Before community group buying, no one outside the Fifth Ring Road was used to buying fresh produce online; the place people loved to visit most was still the wet market. At that time, the wet market was a place full of the hustle and bustle of everyday life; even if you weren't buying vegetables, you'd go for a stroll. After community group buying rose, the atmosphere changed. Regarding this change, two things left the deepest impression on me: One is from my childhood watching "Crazy Ma," where the "famous tough guy of northern Liaoning," Fan Debiao, goes to the wet market to buy eggplants and insists on "swapping for a stronger one", which leads to a quarrel with Guangkun's wife, Haiyan, and eventually a spitting battle. The other is on December 29, 2020, a girl born in 1998 who worked for "Duoduo Maicai" collapsed at 1:30 a.m. in the freezing cold of minus 20 degrees Celsius in Urumqi. Before her death, her signature on the company's internal communication software read: I guard the border for Duoduo. Community group buying was once considered "a once-in-a-decade opportunity" and "would reshape China's internet landscape." According to Euromonitor, at that time, China produced over 1.1 billion tons of fresh agricultural products annually, with only 9% sold online. The internet was set to transform the industry with the lowest online penetration in China, and their goals were as vast as the stars and seas: Meituan's Wang Xing initially thought this business had a scale of hundreds of billions, but soon adjusted that number to "trillions." All of this was put on hold with the introduction of the new antitrust "Nine No's" regulations. Last month, I chatted with a friend at a major internet company. This friend received stock in the company's community group buying department, but after the antitrust crackdown, the market value plummeted, and the stock in his hands shrank to one-sixth of its original value. He was also forced to accept two job transfers within the company. As an industry practitioner, his view of community group buying differs from the outside world. For example, he gave me this example. During the severe lockdowns in Shanghai in April and May this year, every Shanghainese could probably feel that food delivery and courier services were not just a business; they also played an infrastructure role similar to "WeChat" and "Alipay," becoming an indispensable part of China's internet infrastructure. In my friend's view, community group buying would also become part of the internet infrastructure in the future. Why oppose and stop a new thing that is more efficient? Why resist the irreversible tide of history? I said because it could cause unfairness and put some vegetable vendors out of work. But my friend immediately retorted, is it necessarily right to refuse development and stop making the pie bigger just to protect the interests of a few?
"Before the invention of the automobile, about 100,000 people in London, England, made a living as coachmen, drivers, and manure cleaners, while the city's population was only about 2 million. To prevent cars from replacing horses and facing unemployment, London's carriage companies and coachmen staged over a thousand strikes and boycotts, but the wheels of history still rolled forward." On April 25, Meituan Youxuan announced that self-pickup points in the Beijing area would stop service. Before that, Meituan Youxuan had already begun retreating from the northwest region. This move by the industry leader signaled the formal end of this business. Community group buying came like a wave and receded like a wave. What did we gain, and what did we lose? To be honest, under my friend's series of questions, I didn't have a definitive answer. Because over the years, fairness and development have always seemed like a pair of contradictions that cannot be both achieved: If we talk about fairness without development, then fairness is meaningless; if we talk about development without fairness, then some people will always be the price paid. One day in September, I unlocked a shared bike and rode from Jiuxianqiao all the way to Sanyuanli Market, deciding to see for myself the place most affected by community group buying two years ago. The day I went was a weekday, and there weren't many people in the market at noon; it exuded a lazy atmosphere: a foreigner in slippers buying fish, a Beijing auntie in a Beijing accent haggling over prices, and a vegetable vendor dozing in a chair. I bought a few tomatoes at a stall, and as I handed them to the vendor, I noticed her eyes barely left her iPad the whole time; from the sound, she seemed to be watching some palace drama. This kind of peaceful, idyllic atmosphere was not seen in most wet markets two years ago, because at that time, vendors were anxious and fearful. According to The Paper, in 2020, sales at domestic wet markets fell by nearly a third. Some vendors with poor risk resistance were crushed within a few months under the triple pressure of shop rent, labor costs, and product backlog and rot. In stark contrast to the complaints of vegetable vendors, that year, internet giants entering community group buying were advancing triumphantly. In 2020, Youxuan was the business that Meituan founder Wang Xing valued most. He often attended Youxuan's biweekly meetings, asked questions on specific issues, and met with various entrepreneurs. According to LatePost: "Youxuan head Chen Liang selected people like ordering dishes, using the Meituan Maicai employee list to circle people, instantly transferring over 3,900 people, and pulling together a team in just 18 days." Liu Qiangdong announced at a company executive meeting that he would personally lead JD.com to win the community group buying battle, and whoever got the regional first place would receive a 20 million yuan reward for the corresponding person in charge. Huang Zheng, who had already stepped down as CEO of Pinduoduo, defined Duoduo Maicai as "the touchstone for Pinduoduo people." Not only did he assemble one-sixth of Pinduoduo's employees, but he also personally flew to Nanchang and other places for frontline investigations. Didi's Orange Heart优选 team hung a banner in their Chengdu office with eight big characters: "No choice but victory." Whether it was the food delivery war or the ride-hailing war a few years ago, the first thing giants do after entering is always burn money. This methodology has become second nature: first burn money on subsidies, fight a price war with competitors, then use low prices to eliminate rivals, and finally monopolize the market and raise prices. Entering community group buying was no exception. With potatoes at 0.49 yuan per jin and eggs at 5.99 yuan for 20, internet giants poured billions of yuan in funding into the market, leaving small vegetable vendors stunned. Meituan, the victor of the "thousand-group war," suffered strategic losses of up to 3 billion yuan in the fourth quarter of 2020 alone in its Youxuan business. Unexpectedly, the first to speak out against community group buying were not vegetable vendors, but convenience store and small supermarket owners. The reason was that community group buying pricing disrupted the retail system across regions. For example, a locally produced liquor in Urumqi had a traditional channel purchase price of 550 yuan per case, while Duoduo Maicai's selling price was 1 yuan lower than others' purchase price. After deducting the 10% commission for the group leader, each case sold at a net loss of 55.9 yuan. If they sell cheaper than your purchase price, how can you compete? So less than two weeks after Pinduoduo entered Urumqi, local convenience store and small supermarket owners spontaneously formed an "anti-community group buying alliance." It was also at this point that the outside world gradually became alert: why was community group buying considered a "once-in-a-decade opportunity"? It turned out to be a big chess move of "one fish, four eats." Almost everyone could see that vegetable vendors selling various fresh produce would lose their jobs, but fresh produce was just the beginning. Take Xingsheng Youxuan, the pioneer of the community group buying model, as an example: fresh produce accounted for only about 60% of its categories, with the remaining 40% including washing machines, air conditioners, color TVs, beverages, snacks, daily necessities, etc. Small supermarkets and convenience store owners resisted community group buying partly because of the imminent low-price dumping, and partly because once the platform masters big data in the future, it could more accurately predict local demand for various categories, which would be a dimensionality reduction attack on them. So vegetable vendors fall first, then convenience stores and small supermarkets, and then the distributor system suffers. In the past, after a factory produced a product, it needed to go through a distributor system, such as provincial agents, city agents, and county agents, before finally reaching consumers. Community group buying wanted to do this job too, directly through price subsidies, putting the retail end in a position where they couldn't sell unless they lowered prices. This also led to distributors pressuring manufacturers at the time, including well-known companies like Weilong Spicy Strips, which successively issued notices prohibiting any supplier from privately supplying community group buying platforms. For manufacturers, community group buying platforms were like a big monster: Once they really broke down the distributor system that manufacturers had painstakingly built over the years, then the community group buying platforms that monopolized the channels would negotiate with manufacturers ten times more aggressively than distributors. The fourth layer of harvesting was the users. When the giants eliminated other players and formed a monopoly on the market, someone had to "reimburse" the money burned in the price war. Raising prices to harvest was inevitable, because companies aren't really doing charity. To recap, the goal of community group buying was to "take over" the work of vegetable vendors, small supermarket owners, and the distributor system, turning their jobs into internet company jobs, which would inevitably lead to unemployment for these three groups. At the same time, you'll notice that this process did not actually add any new "demand." The vegetables people eat, the air conditioners they buy, and the beer they drink every year won't increase just because you do this job instead. In other words, the pie didn't get bigger; only the people eating the pie changed. Moreover, the means to achieve this goal were simple and crude: consuming a lot of social resources and using capital market money to dump goods at low prices, taking away the jobs of people in these three links. This is fundamentally different from cars replacing horses, because cars truly multiplied production efficiency, helped society accelerate, and made the pie bigger. For example, if dozens of photovoltaic devices in Xinjiang break down and the supplier is a factory in Shanghai, if the factory had to send someone on horseback to repair them, the loss would be huge, and the social wealth lost would far exceed a coachman's wages. On the afternoon of December 22, 2020, the State Administration for Market Regulation and the Ministry of Commerce jointly issued the "Nine No's" new regulations, the first of which was: "Do not abuse independent pricing rights through low-price dumping, price collusion, price gouging, price fraud, and other means." From then on, the fate of community group buying was almost sealed. Because apart from low-price dumping, these internet platforms did not have crushing innovation compared to the channels they were to replace, and they could not complete the replacement through legal market competition. In China's many years of developing country experience, too many people have already compromised to make the pie bigger and improve efficiency, such as our farmers and the laid-off workers in the Northeast. They haven't delved into fairness or not; as a group, their sacrifices may be no less than those of the glamorous people in society, but their contributions are silent. Furthermore, if the pie hasn't been made bigger, why should the people and millions of practitioners be forced to compromise? The giants who rushed into community group buying with tens of billions not only underestimated the state's determination to fight monopolies but also underestimated people's aversion to unfairness. Epilogue September in Beijing was already a bit cold. After wandering the market until evening, I noticed that pedestrians on the street were generally wearing long sleeves, and only I was in shorts and a T-shirt, like an intruder. Actually, I was always an outsider in Beijing; the housing prices here are too expensive. I believe many Beipiao (people working in Beijing without hukou) are like me, likely to leave this city in the future. As so-called white-collar workers, we now eat takeout every day, and whether there's a wet market seems irrelevant to us. Because it's the vegetable vendors, supermarket owners, and distributors who lose their jobs, and some people find it hard to empathize. But young people will eventually say goodbye to takeout. When facing pressures like marriage, housing, childbirth, and elderly care, the various pressures of life transmit to every day, which is essentially about eating, drinking, and daily necessities. Unless there's a chance to get rich overnight, every one of us will soon learn to budget carefully and quickly feel the attraction of vegetables, eggs, and pork in the supermarket's discount section. At that time, being able to bargain with vegetable vendors at the local wet market, buy truly fresh and cheap vegetables, and not worry about being harvested by monopolies is, for ordinary people: This fairness is precious. -END-