma Li feels like she's about to lose her job. In her group of over 200 people, only a few orders trickle in each week, and business is dismal. But a few months ago, the picture was completely different: "2023 social group buying is bound to be a lucrative trend," "zero investment, zero inventory," "newbies can earn over 10,000 yuan a month"... At some point, group leaders reinventing themselves became all the rage. Ma Li's heart was stirred. She searched keywords on Xiaohongshu and found over 30,000 posts. After reading through various tutorials, she found many similarities with past community group buying. Plus, with everyone tightening their belts these days, she entered the game with confidence.
But the result was "easy to understand, hard to execute," and she was baffled. In fact, this sense of powerlessness isn't unique to Ma Li; every community group buying leader has similar feedback. In a sense, the group buying track seems cursed with "players everywhere, glory but fleeting." Two years ago, platforms like Xingsheng Youxuan, Chengxin Youxuan, Meituan Youxuan, and Duoduo Maicai were locked in a hundred-platform war over fresh produce. Now, the market is buzzing with small group stores like Xiaoxu Daojia, and "social group buying" models like Kuaituantuan and Dongdongtuan. For the 2 million group leaders swept up in this (industry consensus data), it's a rapid rise and fall of old and new. Doing community group buying means only earning hard-earned money, or even losing money; switching to social group buying isn't just about selling—it requires mastering a dozen skills. As the tide washes out, group leaders can only grope forward. Some successfully transition and land safely, some easily earn their first pot of gold, while others are exhausted and stressed.
Unwilling to be "nature's porter," group leaders revolt against platforms
Watching the truck drive out of the community gate, then looking at the pile of group-bought oil and rice stacked like a small mountain in front of her door, Li Lan felt no joy. As the only community group buying leader in the community, she had once joined three platforms simultaneously—Meituan Youxuan, Duoduo Maicai, and Taocaicai—and her sales ranked in Wuhan's top 10. But now, the more she sells, the worse she feels. The leader incentives that made up the bulk of her income are almost gone: previously, any shipment from her station earned incentives; now, she only gets rewards if users click her personal shared links to buy, which is harder, and even if 10 people respond, she might only get a few yuan. As a result, for all those oil and rice—several pounds each—she unloads for over half an hour, exhausted, only to earn 2 mao per item in commission.
With selling more becoming less worthwhile, Li Lan chose to close the other two platforms and keep only Taocaicai. Of course, that's still just hard-earned money—selling 88 orders a day, with sales of 413 yuan and estimated income of 32 yuan, but that already outperforms 78% of group leaders in Wuhan.
Unwilling to be "nature's porter" any longer, Li Lan joined the ranks of self-organized group buying. Her contacts list has over a dozen wholesale groups. Every day, the first thing she does upon waking is open her phone and pick out the day's products from the dizzying stream of messages. Li Lan explains that these sources usually come from large wholesalers in local farmers' markets; some goods don't even go through the market but are directly transported from the origin to various group buying points, then reach residents' tables through her.
In the six months since she started, she's gone from local fresh produce like lotus root and chrysanthemum greens to specialties like durian and Xinjiang milk. Currently, she opens several groups a day, and self-organized group buying has gradually become her main income source. "Now I earn about 2 yuan per order, which is much easier than before," she says.
However, Li Lan's model isn't reliable in Wanzi's eyes. Wanzi is an employee of the chain group store "Xiaoxu Daojia" in Hangzhou. After their self-operated group store opened, many surrounding group leaders and fruit stores were hit hard. In Wanzi's view, small leaders like Li Lan are unorthodox; they lack business licenses and rely on neighborly trust to sell. Once they encounter experienced, capitalized regulars, they basically have no power to fight back.
"We don't even intend to make money on this; how can they compete?" What Wanzi calls "not making money" refers to the traffic-driving products in group buying. She explains that fruit stores usually use watermelon or cantaloupe to attract customers, fresh food stores use tomatoes, potatoes, cucumbers, etc., while their self-operated group store uses "one yuan for a serving of cucumber" to violently pull in new customers and "intercept traffic."
"Whatever they sell, we target it," Wanzi says. As long as they offer low enough prices and leave an impression in residents' minds that "group stores are more cost-effective," their trust in small leaders will crumble. Under the lure of low prices, Wanzi's team can pull in up to 300-400 people a day. With continuous "violent new customer acquisition," each group store's private domain traffic can maintain nearly 10,000 people.
But group buying platforms that only play the money-burning game are unsustainable. Wanzi, who joined the group buying track in 2018, has worked at two community group buying companies: one was the e-commerce platform Daidailuo, and the other was a pure offline fresh produce brand. Both went bankrupt. The chain group stores she currently works for, which focus on "physical stores + private domain traffic," can be seen as an upgraded version of traditional community group buying. They significantly cut costs and franchise fees, and in product selection, they don't seek quantity but focus more on product structure. They even have dedicated copywriters to "prompt orders" and staff who regularly visit stores to help franchisees optimize operations, solving the old problems of user retention and leader management in community group buying.
In a sense, these group stores actually play the role of platforms in community group buying. But since they're in their infancy, they can offer group leaders more profit margin. For example, for apple bananas, the direct-from-origin price from Hainan is 16 yuan per box; Wanzi's team gives franchise stores a price of 17 yuan per box, so franchisees can retail at 23 yuan per box, still cheaper than physical stores on the market.
Even so, chain group stores have their own troubles—although franchisees make money, according to Wanzi, her region is only breaking even, not yet profitable. Recently, Wanzi's team started launching high-ticket items like daily chemicals, clothing, and housekeeping services. She sighs, "Ultimately, we still need to make money; otherwise, it's a dead end like community group buying."
Value for money prevails: social group leaders earn over 10,000 yuan a day
Zhang You returned to his hometown right after graduation to help with the family fruit business. In the three months since becoming a supply group leader, over 4,000 group leaders have contacted him through various channels. "(Group leaders) earning hundreds to thousands a day is common, and some earn over 10,000 a day." In Zhang You's view, social group buying is almost synonymous with getting rich quick.
Among these group leaders are employees of group stores like Wanzi who seek out source origins, but more are large and small leaders who use "drop shipping" services. They gather orders from all over the country through private domain group buying platforms like Qunjielong and Kuaituantuan, and then Zhang You ships from the source.
Zhang You believes this online group buying method is essentially no different from e-commerce, but compared to e-commerce, people are more willing to do group buying business. "Platforms like Pinduoduo have expensive traffic, and everyone competes on price, so there's little profit. But the traffic in group leaders' hands is free, and group buying platforms charge low commissions, or even none. Isn't that great?" Zhang You explains.
With no middlemen taking a cut, group leaders have more leverage over users. Zhang You uses premium pomelos weighing 1.5-2.8 jin as an example: in the group buying model, even at 20 yuan for 5 jin with free shipping, there's still a decent profit margin. But consumers might have to pay 30 yuan for the same quality pomelo at a fruit store. With the "direct from origin + low price with free shipping" advantage, it's clear which one consumers will choose.
Zhang You also knows how to reciprocate, prioritizing good fruit for group buying channels: "If you give them (group leaders and consumers) a little sweetness, they'll give you even more." Since starting, Zhang You hasn't received a single negative review, and both customers and group leaders are increasingly loyal to him. His sales have now exceeded 6 million yuan, with peak days reaching 100,000 yuan in sales, of which group buying channels account for nearly 45%, almost half.
Uncle Liao, who also plays the value-for-money game, is doing well too. He used to supply daily chemical products to streamers and KOLs, and would share his factory visits on social accounts like Xiaohongshu for promotion. But within just two months, he received over 2,000 comments and private messages; some people volunteered to be his agents, and others begged him to start group buying. Sensing a business opportunity, Uncle Liao decided to test the waters. His approach is simple and direct: find big-brand OEM factories, get products from the same factory, and clearly mark up prices to earn "a fixed 10%-20% profit on factory cost," with limited-time group buying on WeChat. This model seems absurd but is actually very popular. "Just look at the popularity of Douyin live streaming; there are many people seeking value for money. Even high-net-worth individuals want to buy cheap and good things," Uncle Liao reveals the secret. Now, they've increased the frequency from one group per month to a fixed new product launch every Wednesday, showing signs of deepening their commitment.
Qian Yuan, an automotive engineer trying light entrepreneurship, has also set her sights on the group buying track. Before diving in, she surveyed local farmers' markets and even went undercover in five group buying groups in her community, carefully selecting local specialties as a differentiated category. "If others sell cheap, I focus on freshness; if others claim freshness, I aim for authenticity." Qian Yuan approached it with the rigor of market analysis to ensure success. However, a month later, her group buying group still had only about thirty people. In desperation, she registered as a Meituan Youxuan group leader, using the platform's endorsement to add people on WeChat through deliveries and drive traffic. Although she overcame that hurdle, the deeper she went, the more she realized things weren't simple.
Customers buy wherever it's cheapest; group leaders are forced into a narrow path
In 2022, the MAU growth rates of Kuaituantuan and Qunjielong mini-programs hit new highs. Chen Xi, who has been following group buying investments, has watched the heat rise. "Social group buying will only get more competitive, not less," Chen Xi says. According to their team's observations, compared to when it first emerged in 2020, a lot of hot money has flooded into social group buying in the past two years. For example, Tencent tested the mini-program "Exiangtuan," and Alipay launched "Tiantiantuan." And capital entry often means cutthroat competition.
Among these, Kuaituantuan has grown the fastest, with GMV of 120 billion yuan last year, expected to double this year. Seeing the opportunity, all kinds of people are squeezing into the track. "Many people who used to do clothing and beauty are now switching to social group buying." Xiao Lu is one of this wave's gold diggers. She's a finance professional by day and just registered as a part-time selling group leader on Kuaituantuan this year. She chose this because she doesn't need to select products herself; she just takes on tasks from opening group leaders and can earn extra money relatively easily. To avoid troublesome after-sales, she basically doesn't do fresh produce or fruits with high spoilage rates, focusing instead on daily necessities and mother-and-baby products like baby items and clothes. "I've now applied to over 200 supply group leaders. Every time I list a product, I compare prices from three sources, choose the cheapest and most reliable, and aim for a relatively larger markup while keeping prices low for better sales," Xiao Lu says.
As is well known, big platforms have the advantage of scale effects and cost spreading, allowing them to push prices lower. This inevitably squeezes the living space of small platforms. Similarly, the Matthew effect of big group leaders on small ones is self-evident.
To accelerate and break out, you need to expend more effort. The group store sector where Wanzi works proves this. "When I first came, there were only two or three group stores in this area; now there are six or seven, and they're all very homogeneous." Wanzi expected competition, but she didn't expect the window to be so short. Currently, the "Xiaoxu Daojia" she works for has opened over 600 stores in more than 40 cities nationwide. Similar platforms like "Guofengjia" and "Meilintao" are also pushing group stores nationwide. These group stores use the same playbook: use similar violent new customer acquisition to gather customers into a group, then sell products.
Once, while chatting with a regular customer picking up groceries, the customer mentioned she had joined six group buying groups nearby and compared prices daily, buying from whichever group had the cheapest items. She was well-versed in the art of fishing. "My sense of crisis immediately spiked," Wanzi says. Then came the increasingly competitive daily grind. A team of only four people worked with the intensity of forty. Each of them registered over a dozen WeChat alt accounts. After posting group buying links, they'd send videos in the group, act as shills, and share usage experiences. For a bruise ointment, the copy would say their family used it, and then they'd break down the daily healing changes in detail; for food items, they'd include a complete tasting process.
They're extremely diligent in promotion. "In this business, just driving offline traffic isn't enough. You need to establish a persona and constantly interact with users to maintain stickiness; otherwise, they'll go elsewhere." Directly filming the source origin is a common promotional tactic for Wanzi's team. To do this, she often travels to selection bases to understand the supply. "Many people just use videos from the source; we need to create features and differentiation, so we have to be different."
Of course, they haven't given up on maintaining offline stickiness. They record regular customers' preferences and make recommendations, essentially an "artificial algorithm" mechanism. For example, if an auntie consumes a lot of cucumbers, they note that and, when they don't have that product, they'll specifically greet her, resulting in a very high repurchase rate. "There's no way around it; to make money, you must earn trust and have a clear personal IP, otherwise customers will leave," Wanzi says helplessly.
However, even the "involution king" Wanzi, with all her skills, is increasingly struggling. Besides putting great effort into product selection, pricing now requires extreme caution. If it's higher than others, even by a few mao, sales immediately suffer, given the abundance of choices. One memorable incident: she accidentally discovered a group buying group she'd infiltrated had posted a link for a niche Thai snake king bone ointment, and quite a few people responded. Seeing the opportunity, she quickly found a similar source, coordinated delivery, and launched just two hours later, pricing it 1 yuan cheaper. Then someone who had bought from the competitor said, "If I'd known it was cheaper here, I'd have bought here." "With that kind of promotion, everyone knew mine was cheaper and placed orders; I sold over 200 orders that time, almost matching the competitor," Wanzi says.
But fighting price wars to maintain traffic also means thinning profit margins. As a result, for franchisees, on one hand, the entry barrier is getting higher; on the other hand, they need to be mentally prepared for potential sustained losses in the first few months.
Feeling exhausted from the competition and constrained in growth, Wanzi is thinking of quitting: "I'm planning to become a 'group store dissuader' because group stores are extremely hard to do well."
(Ma Li, Li Lan, Wanzi, Zhang You, Qian Yuan, and Xiao Lu are pseudonyms.)
Data support | Insight Data Research Institute