---
title: "A Cool-Headed Look at Community Group Buying"
description: "Community group buying has become extremely hot, even reaching the peak of public discussion. The hotter it gets, the more important it is to think calmly about the logic behind it. Social retail is the third retail scenario of the future, and it will intercept traffic from both physical stores and e-commerce platforms."
author: "赵波"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2020-12-11"
language: "en"
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---

# A Cool-Headed Look at Community Group Buying

> Community group buying has become extremely hot, even reaching the peak of public discussion. The hotter it gets, the more important it is to think calmly about the logic behind it. Social retail is the third retail scenario of the future, and it will intercept traffic from both physical stores and e-commerce platforms.

Community group buying has obviously become extremely hot, even reaching the peak of public discussion. The hotter it gets, the more important it is to think calmly about the logic behind it.

**-01- Social retail is the third retail scenario of the future**

The first is offline physical stores, based on LBS, physical retail; the second is online e-commerce platforms, based on the internet, unlimited shelves, aggregated traffic; the third is social relationship retail, based on network nodes, decentralized, with traffic intercepted upfront.

Internet giants are not in a safe zone. Social retail will intercept the first two retail models, being closest to consumers, and will consume all the traffic of the first two retail models. This is the reason for the anxiety of all internet giants.

Facing such structural changes, even Jack Ma has to do business humbly within Tencent's ecosystem. There is no choice, because when the times abandon you, they don't even say goodbye.

**-02- The benefits are too huge**

China's population base is too large, making it a super-large-scale market. Any small business done with the internet will be amplified countless times through the network, becoming an extremely huge business.

Fresh food, group buying, high frequency, rigid demand. These four keywords can give practitioners unlimited imagination, naturally a business of trillions of scale. Moreover, it is a sustainable and stable business. I think there is no better business than selling vegetables. For internet bigwigs, once they see it clearly, not entering would be foolish.

**-03- The ones who suffer are channel distributors**

Small vendors and wholesalers without first-hand supply sources will find it difficult when platforms subsidize. Supermarkets and physical stores will see reduced business. Although there will be profit subsidies online, it will eventually reach a balance point.

What we can do is actively respond to structural changes, transform upward or downward, otherwise we will be marginalized. The pace of change is getting faster and faster. In the past, career changes occurred between generations; now they occur within a generation. We must possess metacognitive abilities and the capacity to migrate across fields and industries. Otherwise, the only jobs left for us will be delivering packages and food.

**-04- Social retail offers many opportunities**

Retail scenarios have evolved from stores to platforms under star-shaped internet logic, and then to nodes under mesh internet structure. Essentially, it is a process of gradual decentralization. At the same time, this means there are many retail opportunities within it.

The value of individuals is amplified, returning to tribes, and values inevitably diverge. The logic of retail has shifted from being traffic-based to relationship-based. Within relationships, the value of nodes will be affirmed and amplified. KOLs and KOCs in professional fields will become the protagonists in the retail sector. Lululemon is a benchmark case of this model.

**-05- The essence of social is private domain, and the essence of private domain is retail**

As a brand or B2B practitioner, you must see clearly that the essence of social is private domain, and the essence of private domain is retail. You should provide one-stop supply chain support for all social retail entrepreneurs, empowering them rather than employing them.

**-06- The bugs of the giants**

The giants' bug is applying the logic of the second platform retail model to the third social relationship retail model—this is a structural error!

Looking at this business from the logic of the WeChat ecosystem:

1) Community group buying is a business that emerges in a social environment, and its essence is naturally decentralized;
2) The role of the "group leader" is underestimated, thinking they can be discarded after a while and replaced with an independent app—this logic does not hold;
3) In terms of transaction relationships, community group buying is actually a nanny-style wholesale business: they provide relationships, you provide resources;
4) In a social environment, it is highly dispersed, with low entry barriers, and cannot survive outside the social environment; it is impossible for super giants to emerge;
5) The underlying problem is a fallacy in thinking: trying to apply platform logic to retail in a social environment does not work.

**-07- The golden age of individual entrepreneurship**

Social retail is destined to be a dispersed business. Based on social network nodes, the monetization of personal charisma and individual value will be truly amplified. All giants will only be supporting roles in the future, serving as supply chain support and the backdrop of the era. Under social relationships, whoever can make others produce more endorphins and oxytocin will surely become the protagonist of the era.

**-08- Coldly watching the giants, how far can they go?**

The giants are only forced to participate. Meituan's entry is understandable; group buying is its home turf, and indeed everything can be grouped: movie tickets, hotels, flowers, food delivery, etc. So Meituan must fight.

Alibaba and JD.com are also in the same boat. Traffic is intercepted upfront; platforms cannot create traffic themselves and need external diversion. When someone intercepts traffic in advance, they must fight.

Pinduoduo has agricultural supply chain genes and also started from social relationship chains, so it is understandable.

What is incomprehensible is why Didi and ByteDance are doing this. If it is for the trillion-scale market and valuation, without considering their own genes, it is really nonsense. The essence of entrepreneurship is the monetization of core capabilities. If you don't have it in your genes and start from scratch, why should you necessarily succeed? Have you forgotten the lesson of "Teng Bai Wan"?

| Founder of New Distribution, expert in FMCG industry channels, author of over 400,000 words of FMCG industry research articles. For communication, you can add WeChat by long-pressing. When adding, please indicate your company, position, and name.

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