-01- Community group buying remains half-baked Following this, multiple financial media outlets began market research and reporting on the current state of community group buying, lifting the lid on the awkward reality after the grand "capital movement." All current evidence indicates that the community group buying model is still half-baked and not yet finalized; how it will evolve remains under exploration. Here is a brief overview of the current state of community group buying: 1. Head platforms Including leading platforms like Duoduo Maicai, Meituan Youxuan, and Xingsheng Youxuan, all platforms saw widespread significant order declines after the Spring Festival. Under strict policy oversight, the giants' favored "subsidy strategies" and "scorched-earth tactics" can no longer be executed openly; they can only operate covertly in regional actions. But once reported or discovered by regulators, they still face severe punishment. With large-scale battles off the table, latecomers Jingxi Pinpin and Alibaba MMC are cautiously building single-city models first. 2. Regional platforms In fact, after the massive influx of capital, regional platforms began exploring self-rescue paths. A large number of regional platforms that failed to transform in time or lacked capability have died, while those that abandoned illusions early and actively transformed and explored have begun to find their space. Some, backed by major brands, focus on the brand's target consumers with moderate category diversification; others pivot to high-end and branded products, abandoning the pursuit of scale and comprehensiveness, focusing on premium and non-standard items, relying on group leaders for market reach. 3. Group leaders The honeymoon period between platforms and group leaders ended faster than anyone expected; within just six months, mutual disdain had set in. After plundering private domain traffic, group leader commissions have steadily declined from a previous high of 15% to 8%, or even 5%. The reported 2 million group leaders last year are now exiting community group buying in large numbers. Some group leaders who persist, having abandoned regional platforms last year for giant subsidies, are now returning to regional platforms. Suppliers and service providers relying on the community group buying ecosystem are also struggling to sustain themselves without complementary businesses. Why has a model proven profitable as early as 2017 become a "half-baked meal" after capital poured in hundreds of billions? -02- The "half-baked meal" burned by traffic thinking There are many reasons for the "half-baked meal," but the fundamental one is the so-called traffic thinking. I have written elsewhere that if we compare industry and the internet to two worlds, industry thinking resembles agrarian peoples, while internet thinking resembles nomadic peoples. Agrarian peoples are attached to their land, cultivating meticulously to build their homes; nomads habitually move with their herds to where water and grass are abundant, wherever that may be. With no fixed home, they naturally do not cultivate or build. Historically, agrarian peoples were generally not warlike; they could sustain themselves without war. Nomads, however, were warlike and skilled in combat, because if they did not raid southward when winter came, half the tribe might freeze or starve. So, if possible, they would turn the whole world into their pasture. Translated to the real business world, internet companies that survive on traffic exhibit clear nomadic traits. Traffic is the "water and grass" for internet platforms; they remain perpetually hungry for it. Thus, in the business world, we see internet platform companies perpetually in aggressive mode, resulting in monopolies. The state's 2020 call to "beware of disorderly expansion of capital" was spot on. In recent years, online traffic dividends have bottomed out; acquiring each user requires significant costs in competition with rivals. So, when they suddenly discovered community group buying as a massive traffic pool, they naturally charged in without hesitation. New Distribution noted last year that the honeymoon between platforms and group leaders would not last long; once internet platforms plundered group leaders' private domain traffic, the honeymoon would end. Facts have proven that internet giants underestimated offline barriers and misjudged the state's determination to correct course. The community group buying model is still evolving and iterating. Currently, among head platforms, Meituan Youxuan and Duoduo Maicai have established significant advantages in market layout, while other players, though financially strong, lag considerably in city expansion and daily order volume. If the period before today was the first half of community group buying, then in that half, the giants have largely achieved their goal of eliminating regional platforms from the main battlefield. Most surviving regional platforms have avoided the most intense price band of 10 yuan per order through transformation. In the second half of community group buying, the main battlefield will see giants vying to see who can grow industrial operation capabilities from traffic thinking faster. In regional markets, regional platforms will focus on developing models suited to their own characteristics, which will remain inseparable from "group leaders." Players in the track are diverging in development directions, but the community group buying war is far from over. National and regional platforms seem to have reached a crossroads, one turning left, the other right, with little further intersection from today onward. From this perspective, this "half-baked meal" still has a chance to be cooked thoroughly. -03- National platforms turn left, focusing on internal strength Previously, the market's microphone was largely held by internet people. Any business model, if cloaked in internet garb, seemed bathed in holy light, leading many to bow in reverence. The internet's mystical aura is fading; traditional industry players have mastered internet technology, and policy management, previously lagging due to rapid development, is catching up. Internet capital has been caged, no longer able to "do as it pleases." Therefore, in the second half of community group buying, national platforms must learn to think and operate this online-offline integrated business from an industry perspective, not merely a traffic perspective. After all, those still in the main battlefield are formidable opponents. Community group buying has a heavy offline component; cities must be conquered one by one and defended one by one. But the giants' favored subsidy wars are no longer possible. What to do without big battles? Only internal refinement. First, after the city expansion wars ended, some platforms' BD teams have again entered the cycle, facing downsizing and layoffs. The layoffs proceed quietly; BDs calmly accept compensation and disappear into the crowd without a trace of reluctance. Second, national platforms have begun cutting group leader commissions across the board. After plundering group leaders' private domain traffic, 5% for self-pickup point service is deemed sufficient. Group leaders are indifferent; those uninterested quit, while those still interested return to regional platforms offering higher commissions. Third, focus on building quality supply chains and improving product quality. In the rush to expand, community group buying product experiences were quite poor. It's not hard to understand: your fruits are sourced from local wholesale markets, where better-looking produce naturally sells at higher prices in offline stores. You get what you pay for; it's clear what community group buying can obtain. But with big battles on hold, national platforms can take this opportunity to refine their supply chain systems, going to origins to secure better products at better prices. Fourth, continuously test new warehousing and distribution models until achieving comprehensive cost leadership. The community group buying model of collective ordering, collective purchasing, and collective distribution is theoretically sound. However, the current model of central warehouse + grid warehouse + self-pickup point not only fails to reduce logistics links but adds two links and two operations. For fresh produce, the original chain was wholesale market to store, one logistics leg; for FMCG, the longest chain is distributor to sub-distributor to store, two legs, with minimal sorting or repackaging. But under the current grid warehouse model, the chain becomes: wholesale market (distributor) to central warehouse, then to grid warehouse, then to self-pickup point. Not a single link is saved; instead, two sorting and repackaging operations are added. Under such conditions, no matter how you operate, it's nearly impossible to make a profit. National platforms' warehousing and distribution models must be reformed. Some propose a "multi-central warehouse + route distribution" model; others suggest "multi-grid warehouse + short-distance distribution." Whether central or grid, one must be eliminated. If not, achieving overall cost and efficiency leadership is impossible. -04- Regional platforms turn right, doing small and beautiful "group wholesale" business National platforms' development strategy will inevitably be de-group-leader-oriented. Once users develop the habit of ordering on the platform, the platform no longer needs group leaders for promotion, only for self-pickup point service. The commission platforms are willing to pay for this is only 5% or even lower. Therefore, the eventual model for national platforms is "platform + community self-pickup point," with no role for group leaders at all. Without group leaders, perhaps community group buying should be renamed? Anyway, giants now prefer not to be called community group buying; reportedly, Meituan internally refers to it as "community e-commerce." Group leaders abandoned by national platforms are now warmly invited by regional platforms, which show no resentment over last year's betrayals. Some even propose that group leaders worldwide should unite. Thus, industry insiders have proposed new concepts like the "group wholesale" model and "group alliance." The concepts may not be precise, but until better definitions emerge, "group wholesale" and "group alliance" are acceptable. After all, concepts are born and die so quickly these days that there's no need to be overly concerned. In short, "group wholesale" roughly means relying on group leaders for wholesale; "group alliance" roughly means group leaders uniting to choose their own supply chains and control their destiny. Whether group wholesale or group alliance, regional platforms provide products and warehousing/distribution services, while group leaders are responsible for selling and earning the price difference. This logic is sound; people have been doing this business all along. But it means platforms fully abandon traffic acquisition and control, empowering group leaders as supply chain service providers. At the same time, this means the platform's product selection essentially excludes the vast majority of FMCG products. Most FMCG products, due to low unit value, clear brand consumption, transparent pricing, and standard nature, are largely abandoned by regional platforms. Common vegetables and fruits are also mostly given up. High-margin premium fruits, seafood, DTC cosmetics, health products, home goods, and low-brand-concentration snacks and specialty foods are about the only categories viable. In this model, group leaders must deeply experience products and strongly recommend them to private domain users to close sales. This requires group leaders to have strong trust accumulation, user operation capabilities, and content production skills, such as shooting videos or writing product experience diaries. Given their history of being used and discarded, savvy group leaders will surely choose to transact within WeChat or use group relay methods, placing virtual orders on the platform. This completely shields users from the platform, preventing them from ever using it. Under group wholesale and group alliance models, business can certainly be done and money made, but the space is inevitably limited. Not entering the main track means being only a supplementary market channel. When regional platforms become disconnected from FMCG, they can only do a small and beautiful business, with a scale ceiling roughly that of a larger distributor. Yet the dreams and passion of community group buying entrepreneurs persist; some even propose creating "group brands," which currently seems like a pipe dream, too early to say. Once the tip is adopted, a payment of 400-2000 yuan will be made.