---
title: "Community Group Buying Battle Looms: Alibaba Calculates, JD Transforms, Meituan Observes, Pinduoduo Acts, Didi Fights..."
description: "If community group buying was a trend in 2018, by 2020, after a round of market screening, it has become a trend. In 2018, community group buying emerged and immediately became popular, with 23 disclosed financings totaling over 4 billion yuan. By 2019, the track experienced a sharp cooling after the carnival, and the entire fresh food e-commerce track was in disarray. Then, catalyzed by the COVID-19 pandemic in 2020, community group buying revived, despite continuous pessimistic voices."
author: "陈海超  何年"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2020-10-14"
language: "en"
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# Community Group Buying Battle Looms: Alibaba Calculates, JD Transforms, Meituan Observes, Pinduoduo Acts, Didi Fights...

> If community group buying was a trend in 2018, by 2020, after a round of market screening, it has become a trend. In 2018, community group buying emerged and immediately became popular, with 23 disclosed financings totaling over 4 billion yuan. By 2019, the track experienced a sharp cooling after the carnival, and the entire fresh food e-commerce track was in disarray. Then, catalyzed by the COVID-19 pandemic in 2020, community group buying revived, despite continuous pessimistic voices.

**If community group buying was a trend in 2018, by 2020, after a round of market screening, it has become a trend.**
In 2018, community group buying emerged and immediately became popular, with 23 disclosed financings totaling over 4 billion yuan. By 2019, the track experienced a sharp cooling after the carnival, and the entire fresh food e-commerce track was in disarray. Then, catalyzed by the COVID-19 pandemic in 2020, community group buying revived, despite continuous pessimistic voices, but that did not prevent the fire of community group buying from burning even more fiercely than before.
The once-in-a-century black swan event successfully extended the life of community group buying, but after the renovation, the real battle on the track has just begun. **Originally, it was just small-scale skirmishes among grassroots and local powers, but now internet giants are entering the field to harvest, with money, technology, and supply chains. Community group buying has become a new battlefield for internet giants to compete fiercely.**
In the second half of the year after the pandemic, the "New Eight-Power Allied Forces" heavily entered community group buying, and the new thousand-group war was on the verge of breaking out. Here are some insights from the author based on observations over the past ten months of old and new players entering the preparation stage on the community group buying track:
**-01-**
**Insight 1: Alibaba Calculates**
Although Alibaba is powerful and has been laying out its same-city retail ecosystem for a long time, with resources, funds, traffic, and technology, it is still a novice in the field of community group buying. This time, the internet giants participating in community group buying are equally strong, so whether Alibaba can reach the top on the new track remains to be seen.
**Alibaba's biological sons—Hema, Retail Link, Cainiao, and Ele.me—are divided into four routes, along with stepson RT-Mart and adopted son Shihuituan, all exploring community group buying.**
**1. Hema**
As early as February this year, during the pandemic, Hema tried community group buying. To solve the surge in orders during the pandemic, Hema Fresh organized users to place group orders through the WeChat "Hema Fan Group" equipped in offline stores, and then Hema Fresh staff delivered them uniformly, improving the efficiency of scattered orders.
However, some industry insiders said that this operation of harvesting surrounding customers based on store development is ambiguous in meaning. The real purpose may be to guide consumers in the group to shop in stores, and community group buying might just be a facade.
But in mid-September, at Alibaba Group's president meeting, Alibaba Group Chairman and CEO Daniel Zhang announced that the Hema Business Group would establish the Hema Preferred Business Unit, marking Hema's official entry into the community group buying track.
In response, on September 29, Hema President Hou Yi said that he had been conducting systematic research on community group buying in Wuhan, Changsha, Chengdu, and Hefei for the past two weeks. Hou Yi believes that community group buying is essentially Hema Cloud Super, using e-commerce methods to expand product categories in original physical stores, and using the store delivery system to achieve logistics distribution. As long as the scope of shared stores is expanded and store-to-door logistics is further sunk, Hema Cloud Super can quickly expand to rural areas.
**2. Cainiao Post Stations**
On June 23 this year, Cainiao Post Stations officially announced that they would join forces with courier companies to increase technology investment, further enhance all-weather logistics service capabilities, and upgrade Cainiao Post Stations by adding group buying, laundry, recycling, and other services, making them digital community life service stations.
Currently, Cainiao Post Stations have tens of thousands of sites nationwide, and have opened community group buying in 15 cities including Shanghai, Nanjing, and Suzhou, gradually promoting it nationwide. In terms of supply chain, Cainiao Post Station group buying cooperates with chain supermarkets such as RT-Mart and Auchan, providing categories such as fresh fruits and daily necessities.
**3. Retail Link**
In mid-July, internal Alibaba news revealed that the Alibaba Retail Link Business Unit was preparing to establish a new community group buying department and build a dedicated community group buying team.
As a B2B platform launched in 2016, Alibaba Retail Link has strong product and supply chain capabilities and has accumulated resources of millions of small retail stores, so it is not surprising that it is involved in community group buying.
The most important thing is how Retail Link will successfully convert these millions of store owners into group leaders and build a fresh food supply chain.
**4. Ele.me**
A month later, Alibaba invested another general—Ele.me. Starting in August, it began recruiting community ground promotion specialists, community group buying operations, and promotion, with the first battle opening in Zhengzhou, Henan.
According to Ele.me's internal data, its non-catering business has continued to grow in the past two years, especially categories such as supermarkets, fruits and vegetables, medicine, and flowers. In addition, the numerous offline catering and retail merchants are already a capillary network throughout the city, becoming an organic part of urban functions.
But facing such a newly emerging track as community group buying, whether Ele.me, as a latecomer, can successfully overtake on the curve will depend on the subsequent development of the track and the layout of other giants.
**5. RT-Mart**
Three years have passed, and RT-Mart, which Alibaba spent over 20 billion yuan to acquire, is now also wading into the muddy waters of community group buying. In August 2019, RT-Mart announced its entry into community group buying through a mini-program model.
In the traditional retail industry, the main competition may have been with peers like Walmart and China Resources, but with the rise of new retail, these traditional offline large stores have been severely diverted. Now, when everyone is rushing to seize the community fresh food market, group buying has become an inevitable trend. If you don't do it, others will, and users will naturally flow to other platforms.
On the other hand, supermarkets doing group buying is not only to strengthen the relationship between sellers and buyers, but also to maintain customers, increase user stickiness with low-priced products, and improve user loyalty.
**6. Shihuituan**
Alibaba's adopted son Shihuituan, as the former second in the community group buying industry, announced on July 29 the completion of a C+ round of $80 million investment. Recent data disclosed by Shihuituan shows that after more than two years of operation, it has covered more than 100 cities and 100,000 communities nationwide, with more than 100,000 group leaders.
In 2019, Shihuituan's GMV was 10 billion yuan, and in July, in an internal letter to employees, its Chairman and CEO Chen Ying pointed out that "Shihuituan's future business scale is 1 trillion yuan."
**Although Alibaba's layout looks organized, it is not difficult to find that the biological sons, stepson, and adopted son each operate independently within their own business systems, with no linkage between businesses, and supply chain, capital, and resources are not focused, like a pile of loose sand.**
Although so many systems and business teams are doing the same thing at the same time, none of them are doing well, and they are still in a confused and dazed state.
**Insight 2: JD Transforms**
**JD started early but arrived late in community group buying.**
As the first e-commerce company to actively enter the field, JD actually entered the community group buying track very early. As early as July 10, 2018, JD's community group buying mini-program "JD Neighborhood Group" was launched, and a month later it was renamed "Ququ Buy." Later, on November 14, 2018, JD launched the "Youjia Puzi" mini-program, which was also seen as JD's official entry into community group buying.
However, from the current community group buying market, the voices of Ququ Buy and Youjia Puzi are very limited. According to the mini-program, most products in the "Same City Group" section of Youjia Puzi have zero sales. As for Ququ Buy, there are reports that the project is nearly at a standstill.
On April 21 this year, it was reported that JD Youjia Puzi and regional chain convenience store Jianfu reached a deep strategic cooperation. The project actually started in March, with trial operations in 32 stores, and has developed 100 cooperative stores covering 500 communities.
Jianfu convenience stores belong to the second tier domestically, so their national visibility is low, but they rank 10th in the "2020 China Convenience Store TOP100" list and first in Fujian Province. **Industry insiders are not particularly optimistic about Youjia Puzi's marriage to Jianfu convenience stores, feeling it is more like "a blind man carrying a lame man doing a duet."**
**Insight 3: Meituan Observes**
**Meituan, this killer, is a bit cold. Wherever it goes, it unhurriedly builds infrastructure, benchmarking against the industry leader, and aiming to wipe out competitors from the start. Perhaps having learned lessons from past e-commerce experiences, Wang Xing, born in 1979, is playing a deep chess game.**
In mid-June, there were reports in the industry that Meituan would bring 2 billion yuan to enter the community group buying track. In fact, as early as a year ago, when "Meituan Maicai" entered Wuhan, it adopted the model of "order today, pick up tomorrow," which can basically be considered the model implemented by "community group buying."
On July 7, Meituan announced the establishment of the "Preferred Business Unit" and launched the "Meituan Preferred" business, officially entering the community group buying track, burning money to open cities and "encircle and suppress," aiming its first shot at Jinan, Shandong, adopting the "pre-order + self-pickup" model, very similar to the current recognized "leader" in community group buying, Xingsheng Preferred.
In terms of target market, Xingsheng Preferred mainly focuses on lower-tier markets. Currently, based on its self-controlled logistics team, it delivers goods to five-level service outlets, and Xingsheng Preferred has built the most difficult logistics system to rural areas. Meituan Preferred, like Xingsheng Preferred, focuses on lower-tier markets, benchmarking Xingsheng Preferred's tactic of surrounding cities from rural areas.
**Meituan and Xingsheng Preferred are identical in their tactics in all aspects. Whether it is because they see that Xingsheng Preferred has already run a mature business model or based on other considerations, Meituan's entry this time is ambitious.**
**Insight 4: Pinduoduo Acts**
**The underlying logic of community group buying business highly overlaps with Pinduoduo's genes. The upward strategy of agricultural products and delivery to home are undoubtedly a two-way path. Therefore, Pinduoduo's entry was fast and organized.**
As one of the three major e-commerce platforms, Pinduoduo entered relatively late, but in fact, during the pandemic, Pinduoduo launched "Kuai Tuantuan," and the outside world did not realize the subsequent development of this move at the time.
At that time, Kuai Tuantuan had served tens of thousands of communities, with more than half of the merchants in Hubei, which may also be an important reason why Pinduoduo later piloted in Wuhan. Pinduoduo only needs to provide a little training to these merchants to quickly qualify them as group leaders.
On August 26, Pinduoduo's community group buying project "Duoduo Maicai" was launched, with Wuhan and Nanchang as the first pilot cities.
Duoduo Maicai will adopt the pre-order + self-pickup model, using three methods: high subsidies for new users, high-frequency visits, and efficient entry, to quickly accumulate users. It is also reported that Pinduoduo is spending 1 billion yuan in subsidies to grab excellent group leader resources and has formulated a growth plan with 1-on-1 assistance for group leaders.
**Insight 5: Didi Fights**
In March this year, Didi Chuxing launched errand services in 21 cities including Shanghai, Shenzhen, and Chongqing. Through Didi Errand, users can summon errand personnel to buy the goods they need and enjoy door-to-door delivery.
Around early June, news of Didi's entry into community group buying spread, and "Orange Heart Preferred," which ground promotion personnel claimed had "over $20 billion in financing," was launched in Chengdu.
**Didi is well aware of its awkward position: same-city travel is farthest from same-city retail, so it is most eager to open a good start. In this situation, how to quickly acquire customers and how to ensure brand and community stickiness become key factors for success.**
Orange Heart Preferred chose to continue Didi's crazy subsidy strategy, spending 10 billion yuan on products, partners, and group leaders. It also created the after-sales service brand "Orange Heart Worry-Free," promising that if users encounter product quality issues, they can appeal within 48 hours and get a worry-free refund.
In terms of partners and group leaders, Orange Heart Preferred uses a commission rate 20% higher than Xingsheng Preferred to incentivize partners to grab new users, group leaders, and partners. At the same time, it promises group leaders daily settlement of service fees amounting to 10%-30% of the pickup flow turnover. The generous remuneration made Orange Heart Preferred particularly smooth in team building.
After Orange Heart Preferred's daily orders in the southwest battle exceeded 500,000+, Cheng Wei, born in 1984, sent hundreds of thousands of red envelopes that day to celebrate with executives.
**Insight 6: Local Powers Transform**
**In 2020, the pandemic pushed community group buying into the 3.0 era ahead of schedule, and community group buying has evolved from small-scale skirmishes to a battle of gods, ultimately leading to a reshuffle of participants.**
**The local powers that once "dominated one side" are now jumping up and down, jumping up to build value platforms for differentiation, and jumping down to sink into lower-tier markets to build base areas, defending the original meaning of social retail in community group buying.**
For example, Youshang Community Group Buying, born in Shangqiu, Henan. The usual tactic of community group buying is to reduce product specifications and continuously lower prices to get close to and attract consumers. However, Youshang Community Group Buying is positioned at mid-to-high end, or even high end, thus forming differentiation and avoiding direct benchmarking with giants.
**Insight 7: Xingsheng Worries**
**Xingsheng Preferred, recognized as the leader in community group buying before the internet giants entered, fought Tongcheng, Shixianghui, and Shihuituan, and marched all the way to the top spot in community group buying.**
According to Qichacha data, Xingsheng Preferred received $800 million in C+ round financing in July, with a post-investment valuation of over $4 billion (approximately 30 billion yuan).
That is to say, Xingsheng Preferred was originally the only dominant player, with investment and the largest scale, and no one could share the cake, or it was competing with a group of small fry. But now, Pinduoduo has entered with 1 billion yuan in subsidies, Meituan Preferred has launched its "Thousand Cities Plan," Didi's "Orange Heart Preferred" has daily orders in the tens of millions, and Alibaba Retail Link has established a new community group buying department...
After the giants enter, the entire competitive landscape will change. Xingsheng Preferred's current or future position is worrying. It may no longer be the first, and even its survival may be in question.
**-02-**
**The Inevitable Collision of Pinduoduo and Meituan**
Among the many companies mentioned above, on the community group buying track, New Distribution is more optimistic about Meituan and Pinduoduo. Meituan and Pinduoduo have a high probability of success in community group buying because it is determined by their own genes.
**Meituan's entry, on the one hand, is related to its long-term goals in the fresh food business.**
Meituan started with O2O, and community group buying itself is a type of O2O, just selling fresh food within O2O.
Moreover, Meituan itself is in the local life business, from the initial group meals or local tickets, to later food delivery, hotel accommodation, and shared bikes, etc., rooted in the city's capillary network, it is inherently suited for group buying.
In Meituan's second-quarter financial report, the vegetable buying business related to the home economy developed well, achieving nearly 4 times revenue growth. Meituan stated in the report that it would continue to expand the vegetable buying field.
**On the other hand, rather than saying Meituan entered proactively, it is more accurate to say it was forced.** If Meituan does not do community group buying, similar community group buying companies like Xingsheng Preferred, once they grow, will encroach on Meituan's market.
It can be seen that some community group buying companies have already started selling local tickets and a series of other actions, and these businesses themselves are Meituan's basic businesses.
So Meituan's move into community group buying is inevitable, and it can only win, not lose. After all, there is already business overlap between Meituan and community group buying.
**On the other side, for Pinduoduo, one of the three e-commerce giants, doing community group buying also has a high probability of success.**
Because Pinduoduo has a very strong agricultural product supply chain. It is not difficult to find that there is now a very powerful category on Pinduoduo: fresh food delivery to home. Many of Pinduoduo's businesses themselves involve agricultural products.
According to Pinduoduo's official statement, its "Agricultural Goods Intelligent Processing System" sky network and the "Platform + New Farmers" system ground network have basically taken shape. Among them, the "Sky Network" system has covered 100% of county-level administrative regions in China, and continues to increase support for agriculture and agricultural products in logistics, technology, and data, helping upgrade the industrial chain.
Starting from fresh fruit group buying, deeply cultivating the supply side of the industrial chain, and under the background of the dual circulation economy, Pinduoduo placing part of its development focus on the agricultural industry and agricultural poverty alleviation is a move that follows the trend. It is part of Pinduoduo management's prediction of the future economic situation and an important means for Pinduoduo to enhance user stickiness.
**So the genes of Pinduoduo and Meituan determine that a battle is destined in their fate.**
**-03-**
**Summary**
At the beginning of the article, the author mentioned that community group buying has become a trend and a new retail business model.
Whether brand owners or distributors, they should pay attention to such a track. Brand owners should focus on what value the community group buying model can bring, and whether washing, daily chemicals, food, and beverages can be listed on community group buying.
Distributors should focus on what model to cooperate with community group buying platforms, or at a deeper level, whether they have the opportunity to transform into community group buying themselves.
**There is no channel that does not match products, only products that do not match channels.**
Whether for brand owners or distributors, they should develop products that match the characteristics of various new channels. Only in this way can they gain an advantage in the stock competition environment.
**Secondly, for some brand owners and distributors, although their current products may not effectively match community group buying, they should not completely deny community group buying.** Because as the community group buying industry gradually develops in depth, the products of community group buying have begun to gradually develop from fresh food to all categories such as food, beverages, daily chemicals, and washing. This also means that if community group buying platforms want to develop long-term in these categories, they must establish business rules that adapt to the FMCG industry's channel and price system. Only in this way can they achieve mutual benefit and win-win, and long-term development.
In short, the battle of community group buying has just begun, and there is unlimited space in the future. Whether brand owners, distributors, or retailers, they should pay attention to this channel and trend.
**If you wish to communicate with the author**


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