Negative public opinion about community group buying has been escalating, reaching a climax recently. On December 11, People's Daily commented, criticizing internet giants for entering community group buying, saying they "only care about the traffic of a few cabbages and a few pounds of fruit." At the same time, a document from the Politburo meeting emphasized "strengthening anti-monopoly efforts and preventing the disorderly expansion of capital." On December 12, rumors about Alibaba, Meituan, and Pinduoduo "being announced" to exit community group buying appeared on the internet, but were later denied by the three internet giants that evening. Waves of condemnation against community group buying have swept the internet. -01- Capital frenzy triggers social anger Community group buying uses capital subsidies, with tactics like "9 cents for 9 eggs," to grab traffic and transactions, which is the most criticized aspect. A one-yuan loss from capital can leverage more than ten times the transactions and cause a hundred times the market turmoil. In many regions with fierce competition in community group buying, this is already a reality. For FMCG standard products, it is common for businesses without pricing power or first-tier distributor prices to see a 30% decline in sales. The most severely impacted are the second-tier FMCG distributors, whose business has been halved this year, or even forced them to exit the industry entirely. Brand owners have long wished to "eliminate second-tier distributors," but unexpectedly, some regions have seen this achieved by community group buying. The reasons are partly due to the pandemic and partly due to community group buying. Capital has harvested traffic through strategic losses, but the entire offline market is in turmoil and anger is rising. New Distribution recently published several articles on "community group buying," and among the hundreds of comments in the background, a large portion were negative and emotional. This emotion, even anger, is understandable for anyone. No one is willing to be replaced, and no one is willing to become dust of history. Former craftsmen and carriage drivers angrily smashed machines and cars. In the past, the Qing Dynasty blocked Western "clever tricks," which brought a century of humiliation. We can certainly be angry, criticize, and even appeal. But we should also ask ourselves: change has already happened; can we go back to the past? Especially for our distributors, what is more important than anger?! -02- Throw away anger and ask yourself three questions First question: Will internet technology and capital stop their offensive and transformation? No. The marriage of internet technology and capital, which "doesn't follow martial ethics" or business logic, has transformed and attacked various industries; this is not the first time. In the offline FMCG market, from O2O to B2B, to today's community group buying. This is at least the third offensive launched by the internet. Once such a transformation begins, it will never stop. Second question: Apart from subsidies, does community group buying have industrial value? Community group buying has been around for several years, and New Distribution is also the earliest professional media to continuously report on it. There are giants like Xingsheng Youxuan with tens of billions in scale, and more regional small platforms like Youle Tuan. Many distributors have also incubated small community group buying platforms and done well. As a business model, community group buying has proven its commercial viability through profitability. At the same time, it has also proven its advancement and industrial value in certain channels. This will not change because of the giants' behavior. Third question: Will anger help our distribution business? Before community group buying appeared, wasn't there competition or even vicious competition? There was KA hegemony and fierce competition among peers, but we survived in the end. Did anger help us win? No! The adult world only talks about winning and losing; the children's world talks about right and wrong. Business clearly belongs to the adult world. "Success or failure" is a fact, a result, and objective; "right or wrong" is an opinion, a stance, and subjective. Therefore, "success or failure" can be used to judge heroes, but "right or wrong" cannot. In the midst of the "verbal attack," distributors should not be swayed by emotions and forget our company's mission and responsibilities. Isn't doing well for our company our "sea of stars"? Isn't it just competition? Isn't it just change? Haven't we been through competition and change every day these years? What is there to fear about today's changes? If you have calmed down and are ready to read patiently, that is what we hope for. -03- Community group buying: you may not embrace it, but you must shake hands As mentioned earlier, it is certain that community group buying will continue to exist and develop. At the same time, community group buying will also undergo many unknown but important changes. Calmly paying attention to and studying these changes, finding opportunities, and adjusting ourselves is what we should do most. Every business transformation is a reshuffling of commercial forces. Every winter, some birds freeze to death; we should try not to become one of them. Distributors as a group still exist and are active today. But less than 10% of those from ten years ago are still alive today. How do you know that in the next ten years, you will still be the one alive? Trends always change, and those at the forefront change with each generation. We sincerely hope that every reader of New Distribution can always stand at the forefront. Therefore, we have been continuously conveying and interpreting new business knowledge, discovering and sharing the wisdom and experience of pioneers. At the same time, we organize those who love learning to visit the territories of pioneers for in-depth exchanges and hands-on experience. When new business forces rise, we also encourage readers to pay close attention and actively try, provided they are cautious. Facing the rise of community group buying, our basic attitude is: you may not embrace it, but you must shake hands. Embracing often represents an ALL-IN attitude, which lacks defense and carries significant risk. Shaking hands represents recognition, proactive contact, and establishing relations, which is a positive attitude. But whether to cooperate, and how to cooperate, still needs specific discussion, or even fight first and then talk, or talk while fighting. Uni-President Group, facing new retail channels, once formulated a 16-character policy for cooperation: "Harmony without conformity, fight without breaking; focus on ourselves, each takes what they need." For the sake of business, we must "shake hands" with community group buying, and do it immediately, right now. How to shake hands? New Distribution will soon launch intensive live discussions and professional analyses on community group buying, and will build a platform for communication, exchange, and cooperation between brand owners, distributors, and community group buying platforms. Starting today, we will lead everyone to pay attention to, discuss, and study the following issues:
What is the basic model of community group buying? What changes will occur? What will the future player landscape look like? Will giants give up community group buying after being "severely criticized"? Will giants change their approach of participating directly? Will community group buying evolve into a war of "giant agents"? What opportunities will community group buying bring to whom? What strategies and tactics should distributors and brand owners use to deal with community group buying? Are there distributors or brand owners who have benefited from cooperation with community group buying? Can their experiences be shared and referenced? To delve into these issues, at 8 PM tonight, New Distribution has specially invited Fan Guangchao, founder of the community group buying platform Duomi Life; Li Bingyuan, a second-generation distributor entrepreneur and founder of Youle Tuan; and Gao Jingjing, founder of Beijing Guoyingjian Trading Co., Ltd., to analyze the future development trends of the industry. Everyone is welcome to click the mini-program to subscribe or scan the poster QR code to stay tuned. Tips will be paid 400-2000 yuan once adopted.