---
title: "Alibaba Enters Community Group Buying: Is the Cainiao Station Strategy Viable?"
description: "Alibaba has entered the community group buying space through Cainiao Stations and Taobao, but faces challenges against WeChat's ecosystem. The article questions whether this model can succeed and whether community group buying will become a lasting retail force."
author: "王军"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2019-01-18"
language: "en"
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# Alibaba Enters Community Group Buying: Is the Cainiao Station Strategy Viable?

> Alibaba has entered the community group buying space through Cainiao Stations and Taobao, but faces challenges against WeChat's ecosystem. The article questions whether this model can succeed and whether community group buying will become a lasting retail force.

Click image for details
> Core Guide:
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> 1. Why is Alibaba entering community group buying?
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> 2. Cainiao Station + Taobao vs. WeChat ecosystem: What are Alibaba's chances?
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> 3. Is community group buying a flash in the pan, or will it truly become the third pole of Chinese retail?
At the 2019 New Marketing opening strategy class, the New Marketing theory system, through three-dimensional space—the integration of "heaven, earth, and human" networks—achieving a combined marketing model from offline to online, and then to community, was unanimously recognized by many participating entrepreneurs.
Community group buying is precisely a business model that fully conforms to this theoretical model. Starting in the second half of 2018, community group buying, which originated in Changsha, showed no signs of slowing down entering 2019, but rather spread more comprehensively.
> On January 9, media reported that 58.com had officially entered community group buying, launching "**Daojia Youxuan**" (Home Selection), which cooperates with property management to open offline stores, providing C-end users with cleaning, housekeeping, and other services, as well as high-frequency daily necessities like fresh produce and household items.
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> On January 12, Alibaba officially entered community group buying, starting its competition for this offline social retail scenario through the "**Cainiao Station + Mobile Taobao**" format.
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> On January 14, the community group buying platform "**Jinlin**" (Neighbor) received nearly 20 million yuan in angel investment from Huayao Capital.
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> On January 18, Suning Xiaodian's community group buying business officially launched, and it will release the community group buying app "**Su Xiaotuan**".
Interestingly, during a public forum exchange in January, Hema Fresh CEO Hou Yi said when discussing community group buying: "**I think this business model will probably not be talked about after half a year, because it cannot create real commercial value. As a marketing tool, it's really good, and we are also doing it. It's great for activities and attracting new customers, but it doesn't create value.**"
Of course, this is just a sentence excerpted from his lengthy on-site remarks and cannot fully represent Mr. Hou's complete views.
But that doesn't matter.
Because when Hema Fresh first started operating in 2016, it established many WeChat groups to manage users, but there were no mini-programs. It could only distribute Taobao-like password content in WeChat groups to drive traffic to its own app, which was just advertising and not a business model.
However, social e-commerce, especially LBS-based WeChat group e-commerce, is undoubtedly a viable business model. The current hot community group buying is based on the WeChat ecosystem, and Alibaba is unwilling and unable to truly participate.
Imagine a social app with 1 billion daily active users. Its community traffic value, combined with mini-programs, has built the underlying ecosystem, allowing new e-commerce models and brands to continuously grow. For entrepreneurs, this is undoubtedly an excellent soil for survival! So we see many big players and entrepreneurs positioning themselves.
**What does Alibaba do? Of course, it takes action!**
A few days ago, the "**Station Group Buying**" module quietly launched in the Cainiao Station message account on Taobao. Well, how to put it? It's well hidden, the entrance is not easy to find, typical of a test.
**Entry Guide:**
1. Search for the keyword: Cainiao Station in the Taobao homepage search bar.
2. Enter the station message account through the top direct window.
3. Enter the "Station Mall" secondary page "Station Group Buying" in the bottom menu.
4. See the LBS-based Cainiao Stations, showing the nearest ones within 500 meters in Tianhe District, Guangzhou.
5. Group purchase product page.
Since it's an early version, the products in this area are not rich; the products launched in Wuxi are more abundant. But from the information released so far, we can see the **core points of the current version of Cainiao Station community group buying:**
> 1. Centered on LBS-based Cainiao Stations.
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> 2. Pre-sale self-pickup model + traffic diversion model.
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> 3. Group buying sells at lower prices, directly sending 5 yuan coupons (traffic diversion model).
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> 4. Clicking on products directly diverts to Tmall stores or Juhuasuan, with free shipping on orders.
Overall, it feels like a testing phase, including both self-pickup and traffic diversion models. The traffic diversion logic is probably not very effective due to the deep entrance, but the self-pickup model is of more interest. Because the pickup point is none other than Alibaba's self-built core system—**Cainiao Station**.
About the Strategic Value of Cainiao Station
Cainiao Station, as one of the five strategic directions of Alibaba's Cainiao Network, had over 40,000 Cainiao Stations by April 2017, providing package collection and delivery services for online shoppers, covering diversified last-mile services.
In 2018, Alibaba emphasized at its investor conference: "Cainiao has also partnered with major Chinese express companies to build a new type of terminal network, Cainiao Station, which handles over 10 million packages daily. This is China's largest urban terminal network and the only terminal network providing diversified solutions such as self-pickup, locker delivery, and home delivery, and has become the industry's terminal infrastructure." The strategic value of Cainiao Station is evident.
The exact number of new Cainiao Station franchises this year is unknown, but conservative estimates exceed 40,000, mainly composed of campus stations and community stations. It adopts a zero-franchise-fee model, requiring review and a 3,000 yuan deposit paid via Alipay. Community stations are the main type, primarily cooperating with small shops, providing specific services:
> **1. Parcel collection:** Main business. Early on, there were subsidies of 0.6 yuan per piece.
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> **2. Parcel delivery:** Secondary business, fewer orders but higher revenue.
To ensure a break-even for an offline point that only operates collection and delivery services, it needs to handle over 500 orders per day. If it can reach 700 orders or more at high-quality points, it can expect monthly revenue of 10,000 yuan.
**Operational Difficulties:**
1. Cainiao Stations have few profit channels.
Therefore, despite low franchise fees, profitability is extremely limited. More business must be developed. If the Cainiao Station itself is a small shop, it only needs to provide shelf space, and Cainiao packages achieve offline traffic diversion. So at this stage, Cainiao Stations are mostly operated by small shops.
2. Lack of management capabilities leads to unstable service quality.
**Pain Points:**
To keep such an important strategic product vibrant and rapidly growing, the fundamental core issue must be solved: how to give every Cainiao Station franchisee more ways to make money! Otherwise, not only will growth be sluggish (the official numbers weren't disclosed in 2019), but it will also face competition (Fengchao has already surpassed 50,000 points), and risk losing franchisees. Early subsidy policies cannot support long-term, and there must be self-sustaining capabilities.
Therefore, **commercializing Cainiao Station is an urgent task! It's both offensive and defensive. Because these Cainiao Stations have already started their own commercialization path, and community group buying is the first choice.**
**Advantages:**
> 40,000 Cainiao Stations are close to consumers, with a high starting point.
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> They also have Taobao system traffic.
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> Massive product library.
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> Alibaba as the parent.
Competition: Your Group Leader, My Group!
As analyzed, well-performing Cainiao Stations are generally community small shops because offline operating costs can be reused. These small shops are precisely the potential group leaders that community group buying platforms target during ground promotion. 40,000 across hundreds of cities is not many. Once various players divide them, the good ones will be gone.
Currently, when all community group buying platforms sweep the streets to recruit group leaders, Cainiao Stations are one of the preferred types. Moreover, Cainiao is a light franchise, with no control over franchisees joining other community group buying platforms. Watching them leave without being able to do anything—you can't stop them from making money.
Cainiao Station franchisees are familiar with the internet, have income needs, are receptive to new things, and highly recognize community group buying. It's a natural fit. The author has contacted some ground promotion personnel from community group buying platforms, and the common feedback is that recruiting Cainiao Stations is relatively easier.
Undoubtedly, this is a competition of speed.
A Group Without Social Sharing?
The biggest question is: Alibaba lacks a complete high-frequency community social system. How will it aggregate traffic around Cainiao Stations and activate old users for repeat purchases daily? The author imagined such a path in industry community discussions:
> 1. Cainiao Station offline marketing activates seed users (easily established).
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> 2. Aggregate users through Taobao groups, forward product links in groups for daily marketing (what about Taobao users' habits and open rates?).
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> 3. Self-pickup pre-sale fresh products + divert to Juhuasuan free shipping products, rapidly expanding the product library (established).
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> 4. In the future, integrate more Alibaba system traffic for interaction: DingTalk? (unknown).
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> 5. Alibaba is likely to test multiple product lines; Cainiao Station might just be one of them. (high probability).
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> 6. How long has it been since Alibaba's platform had a new e-commerce listed sector?
Too many uncertainties have led the industry to joke that **community group buying has no Alibaba**.
**Final Thoughts:**
The entry of giants has undoubtedly added fuel to the fire of community group buying.
Unlike startups going all in, giants seem to move slower. However, once initial testing is complete, the resources and power of giants depend only on determination. With such a stance, we see 58 also entering the community group buying field as a latecomer.
Is it really a flash in the pan as Mr. Hou Yi judged, and will it be forgotten after half a year? Or will it become a new force as the third pole of Chinese retail?
**In today's context of sluggish online traffic growth and rising customer acquisition costs for e-commerce, more and more industry practitioners are beginning to think:**
> Where will the next inflection point for the rapidly developing community group buying 1.0 model appear?
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> Mini-programs are still iterating rapidly in 2019; what more possibilities will the evolution of underlying infrastructure bring?
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> In Changsha, which has entered price wars, egg prices are already influenced by community groups. How can small players without capital support cope?
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> How can supply chain capabilities evolve? How long can selling vegetables at low prices last?
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> How can scattered orders and daily updated categories achieve the ideal of large-scale direct sourcing from production areas?
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> How to deal with the formation of user WeChat group shopping habits and fatigue cycles?
New Distribution hopes to focus more on efficiency evolution in details rather than re-arguing so-called model disputes. What is meant to come will come.
To this end, from March 16 to March 18, at the Longfeng Hall of Chengdu Longemont Hotel, New Distribution will hold the 2019 (5th) FMCG + Internet Conference. At that time, we will invite founders, executives, supply chain service providers, and well-known marketing experts from first-tier community group buying platforms to discuss community group buying topics together in Chengdu. We look forward to seeing you! Click "Read Original" for more details.
Wang Jun: Famous new retail expert. Chief retail analysis expert and special columnist for New Distribution. Previously worked at: Quanshi Convenience Group, HNA Zhanghe Cloud Warehouse, and Radio and Television Group. Has rich practical experience in FMCG supply chain and new retail channels. Has conducted in-depth research on innovative fields such as community group buying, unmanned retail, and IP commercialization.
**Extended Reading from the Author's Community Group Buying Column:**
If you are interested in the above content, feel free to scan the code to join the New Distribution WeChat community.
The community includes: FMCG B2B, community group buying e-commerce, internet transformation, marketing innovation, and other themed communities, as well as investor, CEO, and marketing expert communities. Scan the QR code below to join. When adding friends, please indicate your identity and purpose.
New Distribution will hold the **2019 (5th) FMCG + Internet Conference** during the Chengdu Spring Sugar and Wine Fair from March 16 to March 18. This conference will focus on the topic of **"Breaking the Game"** and conduct in-depth discussions with numerous brand owners, supply chain service providers, distributors, retailers, and others.
Compared to previous conferences, this summit will be fully upgraded. In addition to original topics such as **channel innovation, city distribution logistics, and distributor transformation**, it will add multiple parallel forums on **new marketing cases, IP + FMCG empowerment, community group buying, and innovative retail**. Through three days of ten high-density, high-quality expert sharing sessions, we believe every brand owner and distributor can learn the latest business models, expert opinions, and practical methods, finding new tools and methods for their own breakthrough in 2019, and returning to the track of rapid growth.
******Conference Time: March 16-18, 2019** **Conference Venue: Longfeng Hall, Chengdu Longemont Hotel**
Conference Topics
**2019 5th FMCG + Internet Conference**
Date| Time
| Venue| Topic
3.16
| All day| Main Forum| Breaking the Game—2019 (5th) FMCG + Internet Conference
3.17| Morning| Parallel Forum 1| New Logistics, New City Distribution
Parallel Forum 2| How Can Distributors Achieve Iterative Upgrades?
Afternoon| Parallel Forum 3| IP Empowerment, Boosting Brand Growth
Parallel Forum 4| How Can Community Group Buying Restructure the Value Chain?
3.18| Morning| Parallel Forum 1| Retail Scenario Innovation
Parallel Forum 2| New Product Sales Public Course
Afternoon
| Parallel Forum 3| Social E-commerce
Parallel Forum 4| New Marketing Public Course
Proposed Guests
Chen Qiwei, Chairman of Coca-Cola (China) Investment Co., Ltd.
Zhao Shuanglian, Chairman of COFCO Group Co., Ltd.
Lin Bibao, Chairman of PepsiCo Greater China
Wang Chaocheng, Founder of Yijiupi
Su Xiaoxin, Executive President of Zhongshang Huimin
Zong Fuli, Chairman of Hangzhou Wahaha Group Co., Ltd.
Chen Duye, General Manager of Toutiao Marketing Center
Lin Xiaohai, General Manager of Alibaba Retail Link
Yang Qianhui, Chairman of Ting Hsin (Cayman Islands) Holding Corp. China Region
Chen Xiaodong, Senior Vice President of Nestlé Greater China
Zhang Nan, General Manager of Douyin Short Video
Tao Shiquan, Founder of Jiangxiaobai
Cui Zhen, Founder of Hui Xiadan
Liu Bo, Vice President of Best Inc., General Manager of Best Dianjia
Ye Maozhong, Famous Marketing Expert
Li Jiaoshou, Famous Marketing Expert
Xiao Ma Song, Independent Strategic Marketing Consultant
Liu Chunxiong, Founder of New Marketing Theory
Fang Gang, Famous Marketing Expert
Bai Ya, Founder of Youzan
Niu Enkun, Famous Marketing Expert
Wang Qi, Founder of Weijie City Distribution
Wang Shenbing, Founder of Zhongke Shangruan
Chen Siting, Founder of Wanchaobang
Rui Yun, Founder & Chairman of Dianda
Huang Wei, General Manager of Uni-President Group Food Business Division
Liu Peng, Vice President of Chongqing Jiangxiaobai Wine Co., Ltd.
Ma Xiaolong, Marketing Director of Taishan Beer
Wu Jinghe, General Manager of Caihua Trading
Tang Xiangyang, General Manager of Lidu Liquor Industry
Guo Guangyu, General Manager of Squirrel Small Shop
Wang Jun, Famous New Retail Industry Expert
Liu Xiaoting, Famous New Retail Industry Expert
Wang Jinghua, CEO of Miduo Big Data Engine
Lin Feng, Chairman of Beijing Jundu Zhuoyue Consulting Co., Ltd.
Chen Ruifen, General Manager of Uni-President Enterprise Tea Business Group
Zhu Zhentao, CEO and Chief Product Officer of Jumi Intelligent
Zhuang Jianzhong, CEO of Meinian Changxiao
Miao Qingxian, Chief Consultant of Shanghai Yihe Marketing Agency
Ding Ding, Founder of Fans Factory
Liao Chuan, CEO of Xian Shiji
Zheng Yubin, CEO of Zhangshang Kuaixiao
More guests are being invited...
Ticket Information
Type| Price| Early Bird Price| Benefits
Regular Ticket| 599
| 399| 1. Participate in the full-day conference and all forum activities;
2. Receive conference guide, agenda, and other meeting materials;
3. One copy of "2018 China FMCG B2B Competitiveness Survey Report";
4. Early bird discount limited to 200 tickets, first come, first served.
VIP Ticket| 1999| 1299|  1. Reserved front-row VIP seats in the main venue;
2. Dinner voucher for the closed-door banquet on the evening of the 16th;
3. Receive conference guide, agenda, and authorized guest PPTs and other meeting materials;
4. Participate in the full-day conference and all forum activities;
5. One copy of "2018 China FMCG B2B Competitiveness Survey Report";
6. Early bird discount limited to 50 tickets, first come, first served.
Registration Method
**Registration is now open.** Long press the QR code below** or **click "Read Original" to register**. Early bird tickets at 66% discount are limited to 200 and are selling fast...!
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Previous Conference Review
Click the links below to review the highlights of the 1st, 2nd, 3rd, and 4th FMCG + Internet Conferences:
**-END-**


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