---
title: "After Mobility and Food Delivery, Will Internet Giants Still Dominate the Community Group Buying Track?"
description: "At a community group buying conference in Xi'an, Li Bingyuan, founder of Youle Group, joked that his goal was to boost morale and that they would meet again next year if they survived. This reflects the survival anxiety of regional platforms as the 'New Three Groups' rapidly expand nationwide with capital, raising the question of whether internet giants will ultimately conquer this track as they did with mobility and food delivery."
author: "李保林  何年"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2020-11-30"
language: "en"
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---

# After Mobility and Food Delivery, Will Internet Giants Still Dominate the Community Group Buying Track?

> At a community group buying conference in Xi'an, Li Bingyuan, founder of Youle Group, joked that his goal was to boost morale and that they would meet again next year if they survived. This reflects the survival anxiety of regional platforms as the 'New Three Groups' rapidly expand nationwide with capital, raising the question of whether internet giants will ultimately conquer this track as they did with mobility and food delivery.

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**At the previous Community Group Buying Chain Evolution Conference in Xi'an, Li Bingyuan, founder of Youle Group, opened his speech with: 'My main purpose today is not to share, but to cheer everyone up!' and closed with: 'If we're not dead next year, we'll meet again!'**
Although these two remarks were made to lighten the mood, they genuinely reflect the current survival state of all regional platforms in the industry. Mr. Li of Youle Group is a classic case of a second-generation distributor successfully transitioning to community group buying, and New Distribution previously interviewed him, so he left a deep impression.
**Now, the New Three Groups, backed by capital, are sweeping across the country like autumn wind sweeping away fallen leaves, and regional native groups are as conflicted as these jokes suggest. **Painful: should I continue or transform? Subsidies: should I invest or not? Should I exit early to cut losses, or endure for 180 days?**
After all, the giants are currently expanding rapidly, covering 80% of the national market share in just two months. Moreover, while the giants are occupying points nationwide with their 'Thousand Cities Plan' to focus on market breadth, some regions are adopting a 'rural surrounding cities' strategy to focus on market depth. This has caused widespread anxiety among local groups in areas where the New Three Groups have arrived, as they face a critical moment of life or death.
Moreover, with the precedents of mobility and food delivery, no one can predict the outcome of this subsidy war, nor whether another track will be conquered by internet capital.
**-01-**
**What Can the New Three Groups Replicate to Conquer the Track?**
Whether the community group buying track will ultimately be harvested by internet capital **depends on whether internet giants can use capital subsidies to achieve a standardized national replication of the community group buying business, ultimately making it as uniform nationwide as mobility and food delivery.**
If it can be replicated, this battle is destined to be a game for the big players, and regional platforms can 'close their doors,' prepare, and exit early to avoid excessive losses that would leave them without capital for a comeback.
If it cannot be replicated, this battle will be driven by both the disruptive giants and local groups, entering an era of regional dominance.
**The community group buying business model has been validated, so there is no doubt about that. So, for the New Three Groups and even internet-genre platforms, what strong genes can be quickly replicated and spread nationwide?**
> **First, brand;**
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> **Second, SARS system;**
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> **Third, partial supply chain;**
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> **Fourth, warehouse and distribution management system;**
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> **Fifth, LD and team management system;**
However, whether the giants can rely solely on the above points to quickly expand is still debatable. The 3+1 model of community group buying is the underlying logic, execution-oriented and endogenous, and cannot be perfected in a short time. Moreover, as the third generation of e-commerce, community group buying integrates retail, e-commerce, and social interaction, with a long ecological business chain, making it not easy to replicate and unify everything through copy-paste.
**-02-**
**The Future Will Certainly Be Regional Dominance**
Conversely, it has always been emphasized that 'having money' is important, but it has also been emphasized that 'having money' is definitely not the first priority. Among internet giants, there are not a few cases of burning money on subsidies and ultimately losing both the bait and the fish.
The New Three Groups' attempt to use capital to create a unified national chessboard is destined to be a scorched-earth melee in the short term, but from the perspective of the track and business model, the future will certainly be regional dominance. **It is possible for the New Three Groups to become the leading group in one region or even N regions, but it is unrealistic for them to achieve capital dominance in both national breadth and depth.**
Why is it said that the future of the group buying track will certainly be regional dominance?
**1\. Community group buying cannot do without general fresh produce, and general fresh produce cannot bypass regional primary circulation**
**First, community group buying cannot do without fresh produce.** It is precisely because community group buying provides a solution for fresh produce that traditional e-commerce, which would not move without profit, has fully embraced it. However, making fresh produce flow nationally and standardized like traditional e-commerce goods is still a long way off.
Because the Chinese market is vast, and the overall agricultural situation is not developed enough, many regions' agricultural products still need to be consumed locally or nearby. Only a few single items can achieve direct sourcing from production areas, and even then, they still face problems of excessive transportation radius and severe loss.
From the platform's perspective, whether it is the New Three Groups or any regional platform, to develop long-term in a region, they must face the challenge of rebuilding a complete fresh produce supply chain. Especially for the New Three Groups, starting from scratch **requires an extremely long time cycle and also depends on the local primary circulation market.**
**2\. Community group buying has many SKUs, fast product cycles, and heavy business operations**
In the subsidy war, mobility and food delivery, which were ultimately dominated by the internet, have few products and light models, making it easy for capital to quickly replicate through subsidy operations.
**However, community group buying has numerous SKUs and heavy business operations, making unified operational management impossible.**
The reason is that community group buying follows a hit-product mindset, with rapid product iteration. It is understood that in 2019, the product cycle for community group buying was 3-6 months, but since this year, a product's cycle basically ends within 30-45 days. After that, the platform faces reselecting products and starting over, which poses great challenges to the team, organization, and business processes.
**On the other hand, in the operational process, because it involves warehousing and distribution, supply chain selection, from product selection, warehousing and distribution, to group leader sorting, and then to specific delivery, the entire chain does not allow for standardized replication, and uncontrollable factors can occur at any link.**
**3\. Complex business model with a long chain**
The community group buying business model is relatively complex, integrating retail, e-commerce, and social genes. Any weakness in one aspect can lead to malnutrition and premature death. Retail emphasizes category structure, e-commerce focuses on traffic, and social interaction leans on relationships. Attempting to use one standard and one set of actions to regulate the integrated marketing actions of three fields is a challenging topic.
The community group buying business chain is long, involving multiple relationships such as supply chain, platform, group leaders, warehousing and distribution, and service providers. Each entity is relatively independent, mutually supportive, and mutually constraining. A longer business chain requires high awareness and strong execution to ensure coordinated operations.
The business logic of two points and one line is the easiest to succeed; the purer the business links, the easier the transaction. **Community group buying involves a wide range of business links, many participants, and is execution-oriented. Attempting to use one system or one person to implement and drive a unified pace is unrealistic.** Community group buying is region-specific; most groups with influence adopt one strategy per city, one per district, or even one per link. This ensures that each regional group has its own warmth.
**4\. Standardizing group leaders is a pseudo-proposition, and de-group-leaderization is also a pseudo-proposition**
As the third generation of e-commerce, community e-commerce's greatest advantage is its ability to reduce distribution and sales costs, thereby enabling supply-side reform. Group leaders are an extremely important ecological link; they can reduce customer acquisition costs and maximize the enthusiasm of the marketing front end.
**As the core advantageous gene of community e-commerce, group leaders can only be strengthened or weakened at most.** The notion of de-group-leaderization was first proposed and advocated by internet platforms, with the strategic underlying logic of retaining users and seizing traffic in their own hands.
Community group buying without group leaders will certainly greatly increase customer acquisition costs. The value of community e-commerce lies in supply-side reform and consumption experience upgrade. If there is no value, community e-commerce may end up like previous fresh e-commerce, with a mess of feathers.
If one wants to achieve unified national marketing actions by replicating group leaders, then group leaders must first be standardized before national replication, but this is clearly a highly challenging topic.
From the perspective of group leaders themselves, their levels vary, educational backgrounds differ, and they are influenced by regional genes differently. For platforms, how to develop, manage, motivate, and retain group leaders, as well as the eight major group leader business execution actions and the standards for maintaining customer relationships through group leader contributions, cannot be unified nationwide. It is destined to be one strategy per city, or even one per district.
Therefore, the important factor of group leaders will neither be discarded nor standardized, making rapid replication impossible.
**5\. Community group buying combat organizations need internal cultivation**
The entire track actually knows that community group buying lacks talent. In a chat with a former executive of a leading fresh e-commerce company, it was mentioned, 'Subordinates who didn't perform well before have now been poached by group buying companies, and their salaries have tripled.'
**Because community group buying teams are endogenous organizations, parachuting in has a high probability of failure. Community group buying emphasizes execution and industry understanding, involves too many links, and is too complex, so it can only grow internally through gradual learning and evolution.**
For example, taking fresh produce, its business depth and complexity are far higher than mobility and food delivery, and also higher than standard product e-commerce. So people in fresh produce may need half a year to adapt to standard products, but those in standard products may not adapt to fresh produce even after a year. Poaching a high-level executive from a traditional leading company won't solve it.
**6\. Too many uncontrollable factors inside and outside the track**
**Currently, the group buying track is the hottest business trend, with big and small players crowding in and out, and enterprises, supermarkets, stores, and micro-businesses all on stage together, making it lively.**
Just the day before yesterday, it was rumored in the industry that JD.com would establish JD Preferred, integrating its three community group buying business units: Youjia Puzi, Ququ Gou, and JD Ququ Gou; Alibaba's Hema community group buying has begun nationwide recruitment.
Before that, multiple media outlets reported that ByteDance and Kuaishou would both enter the community group buying track, with Toutiao set to launch a 'Jinri Maicai' platform, and Kuaishou executives conducting field research in Changsha, Hunan.
This shows that the entire track is in a state of internal and external crowding, with too many participants making uncontrollable events possible at any time.
**For those already in the game, the entire internet industry is half-involved, with everyone evenly matched and harboring their own intentions. Even if they don't personally enter, they will cultivate proxies to fight against each other, and no one will actively help others succeed.** Therefore, the waters of community group buying will definitely become increasingly muddy, ultimately leading to a situation of regional fragmentation rather than allowing one party to dominate.
**Summary:**
Finally, for regional native groups, at the current stage, not making waves and surviving is the top priority. In this community group buying war, all parties have invested huge sunk costs, and it is extremely difficult for any company to claim the final victory.
**So, in the short term, it's a melee among giants; in the medium term, regional dominance; and in the long term, an era of circles.**
A few days ago, a mobile phone executive's remark that 'those who win the grassroots win the world' angered many. Here, I just want to say that this 'grassroots' is not that 'grassroots'; it's a normal phenomenon of consumption stratification.
The future of community group buying will certainly enter an era of circles. Some people want lower prices and are less picky about quality and appearance, while others are not price-sensitive and have strict requirements for quality of life.
At that time, for platforms, based on their long-standing tone and their consistent insight into consumers, they can each do business in different circles, going their own ways.
**So, in 2020, surviving and staying at the table is victory!**
> **Li Baolin | Community Group Buying Veteran, Initiator of the Central Plains Community E-commerce Club**
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> **He Nian | New Distribution Community Group Buying & New Retail Research Specialist**
**Add the author's WeChat****Note: Name~Company~Position**


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