---
title: "Community Group Buying: A Brutal Arena"
description: "Being pushed to the forefront by capital and catching the dividend period is fortunate, but forming a core competitive advantage and continuously attracting consumers is the key to standing out and surviving long-term in the melee. In the first two months of 2019, the community group buying sector saw intensified actions, including Suning's launch of 'Su Xiaotuan' and the financing of Squirrel Pinduoduo."
author: "千寻雪"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2019-03-02"
language: "en"
canonical: "https://xinjignxiao.com/en/articles/community-group-buying-a-brutal-arena-06dfdfa4/"
markdown: "https://xinjignxiao.com/en/articles/community-group-buying-a-brutal-arena-06dfdfa4.md"
original_source: "https://mp.weixin.qq.com/s/gJRbUQmWzBgnYfnVVzoZeA"
translation: "https://xinjignxiao.com/zh/articles/%E7%A4%BE%E5%8C%BA%E6%8B%BC%E5%9B%A2%E4%BF%AE%E7%BD%97%E5%9C%BA-06dfdfa4.md"
attribution: "New Distribution — https://xinjignxiao.com/en/articles/community-group-buying-a-brutal-arena-06dfdfa4/"
usage_policy: "https://xinjignxiao.com/ai-policy.txt"
---

# Community Group Buying: A Brutal Arena

> Being pushed to the forefront by capital and catching the dividend period is fortunate, but forming a core competitive advantage and continuously attracting consumers is the key to standing out and surviving long-term in the melee. In the first two months of 2019, the community group buying sector saw intensified actions, including Suning's launch of 'Su Xiaotuan' and the financing of Squirrel Pinduoduo.

Click the image for details
Being pushed to the forefront by capital and catching the dividend period is fortunate, but forming a core competitive advantage and continuously attracting consumers is the key to standing out and surviving long-term in the melee.
Just two months into 2019, the community group buying sector seems to be moving more aggressively:
> On January 18, Suning Xiaodian launched its community group buying service "Su Xiaotuan";
>
>
>
>
> On February 24, the community group buying platform Squirrel Pinduoduo announced the completion of a $31 million Series B1 financing;
>
>
>
>
> On February 25, "Meiri Pinpin" (Daily Pinpin), which was in internal testing, postponed its public beta due to traffic exceeding expectations. Miss Fresh told Ling Shou, "Due to traffic exceeding expectations, some functions during internal testing were unstable."
Additionally, media reports indicate that 360 Finance Group is also incubating a social e-commerce project internally called "360 Finance E-commerce," and has begun merchant recruitment, including both group buying and distribution products...
Established e-commerce companies and new players are accelerating their rush into the "group buying" track.
****01****
**The heat of community group buying has attracted increasing capital attention.**
According to QuestMobile data, to date, 23 platforms in the social group buying field have received financing, with total financing exceeding 4 billion yuan.
Group buying is not new; as early as 2016, community group buying quietly emerged in communities in second- and third-tier cities like Wuhan and Changsha. It rose in the second half of 2018, with platforms such as Niwonin, Shixianghui, Linlinyi, Shihuituan, Squirrel Pinduoduo, and Kaola Select receiving financing ranging from tens of millions to hundreds of millions of yuan, with cumulative financing exceeding one billion yuan.
Well-known VCs have all entered, including Sequoia Capital, IDG Capital, GGV Capital, and ZhenFund, further accelerating industry development and forming a new "windfall."
But the model is not new either: it is basically community-based, with mothers or store owners becoming group leaders, organizing community residents to group buy online via WeChat groups and mini-programs, and completing delivery offline. Orders are placed online the same day, and self-pickup occurs in the community the next day, with the platform providing procurement, logistics, warehousing, and after-sales support.
Relying on the traffic dividend from WeChat's massive user base, the pursuit of high cost-performance and purchase channels in lower-tier markets, and factors such as low barriers and high replicability, the community group buying market has developed rapidly, quickly spreading like wildfire across the country with hundreds of platforms of varying sizes.
An investment insider said that the main reason community group buying attracts capital attention is that it can generate good cash flow within a few months and expand rapidly. The operating model is light, investment is low, and results are quick; even if it doesn't become a large platform, the financial return on investment is considerable.
However, it is foreseeable that as the window for community group buying entrepreneurship closes, future competition will become increasingly fierce, and capital will gradually become more rational, concentrating more on leading players.
****02****
Ling Shou found through analysis that in the past two years, players in the community group buying field mostly started in second- and third-tier cities, with a model of deeply cultivating a specific city as the target market and then radiating outward.
There are those backed by local traditional retailers, such as Xingsheng Youxuan, Linlinyi, and Kaola Select; and there are entrepreneurial teams from internet giants, such as Liu Kai, Chairman and CEO of Niwonin, who was the first product director of Tencent's mobile game business and a Tencent investment director; Yang Jun, CEO of Squirrel Pinduoduo, who was Meituan's fourth employee and head of sales, having experienced the group buying war and Meituan's transformation; and Dai Shanhui, CEO of Shixianghui, who was a founding team member of fresh e-commerce Benlai Life.
Group buying platforms with traditional retailer backgrounds not only have high-quality supply sources, mature store systems, and strong supply chain management capabilities... but also have advantages in capital, brand influence, and regional structured management.
Entrepreneurial players with internet giant backgrounds are skilled in "internet play" and are better at telling stories to win capital favor. After receiving capital support, they often focus on supply chain, either building their own warehousing and distribution systems or integrating traditional supply chain enterprises. They strive to consolidate their strength and capture market share before the real battle begins, thereby increasing their bargaining power against competitors later.
The group buying wave is surging, and with more capital entering, group buying is no longer a solo carnival for small and medium players; e-commerce giants are also moving with the wind.
Alibaba launched "Station Group Buying" on mobile Taobao to enter community group buying; JD.com launched the "Youjia Puzi" mini-program with group buying and flash sale functions at the end of 2018; Meituan Dianping's mini-program launched "Good Products Group Buying"; fresh e-commerce Miss Fresh first launched the "Meiri Yitao Yiqipin" mini-program, and recently tested the "Meiri Pinpin" APP...
A new capital "feast" is unfolding, presenting a situation of a hundred schools of thought contending.
****03****
Entrepreneurial players and giants are fighting hand-to-hand. Will the giants dominate, or can entrepreneurial players rise abruptly and carve out a path to survival?
Many industry insiders point out that the group buying war ultimately comes down to supply chain. Fresh produce is the largest core category in group buying, and most platforms currently focus on fresh produce. But to control quality and achieve stable supply, the biggest challenge is the supply chain.
Zhang Kui, General Manager of Suning Group Buying, judged that after four years of development in social e-commerce, competition has gradually entered an oligopolistic pattern. Whoever has a more systematic and comprehensive supply chain layout will have the opportunity to surpass competitors in the second half of the competition and achieve a curve overtaking.
Against the backdrop of intensified industry competition, companies with supply chain advantages have begun to try to leverage differentiated advantages to gain the upper hand.
JD.com is attempting to change product categories. Recently, it was reported that JD Logistics, in conjunction with Shaxian Snacks, launched a cold chain self-pickup cabinet brand called "Jingsha." Currently, the Jingsha project is in internal testing in Zhengzhou, with 100 Shaxian Snacks stores equipped, and it is expected to expand to 500 stores in 2019. Participating brands include Qianweiyangchu, Chumuxiang, Dongyuan, Dacheng, Walls, Baqiyi, Baijifu, Huaying, etc.
Additionally, Meiri Pinpin, which recently launched internal testing, is attempting to operate based on the platform's own characteristics.
An insider at Miss Fresh told Ling Shou that the current external positioning of Meiri Pinpin is inaccurate. Unlike previous community group buying models that rely on third-party logistics for delivery, with goods shipped directly from the place of origin to the group leader, and users picking up goods from the group leader, Meiri Pinpin cooperates with investor Miss Fresh's logistics system of "urban sorting centers + community front warehouses," enabling fastest delivery within 1 hour in 17 cities nationwide, and delivery within 48 hours in most core cities.
Meiri Pinpin's improvement in delivery speed not only ensures the freshness of fresh products but also expands the scope of Meiri Pinpin's communities, no longer limited by geographical location, and the group leader's network is no longer restricted by self-pickup logistics. This also means that Meiri Pinpin's users are not limited to a certain group like mothers; anyone willing to share quality products on their social circles and earn extra income after work is within its target audience.
However, during internal testing, Meiri Pinpin's traffic exceeded expectations, causing some functions to be unstable, and the originally scheduled public beta was slightly postponed. Various bugs have affected user experience to some extent. For Meiri Pinpin, how to improve user satisfaction and maintain reputation after the official public beta launch is an urgent issue to address.
But behind this hot "feast," some hidden concerns have already begun to emerge.
****04****
Severe homogenization is one of the core issues currently facing the community group buying field.
Currently, there are hundreds of platforms of varying sizes in the industry, with new and old players competing on the same stage, and operating models and products are largely similar. In this context, to break down barriers, besides adopting a price war that "kills a thousand enemies and loses eight hundred," a higher-level approach is to continuously provide high cost-performance products and quality after-sales service, enhancing user experience and increasing user stickiness. Whether this can be achieved still tests the supply chain capabilities of community group buying platforms.
Ling Shou pointed out in its 2019 retail forecast that difficulties in secondary monetization of traffic, lack of group leader loyalty, and user fatigue from competition among group buying companies are unavoidable drawbacks of community group buying. Additionally, severe homogenization and user experience issues are also Damocles' swords hanging over many companies.
The management and control capabilities of community group buying platforms over group leaders also need further improvement. Most platforms have a high dependence on group leaders, yet they have no effective management methods. Group leaders are an important channel for platforms to acquire and retain customers, but they have not established a very solid employment or cooperative relationship with the platform, are easily tempted by short-term interests and poached by competitors, and have high mobility. At this time, having a comprehensive group leader system that can form long-term binding is crucial; otherwise, it only increases the strength of opponents and makes wedding clothes for others.
Furthermore, expanding product categories in community group buying is relatively difficult. Community group buying currently appears to be just a product of Pinduoduo's group buying model combined with the high-frequency category of fresh produce. The logistics advantages of local communities can only be reflected in fresh produce, making it difficult to expand categories. If multiple categories are to be expanded, both chain traditional retailers and e-commerce giants with full-category layouts will be strong competitors.
For all players on this crowded track of community group buying, being pushed to the forefront by capital and catching the dividend period is fortunate, but forming a core competitive advantage and continuously attracting consumers is the key to standing out and surviving long-term in the melee.
Source: Ling Shou (ID: lingshouke)
New Distribution will hold the **2019 (5th) FMCG + Internet Conference** during the Chengdu Spring Sugar and Wine Fair from March 15-18. This conference will focus on the topic of **"Breaking the Game"** , with 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 and exchanges, we believe every brand owner and distributor can learn the latest business models, expert opinions, and practical methods, finding new tools and methods to break the game in 2019 and return to a path of rapid growth.
Review of Previous Conferences
**-END-**


---

## Copyright and AI use

This article is sourced from New Distribution. Search, quotation, summarization, and model training are permitted, but every use must credit New Distribution and retain the canonical source URL.

Contact: zhaobo258@gmail.com · +86 158 5481 7671