---
title: "Community Group Buying 3.0: The Era of Group Stores"
description: "Community group buying has evolved from its 1.0 origin in 2015, through the 2.0 group wholesale phase, to the current 3.0 group store era. Despite these iterations, the core success factor remains the supply chain, which is the most critical and challenging of the three key infrastructures: supply chain, group leaders, and warehousing and distribution."
author: "孟祥飞"
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published: "2022-10-22"
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# Community Group Buying 3.0: The Era of Group Stores

> Community group buying has evolved from its 1.0 origin in 2015, through the 2.0 group wholesale phase, to the current 3.0 group store era. Despite these iterations, the core success factor remains the supply chain, which is the most critical and challenging of the three key infrastructures: supply chain, group leaders, and warehousing and distribution.

In 2015, the prototype of community group buying began to appear in the market; in 2016, a group of entrepreneurs calling themselves group leaders rapidly spread this group-buying model from Changsha, Hunan; in 2018, some platforms entered a financing boom, and countless community group buying platforms emerged across the country. However, after capital entered, community group buying gradually deviated from its original purpose. On its path forward, community group buying has been continuously self-evolving, from the original 1.0 community group buying, to the rise of 2.0 group wholesale, and now to the 3.0 group store era. After multiple iterations and evolutions, community group buying has ushered in a new wave of entry opportunities. In fact, whether it is group buying, group wholesale, or group stores, they all originate from user organization. Ultimately, success depends on the supply chain, which is the most important and difficult of the three major infrastructures: supply chain, group leaders, and warehousing and distribution.

**01**
**Community Group Buying 1.0**
**Starts with Group Leaders, Succeeds with Supply Chain** Compared with the redundant channel links of traditional retail, community group buying is a new type of group purchase consumption model that directly connects the supply side and demand side of goods through group leaders. The delivery process generally can be divided into 4 steps:
1. The group leader recommends products to users in the form of pictures or videos in a WeChat group built through personal relationships and other means;
2. After confirming which products to purchase, users place orders and pay on the community group buying platform before 23:00 that day;
3. The platform orders goods from suppliers and delivers them to the group leader via its own or third-party logistics;
4. Users pick up their purchased goods at the group leader's pickup point the next day. This is the origin of the "pre-sale + next-day delivery + self-pickup" model, which later formed a new consumption model that compresses distribution links to create both fulfillment and price advantages. A prominent representative is Zhihua Zhiguo, which has grown for 8 years. Starting from fruit origins, Cai Shilong, a highly educated founder of Zhihua Zhiguo, blazed a new path with his own efforts. From Yipin Xianguo to the now somewhat Zen-like Zhihua Zhiguo, "one flower, one world; one fruit, one nature" is Zhihua's own understanding of community group buying, and it has carved out its own space in the industry through practical actions. The differentiated advantages of community group buying are prominently reflected in three aspects:
**1. In terms of product turnover**, it reduces the number of "hands" a product passes through, because more turnover not only increases loss but also adds layers of cost. Therefore, shortening the distance from product to consumer has always been a key direction of reform in the retail industry. The "central warehouse + grid warehouse" model that emerged and matured in the community group buying industry is still in use today; in terms of warehousing and distribution models, at least no better combination has been seen so far.
**2. In terms of user acquisition**, community group buying provides a new solution. Based on acquaintance social networks, it accelerates community aggregation and penetration into lower-tier cities through social networks, continuously driving relationship fission. In the process of expansion, it continuously strengthens trust in people and products, ultimately forming strong relationship chains that ensure repurchase rates.
**3. In terms of model replicability**, on the supply side, community group buying has fast product turnover, low inventory, and large batch sales volumes; on the demand side, social fission effects are prominent, and customer acquisition costs are low. This also explains why community group buying showed explosive scale growth during its infancy; at that time, both group leaders and supply chains were in a period of high dividends. Overall, as the "vanguard" of the new retail revolution, community group buying is a dimensionality reduction attack on traditional retail. With its rapid initial development momentum, this model seems flawless because, from the perspectives of supply chain, platform, and users, group-buying products: **first, have large, stable volumes and few links, which is friendly to the supply chain; second, the platform, as an "intermediary," can earn service fees after coordinating supply and demand between the two sides; third, users can group-buy better quality, fresher, cheaper, and more convenient products.** The main representatives of community group buying platforms include Diao Dao Jia, Zhihua Zhiguo, Youjing Youtian, Daqing Jiubai Street, etc. As mentioned earlier, the success of group buying depends on **group leaders in the early stage, warehousing and distribution in the middle stage, and supply chain in the long run**.

**02**
**Community Group Buying 2.0**
**Starts with Hot Products, Succeeds with Supply Chain** The group wholesale business first appeared in Chengdu, and the establishment of the Group Alliance in Taicang officially brought group wholesale into the broader group buying industry's view. Group wholesale is a "group wholesale, centralized procurement and distribution" business model. Many say that group wholesale should provide value in the channel, not just traffic thinking, because group wholesale aims to unite group leaders who have shown a trend toward BC integration, buying in large quantities, selling in large quantities, and also discarding in large quantities. To this day, the group wholesale business not only supplies group leaders but also supplies community stores, offering differentiated products and pre-sales. Many group leaders are increasingly accepting group wholesale business.
The emergence of group wholesale is an inevitable key node in the development of community group buying. All this is "thanks to" the fierce attack of capital groups. As early as 2018, capital had intentions to enter community group buying, but at that time it was just a small test, lightly investing in a few companies, mainly as experiments, without directly entering the field. It was not until the official start of the "mask era" in 2020 that various capital groups finally rolled up their sleeves and did it themselves. The competition was so fierce that it even triggered national policy controls. After severe involution in community e-commerce, the giants fell into a prisoner's dilemma, and group leaders were dragged into a mess.
**1. Group leader independence is the opportunity for group wholesale** After being "baptized" and "educated" by capital groups, some group leaders finally gained a new understanding of their roles and functions. When these somewhat independent group leaders appear, it means that after being forced to "train" by platforms, group leaders have the ability to independently operate 2C without the platform. At this point, the group leader themselves becomes a B-side, only needing to connect with a suitable S-side, i.e., the supply chain. If these group leaders form their own regional alliances, the power of dozens of group leaders purchasing and selling together is certainly not inferior to a local group platform. Thus, the business form of group wholesale was born. The core of group wholesale is to serve those group leaders who desire to break free from visible and invisible control. They need products, and they have their own multi-level distribution, but finding products themselves is troublesome. Therefore, uniting many small group leaders to form economies of scale in purchasing and selling became the precursor to the growth of group wholesale. In addition to organizing these scattered forces into a larger B-side, group wholesale also deepens and refines the supply chain, quickly making a product a hit, and using all its group leader resources to hype and distribute it, thereby maximizing the hot product within a short cycle. Furthermore, group wholesale does not participate in operating users. The emergence and development of group wholesale presupposes the emergence of independent group leaders.
**2. Group buying is to C, group wholesale is to B** During its evolution, community group buying gradually transformed itself into a complex and redundant to C mall model, benchmarking against supermarkets. After capital groups entered, it became completely digitized supermarkets, moving further away from true group buying. Group wholesale, on the other hand, is to B, benchmarking against circulation/distributors. Group wholesale aims for depth and product uniqueness. Traditional B2B provides full-category supply with standard product spot sales, while group wholesale does hot product B2B with a pre-sale supply chain. Group wholesale differs from group buying in that it systematically implements the logic of single products and hot products, continuously iterating in practice, and promoting and replicating on a large scale. Although the variety of products is not large or rich, sometimes only three to five products are offered, the order volume of these three to five products is enough to support the entire sales scenario. Decisively abandoning long-tail products with low volume, low profit, and high cost, and concentrating energy and firepower on the top hot products and single products, adhering to the principles of not repeating products that capital channels have done, not doing low-margin valueless products, and not doing products with low repurchase rates—this is the logic of group wholesale products. The emergence of group wholesale has improved distribution efficiency and enhanced the value of the group alliance platform, truly achieving best-selling, long-selling, and high-value products centered on large SKUs. It is undeniable that group wholesale originated from the traditional to B model, but its essence is a service that fully empowers group leaders, not a simple supply business. It is a complete set of output empowerment models from training to products to sales solutions. Community group buying is essentially a supply chain revolution, as the founder of Youjing Youtian expressed his view on community group buying. The core of the group wholesale business is supply chain products; only by finding good source goods and hot products can it truly empower group leaders. Therefore, the success of group wholesale also depends on the supply chain, which is why many group wholesale bosses have been running between production areas to find good sources. The main representatives of group wholesale include Chengdu Xiamang, Suzhou Jianhuolai, Shijiazhuang Shuoshuo Qinxuan, etc.

**03**
**Community Group Buying 3.0**
**Starts with Traffic, Succeeds with Supply Chain** The emergence of group stores is hailed as the Renaissance of community group buying, returning to simplicity. Under the current situation where the capital tide is blocked and local groups are restarting, the group store model allows group buying to return to its essence, from complexity back to simplicity, completing a cycle. So, what does the group store solve? Community group stores effectively solve the problem of tightness between the platform and group leaders, as well as how to make a single product a hit. With the rapid development of community group stores, when we sort out the logic of group stores, we find that the pioneer of community group stores, Xiaoxu Daojia, has created a unique "traffic + number reporting" approach that perfectly solves the existing problems of community group buying, how to build the supply chain, and how to resolve group leader relationships. It solves the traffic problem through aggressive customer acquisition, simplifies the consumer ordering process through number reporting, creates atmosphere, and thus makes single products a hit. By controlling the groups, it achieves the goal of controlling the channel, summarized as controlling stores, controlling products, and controlling traffic. Community group stores are very fast at building social groups; upon entering the store, customers are invited to join the group. On opening day, the group quickly reaches 1,500-2,000 people, and for the first few days, there are long queues. Many community group buying platforms are considering expansion to other regions, but they have not found a path for rapid expansion. Community group stores have the advantages of low investment, quick startup, and easy replication, making them suitable as a foundation for scale-level chains. Xu Yaoning, founder of Xiaoxu Daojia, introduced: "Stores are not just for group products; communities are not just for group buying." "Xiaoxu Daojia" is building a "one-kilometer economic circle" centered on stores, based on the community store economic model, with user needs at the core, fresh food and other daily necessities as core categories, local life services such as housekeeping, food, drink, and entertainment as extensions, and high-end durable goods like home appliances as upgrade categories, creating a "everything can be grouped" comprehensive solution for family life. The first thought of community group buying platforms opening stores is indeed survival and stability, but it is not just survival. New models are emerging, new pilots are landing, and the impact is wide enough to bring a wave of innovation to community group buying. Starting in Shijiazhuang and then spreading nationwide, the store-opening trend in 2022 gave community group buying platforms a new breakthrough and innovation point. A new starting point also means new opportunities. In an instant, community group buying has entered the 3.0 group store era. The representative platforms of the group store model mainly include Xiaoxu Daojia, Dianhejia, Meilintao, etc.

**The mall model of community group buying 1.0, the hot product wholesale model of community group buying 2.0, and the group store model of community group buying 3.0 are all main manifestations of the differentiation and iteration of community group buying, as well as a reflection of the prosperity of the community group buying industry track. There is no distinction between good and bad models; entrepreneurs have different genes. Only by combining their own actual conditions can they do well in community group buying platforms.**

Source: Kaiman 4000 (kaiman4000)
Author: Meng Xiangfei, Assistant Researcher at the Community Group Buying Research Institute
This article was written with the guidance of Teacher Guo Decang, Dean of the Community Group Buying Research Institute.

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