Capital is aggressively entering the fray, with various players taking turns on stage, creating a lively scene. As for who will last until the end and finally see the clouds part, perhaps everyone has a different answer in mind! In the capital winter, community group buying is exceptionally hot. Nearly 5 billion yuan in funds, with internet giants like JD.com, Meituan, and Meicai entering the fray, and top-tier capital firms such as Sequoia, GGV, IDG, Hillhouse Capital, and Jinshajiang Venture Capital expressing their enthusiasm for this new retail format with real money. After more than half a year of explosive growth, there is no doubt that the overall competitive landscape has already taken shape. Platforms backed by capital are aggressively expanding and rapidly claiming territory, while those that haven't gained capital favor can only take root in their regions, steadily advancing and still achieving positive cash flow. But when regional coverage density meets nationwide scale effects, who is stronger? For distributors with store resources, some product resources, and a willingness to transform, how many opportunities remain hidden in the community group buying sector? Bloodthirsty Battle, Initial Landscape Currently, community group buying primarily focuses on fresh products with high turnover and high purchase frequency, especially fruits, which are the mainstream category for major community group buying platforms. Previously, some claimed that fresh produce was the last fortress for e-commerce to invade offline, but times have changed; now online retail has not only conquered this fortress but also turned fresh produce into a competitive advantage. Community group buying, with its flexible purchasing methods and unique delivery methods, has led some consumers to shift their purchasing locations away from physical stores. For consumers, the advantages of community group buying lie first in convenient delivery—picking up goods near the company or residential area, with a short pickup path; second, in high-quality products at low prices; and third, in convenient after-sales service, all of which are highly attractive to consumers. Group buying platforms adopt a pre-sale system, determining purchase volume based on sales, thus lowering procurement costs; they also deliver to a unified location, reducing logistics costs. Consumers are satisfied, and platforms can make a profit, making it no surprise that community group buying has become a trend. While consumers are embracing community group buying, capital is also targeting it. Since the second half of last year, the frenzied influx of capital has brought unprecedented attention to the entire community group buying industry. According to incomplete statistics from New Distribution, there are no fewer than 200 community group buying platforms of various sizes nationwide, with a level of heat no less than the "Hundred Regiments War" of a few years ago. With capital backing, the competitive landscape of community group buying is increasingly concentrating toward the top, with phenomena like investment and mergers becoming common, while new industry participants continue to flood in, although the window for their development has significantly shortened compared to before. In Changsha, the birthplace of this community group buying wave, the capital heat also gradually reached a climax in the second half of 2018. A taxi driver who regularly runs the airport route even joked, "Recently, among three out-of-town tourists I picked up, one was coming to invest in community group buying, and the other two were here to inspect and prepare to invest." Although this statement is somewhat exaggerated, it reflects the heat of the capital market from a side angle. "The office is bustling with people; we have never felt so valued by capital," said Tang Guangliang, founder of Kaola Select, in an interview with reporters. As the most fiercely competitive market for community group buying, the situation in Changsha to some extent represents the current competitive landscape nationwide. "Those outside the city want to come in" because community group buying has almost no barriers to entry—just create a WeChat group, find a few cost-effective products, and a platform can gradually operate; "those inside the city want to go out" because the leading forces have basically formed, and capital won't give later entrants more opportunities, making rapid expansion almost impossible. It is widely circulated in the market that platforms that have received two or more rounds of financing are classified as the first camp, those with one round as the second camp, and the rest are platforms without financing, colloquially known as "guerrillas." According to research data from New Distribution, even among funded platforms, the majority are still lingering at the angel round, while those reaching B round or above are extremely rare. "Most community group buying platforms will die before reaching Series A," an industry expert analyzed to New Distribution. Cross-Border Disruption For physical retailers, the development of community group buying is not good news. Community group buying can provide fresh and suitable products and deliver them close to consumers, making physical stores sigh in envy. Community group buying retains consumers' footsteps from the residential area, bringing the purchase distance one step closer. It is foreseeable that after satisfying the "last mile" home delivery service for fresh products, horizontally expanding categories will undoubtedly become an inevitable choice for many community group buying platforms, and high-frequency FMCG products will surely become the primary target for their product expansion. In this situation, stores are being disrupted by group leaders, and consumers, lured by low prices, will inevitably be diverted to community group buying platforms. Under the pincer attack of online e-commerce and offline community group buying, traditional distributors will also face increasingly severe survival pressure. From B2C to B2B, the rise of every new channel means overtaking on curves and reshuffling of existing participants, and community group buying is no exception. For brand owners, they can leverage the channel network established by community group buying to quickly complete market penetration, maximize coverage of as many consumers as possible, and rapidly achieve explosive sales growth. For most distributors who want to venture into community group buying, besides lacking a fresh supply chain foundation, the lack of community operation capabilities and competition from leading community group buying platforms deter a large portion of distributors from entering. So, is there still an opportunity for distributors to transform into community group buying? Facing competition from leading platforms, can regional small platforms still survive? In response, Tang Guangliang said, "The market has no fixed rules; anyone has a chance. There are too many anxious entrepreneurs; uniting vertically and horizontally will be the last chance for everyone to become the king." In Tang's view, the current community group buying battle is like the Warring States period; unification has not yet been achieved. If relatively weak entrepreneurs can unite to seek common development, they could completely become the final kings. Following the same path as giants will leave no opportunity; opponents who have already run ahead won't make way for you. This is an era of "I eliminate you, regardless of you." Regional community group buying companies can indeed stay in a corner and survive, but capital-driven leading platforms won't give regional platforms the chance to be "content with small wealth." "The market is only so big; if you take a small piece, I naturally eat less, and at this stage, investors won't allow such a phenomenon," a senior executive from a leading community group buying platform told New Distribution. Tang Guangliang believes this rapid expansion is an inevitable result after capital enters. "Capital entry accelerates corporate evolution; companies must complete continuous growth and optimization while expanding at high speed. This will be a challenge for the leaders of any enterprise." Facing competition from national leading platforms, Tang Guangliang stated, "Kaola Select has the ability and the willingness to stand up, sincerely inviting heroes from all over to join, and work together with community group buying enterprises to conquer the world." Currently, Kaola Select has officially announced its national franchise plan, officially opening franchise opportunities to traditional distributors. As the community e-commerce brand under Xin Gaoqiao, a well-known domestic FMCG B2B platform, Kaola Select relies on community convenience stores and uses community group buying with limited-time flash sales to continuously provide community consumers with high-quality selected products and services that exceed expectations. As a representative of the domestic pioneering convenience store + B2B model, Xin Gaoqiao's influence and digital distribution capabilities in the Hunan convenience store industry and FMCG sector are beyond doubt. In Changsha, where community group buying is booming, Kaola Select has firmly established a foothold and gradually grown into a force to be reckoned with. This franchise opening not only provides distributors with brand support and helps quickly acquire customers but also highlights Kaola's support for distributors in supply chain, training, technology, and capital.
Supply Chain: With both FMCG B2B and retail genes, there is no doubt that Xin Gaoqiao has deep accumulation in the supply chain. Similarly, Kaola Select integrates hundreds of upstream fresh fruit and agricultural product production bases, conducting large-scale procurement from the source, ensuring food safety while maximizing benefits to consumers;
Training: As the most critical link in the entire community group buying chain, the group leader, Kaola Select not only helps distributors train group leaders but also helps them connect online and offline for dual-channel customer acquisition;
Technology: For the technical capabilities that traditional distributors lack, Kaola Select's professional technical team can provide comprehensive technical guidance and support;
Capital: For distributors with ideas to quickly expand into other market regions, Kaola Select can also provide financial support to help them grow into regional kings. Regarding the competitive landscape of community group buying in 2019, Tang Guangliang believes that having a large number doesn't mean living with dignity. It's essential to strategize and plan; only by planning well can one ultimately share in the feast of community group buying. Only by uniting vertically and horizontally, rallying all forces that can be united, and joining together can one effectively compete against the top-tier competition. "Why not take a detour instead of a curve? Overtaking on a borrowed path—who says dominance is predetermined?" Tang Guangliang told New Distribution, "Kaola Select specially invites heroes from all over to plan great deeds together, uniting vertically and horizontally for a win-win future." Tips will be paid 400-2000 yuan once the tip is adopted. China FMCG + Internet Professional New Media Dedicated to FMCG manufacturers' transformation and upgrading and channel digital solutions