---
title: "Community Group Buying in the Storm of Public Opinion: Precarious or Booming?"
description: "This article is based on the speech delivered by Wang Qi, President of Weijie City Distribution, at the weekly meeting of the community group buying project management on December 14. He addresses concerns about the business direction, analyzes the commercial value and controversies of community group buying, and outlines the company's expansion strategy."
author: "唯捷城配"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2020-12-16"
language: "en"
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# Community Group Buying in the Storm of Public Opinion: Precarious or Booming?

> This article is based on the speech delivered by Wang Qi, President of Weijie City Distribution, at the weekly meeting of the community group buying project management on December 14. He addresses concerns about the business direction, analyzes the commercial value and controversies of community group buying, and outlines the company's expansion strategy.

**Editor's note: This article is compiled from the speech delivered by Wang Qi, President of Weijie City Distribution, at the weekly meeting of the community group buying project management on December 14.**
Dear colleagues:
Good afternoon! First of all, I would like to thank the community business project team, especially those colleagues who are working hard on the front line. You have all worked very hard. Overall, in the first week of December, all work has improved further. Today, I will not comment on operational data or business indicators, but take this opportunity to respond to the issues that everyone is concerned about, especially the prediction of the direction of the community business.
Since the company restarted the community warehouse and distribution business in August, the colleagues who were transferred to the project team have continued to carry forward the Weijie spirit of "striving and being able to fight hard battles," which I am very touched by.
President Chen has been working on the front line day and night, setting an example and guiding project operations everywhere; General Jiheng and the Guangzhou team fought continuously for 30 hours without a moment's rest; the Jinan company completed the preparation and normal operation of the first network warehouse in three consecutive days with less than four hours of sleep per day...
Weijie people maintain a consistent professional level through hard work. Whether it is performance indicators or exception control capabilities, we are far above the customer's average level. The service quality of most projects has long ranked first, and we have repeatedly won customer praise.
Due to some controversies in public opinion regarding the community project recently, many colleagues are also concerned and have privately asked me about it. Here I will share some thoughts, and after the meeting, please be sure to fully communicate with all front-line colleagues.
**-01-**
#### **The Commercial Value of Community Group Buying**
In 2018, community group buying stood at the forefront. Because players placed extreme emphasis on speed and ignored supply chain and service experience, the industry reshuffled rapidly in 2019, and most companies died, causing us losses as well. For example, Songshu Pinpin still owes us 300,000 yuan, which can only be written off as bad debt.
But there were also excellent companies that persisted. Xingsheng Youxuan achieved a platform transaction volume of 10 billion yuan in 2019, and in 2020, it originally planned to sprint to 40 billion yuan; even if discounted, this figure is remarkable. Traditional retail enterprises cannot reach the scale of 10 billion without ten or eight years.
In the second half of the year, multiple giants entered the community group buying track with strong will and massive funds. Besides the commercial value having been verified, the COVID-19 pandemic has solidified the habit of online shopping; more importantly, the strategic opportunity lies in the fact that community group buying is evolving into a near-end e-commerce platform, which is the 3.0 e-commerce model after the 1.0 e-commerce of the PC era and the 2.0 e-commerce of mobile internet.
**Long-chain e-commerce drives the production and sales connection of high-value-added goods such as 3C, clothing, cosmetics, and some alcoholic beverages, but it cannot solve the onlineization of short-radius commodities mainly composed of FMCG and fresh produce, which occupy 75% of the large consumer market.**
**The transaction and delivery structure of near-end e-commerce platforms is significantly different from that of traditional long-chain e-commerce platforms. The model of "pre-sale + next-day delivery + self-pickup" effectively solves the loss of fresh products and greatly reduces fulfillment costs.** In the best region of Xingsheng Youxuan, the fulfillment cost per order is about 1 yuan, which is about 5% of the fulfillment cost of previous fresh e-commerce.
The near-end e-commerce platform has a huge impact on all categories. For example, in FMCG, the traditional deep distribution channel structure is complex and lengthy, and the push supply chain driven by inventory products has broken information and slow delivery. The delivery of near-end e-commerce platforms through "central warehouse + network warehouse" can reach village and town level pickup points the next day, and the efficiency improvement is astonishing.
**-02-**
#### **Analysis of Controversies Surrounding Community Group Buying**
A business model with broad and huge value has recently faced different, almost critical voices in public opinion. It should be noted that these voices do not accuse community group buying itself, but rather call for preventing unfair competition and oligopoly. Including the commentary from People's Daily, you can see that the subject is not community group buying itself, but that the tactic of using subsidies to exchange for traffic should be controlled.
The newly entered internet giants are good at using subsidies to gain traffic and using large traffic to gain a competitive advantage. In the expansion of community group buying business, this path dependence is obvious. In the short term, it has caused a certain degree of impact on offline physical retail, wholesale markets, etc. It is timely and necessary to constrain such behavior.
In addition to the impact of controlling community group buying oligarchs, there are also two potential risks:
**The first is the impact on employees of wholesale, retail, and other circulation enterprises.** I believe this impact is an inevitable path for industry restructuring. From supply and marketing cooperatives to department stores, from supermarkets to complexes, and then to e-commerce, the entire history of retail development has revolved around "cost, efficiency, and experience" for iteration. Each evolution has caused the disappearance of some positions and affected employment.
**The second is food safety. I believe this impact is the real risk.** Food is the first necessity of the people, and food safety is the well-being of the whole people. Taking the food storage and transportation link as an example, high-tier cities attach importance to policy supervision, market competition promotes management improvement and infrastructure upgrading, and physical retail enterprises can achieve full transparency and full-chain control in product traceability, cold chain storage, inspection and quarantine, temperature-controlled transportation, and other links.
Community group buying platforms currently generally focus on traffic acquisition and neglect supply chain operations, ignore quality control and logistics standards, and have obvious loopholes in food safety management; coupled with insufficient high-quality infrastructure in third- and fourth-tier cities, especially counties, towns, and villages, food safety risks are exacerbated. If the giants do not pay enough attention to this issue, it will definitely be a disaster for the entire community group buying industry.
If risk control is appropriate, the commercial and social value of community group buying is huge, which is the premise of my optimism about the development of this business.
**First, it creates a large number of new jobs.** Community group buying is still a labor-intensive business model mainly based on offline operations. Whether in transactions or delivery, it requires a large number of practitioners. In addition to group leaders, the talent market for market promotion and warehouse and distribution operations is booming, with extremely strong demand for personnel. As business scale grows, more new jobs will be created.
**Second, it accelerates consumption upgrading in lower-tier cities.** In underdeveloped low-tier areas, community group buying is a better commercial supply. The platform has rich and genuine products, eliminating counterfeit goods like "Kangshuai Master" and "Lei Bi," bringing tangible benefits to consumers and helping people create a better life.
**Finally, the pre-sale system is an epoch-making revolution for the fresh produce industry.** The planned nature of pre-sale greatly reduces agricultural product losses, expands sales channels for high-quality agriculture, effectively alleviates the phenomenon of "expensive vegetables hurting the people, cheap vegetables hurting farmers," and is also beneficial to the national targeted poverty alleviation policy, improving the level of agricultural income generation and efficiency.
**-03-**
#### **Our Expansion Strategy for the Community Group Buying Business**
**First, do not grab the limelight, do not chase speed, and continuously improve professional operational capabilities.** Even though the market is booming, we must continue to maintain strategic focus, do a good job in project selection, adhere to high service quality, and develop steadily and orderly.
**The core competitiveness of the community group buying business model mainly consists of three parts: traffic, products, and delivery, among which fulfillment experience is very important.** After the heat of competing for territory cools down, community group buying platforms will inevitably re-examine the value of professional logistics operational capabilities. Weijie must maintain a leading level of warehouse and distribution operation services for a long time, and there will be endless business in the future.
**Second, remember the essence of business, do not do loss-making business, and do not accompany giants in losing money.** Recently, colleagues in market development have reported that many competitors are aggressive and undertake projects regardless of cost. Do not be led by their rhythm. Unrestrained and unstrategic expansion is destined to become a martyr or even cannon fodder. Moving and delivering goods is hard-earned money; do not become leeks to be harvested.
**Third, pay attention to business opportunities from the transformation of physical customers.** After several years of development, Weijie's warehouse and distribution infrastructure has initially formed a three-dimensional regional service network. One of the driving forces that has supported the company through many difficulties is our belief in the value of new logistics infrastructure in driving the restructuring of commercial flows. Community group buying is a new and huge restructuring of commercial flows. A decentralized distributed trading platform requires a distributed warehouse and distribution delivery network.
In addition to existing players and giants, many offline retail enterprises and brand companies will soon enter the community group buying market. The Weijie team should leverage our customer relationship advantages and operational advantages, pay attention to customer dynamics, actively participate in their transformation and upgrading, and participate in the construction of the socialized near-end e-commerce supply chain.
This is the best strategic opportunity since the establishment of Weijie, and we must seize it. Once again, I thank all colleagues in the community group buying project for their hard work, and I look forward to you achieving better results!
Recently, temperatures have dropped in many places. Please take care of your team and stay healthy.
Source: Weijie City Distribution (ID: wjcp5566)
Tips will be paid 400-2000 yuan once adopted.


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