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-01- First Prediction: The First Year of the Group Brand Era What is a group brand? As the name implies, it is a brand for community group buying channels, similar to the concept of 'Taobao brands'. Back then, Taobao brands relied on the Taobao Mall, developing alongside it, interdependent and mutually promoting, achieving common development and prosperity. Group brands will be the same, developing with community group buying, advancing hand in hand, and prospering together.
2021 is called the first year of group brands because this business model, after experiencing the budding stage in 2017, development in 2018, iteration in 2019, and explosion in 2020, has been validated and has a promising future.
Whether group brands can develop depends on how long the community group buying flag can be held, how big it can become, and how many people participate. The community group buying business model has evolved from the 1.0 native model, to the 2.0 elite operation model, and now to the 3.0 internet capital model. 80% of leading domestic internet companies have already entered the field. Undoubtedly, community group buying will remain a top strategic department for a considerable period.
Internet capital enterprises' strategies are divided into the first half and the second half. Currently, the first half's three moves are nearing completion. Unless unexpected, by the end of March, community group buying will cover over 90% of city and county markets. This also indicates that community group buying will rise as an independent channel.
In the past three years, community group buying has grown wildly. The only regret is that most leading FMCG brands have not formally participated, mostly just observing. At the beginning of the year, at the Third Nanjing Community Group Buying Industry Conference, a large number of leading FMCG brands made a collective appearance, heralding the arrival of a new era.
With brand owners embracing, independent channels rising, 90% coverage of city and county markets, and the emergence of exemplary power, the era of group brands is about to officially begin!
-02- Second Prediction: New Dynamics in the Second Half of the 3.0 Stage: Alliance and Monopoly Looking at the development history of internet capital enterprises, any top strategic business has a turning point between the first and second halves. Community group buying is no exception. In the first half, the three moves are subsidies and low prices, multi-category expansion, and structural profitability; in the second half, it's alliance and monopoly. This is the norm, as seen in food delivery and ride-hailing.
Community group buying has now entered version 3.0. The first half's three moves are basically complete. July 1st is a major test. Due to internal and external factors and the complex constraints of behind-the-scenes investors, the turning point of the second half will basically appear.
-03- Third Prediction: Three Giants Dominate, Two of the Five Tigers Exit the Track – A High Probability Event The three giants are Meituan Youxuan, Xingsheng Youxuan, and Shihui Tuan, which will lead the national market and divide it into three parts. The reasons are not elaborated here. The five tigers are Duoduo Maicai, Chengxin Youxuan, Tongcheng Life, JD Pinpin, and Hema Market. Looking at their momentum, genes, and ecosystems, in 2021, at least two of the five tigers will exit the track. Let's wait and see.
-04- Fourth Prediction: Community Group Buying E-commerce, New Store Commerce, and Independent Groups – Three Camps Compete for Same-City Retail The second-generation platform e-commerce can be called omni-channel e-commerce, while the third-generation community group buying e-commerce can be called same-city retail.
After three years of wild growth, physical stores have begun to awaken. Old maps won't find new continents. The rise of physical stores requires embracing new tools of the era, absorbing genes of advanced models, and self-integration and innovation. Thus, new store commerce has emerged. Currently, the new store commerce format is similar to community group buying in 2018.
After three iterations, the community group buying model has changed. Community group buying platforms with internet capital genes are increasingly distant from group buying. Original practitioners and group leaders under the community e-commerce ecosystem increasingly need IP operation services. Independent groups, represented by group alliances, have emerged as the times require, and their living space will continue to grow.
This is a paradox: the more community e-commerce develops, the larger the independent group team will become.
-05- Fifth Prediction: Community Group Buying and Community E-commerce Completely Part Ways Community group buying is a group leader traffic-driven model, while community e-commerce is a platform traffic-driven model.
Traffic is the lifeline of internet business. No internet company will long keep its lifeline tied to others' belts. Community group buying platforms under internet giants are destined to part ways with community group buying businesses under the Penguin ecosystem (Tencent). This is fate!
The soil for group leaders is in the Penguin ecosystem. Internet gene platforms know clearly who are friends and who are enemies. Using group leaders and then breaking away from them is also a matter of time. This is also fate!
Community group buying goes left, community e-commerce goes right – it's destined!
-06- Sixth Prediction: Group Leader Differentiation, Function Splitting, and the Divergence of Social and Pickup Points The most impressive aspect of community group buying is the emergence of group leaders. They handle new customer acquisition, sales, sorting, storage, customer service, and customer relations at zero cost. This is the biggest innovation in business models. Group leaders can be said to be the largest super-individuals in the community group buying ecosystem, and they are also the love-hate collaborators for internet gene platforms.
Group leader differentiation and function splitting are byproducts of the growing distance between community group buying and community e-commerce. Community e-commerce will increasingly strengthen new customer acquisition, sales, customer service, and customer relations, while sorting, storage, and pickup points will become more mechanized. This will become more prominent in 2021.
IP group leaders and pickup point group leaders will have increasingly clear identity labels in 2021.
-07- Seventh Prediction: Grid Warehouses in Disarray, Collaborative Warehouses Rise, and Shared Warehouses Complete Their Historical Mission Shared warehouses were noisy for a while but quickly faded. The transitional shared warehouses never dreamed that the industry would change so fast. Before they could accelerate, their historical mission was already nearing its end.
Good water doesn't irrigate others' fields. Collaborative warehouses rose on the shoulders of shared warehouses. The same functions but different outcomes. Probably even collaborative warehouses didn't expect this. Warehouse and distribution are the biggest black hole in community group buying business. The strategic value of collaborative warehouses surpassing others is greater than anything.
Future trends for the new three giants' warehouse and distribution:
Large collaborative warehouses, small central warehouses. Collaborative warehouses are efficiency units; central warehouses are consumption units.
The different ownership of collaborative warehouses and shared warehouses determines different operating methods, strategic priorities, and historical missions.
The operational difficulty of collaborative warehouses lies in the 'degree' of extreme left and right! Too left leads to regression of production relations; too right reduces strategic value.
The new three giants will increase collaborative warehouse operations to offset central warehouse losses.
-08- Eighth Prediction: 80% of Regional Community Group Buying Will Transform Unless unexpected, 80% of regional community group buying will transform and expand business forms in 2021.
Transformation directions:
1. Supply chain
2. Product selection and other services
3. ToB traffic group leaders
4. New store commerce
5. Alliances
6. Grid warehouses No more elaboration; a special topic article will be published.
-09- Ninth Prediction: The Biggest Variable in the Payment War Community group buying is developing vigorously. The Penguin ecosystem has always had a God's-eye view because all players are in its pot. In the 3.0 stage, the community group buying industry has undergone drastic changes. The new three giants are destined not to eat from the Penguin pot for long. Non-Penguin ecosystems are bound to set up their own stoves and create a closed loop.
The Penguin ecosystem faces a choice. The next move will determine the biggest variable in community group buying e-commerce in 2021. Unknown!
-10- Tenth Prediction: New Players Enter China's market is vast and populous. Any track at any time never lacks new players.
Community group buying e-commerce integrates e-commerce, retail, and social networking, covering fresh produce, standard products, and services. 80% of leading internet companies have already entered. The trillion-yuan track is just around the corner. Community group buying e-commerce, tested by practice, is destined to be eyed by wolves, waiting for opportunities.
Six major forces – real estate and property management, radio and television media, financial oligarchs, logistics giants, government e-commerce, and commercial chain giants – are destined to compete in 2021.
The future has arrived, the future is promising, the future is unknown!
Author: Li Baolin
Advocate of Group Brand New Retail / Initiator of Group Brand Club
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Important Conference Announcement! March 1-2, Jiangsu Wuxi New Distribution will join hands with 500+ FMCG distributors from five provinces in East China to gather in Wuxi, Jiangsu, to provide brand owners and distributors with a meeting aimed at product selection, cooperation, and exchange.
Make arrangements before the New Year, and start working after! Don't wait until after the Spring Festival to make arrangements!
Interested brand owners or distributors are welcome to contact us. Please scan the WeChat QR code below to register for the meeting or exhibition.
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