Amid the pandemic, community group buying has once again become a focus of attention. While leading platforms like Xingsheng Youxuan, Shihuituan, and Shixianghui are expanding aggressively nationwide, this business model, which originated in 2018, is also attracting increasing attention from brand owners, distributors, and retailers.

So we see that both retail enterprises such as Better Life, RT-Mart, and Meiyijia, as well as traditional FMCG brands, are starting to invest in community group buying, launching community partner programs. For these companies, establishing community group buying not only builds online sales channels and efficiently reaches consumers, but also serves as an important measure to improve sales channel layout, conduct omnichannel marketing, and achieve full-channel coverage.

But for distributors, is community group buying also a good business?

-01- Is Community Group Buying a Good Business for Distributors?

Community group buying is a shopping scenario that uses social communities as the primary retail window, with delivery to pickup points and self-pickup as the main logistics methods, focusing on planned and high-frequency household consumer goods. It is an O2O model where consumers place orders on mini-programs via WeChat groups and pick up goods at fixed points managed by group leaders.

Compared to traditional offline retail, community group buying responds faster. After consumers place orders, it easily creates a "bystander" mechanism within the community, prompting users to place orders collectively. Moreover, since all users are in one community, if the platform or group leaders provide poor service, it can easily affect the reputation of the leader and the platform, thereby impacting the community's sustainable development. This forces group leaders to provide high-quality service and guaranteed products.

For distributors, transitioning to community group buying can not only diversify their sales channels, directly intercept traffic from consumers, serve consumers directly, and resist the impact of growing e-commerce platforms like JD.com and Taobao, but more importantly, it can also provide more diverse services to retail stores, enhance store loyalty, and create additional business growth.

Furthermore, distributors are rooted in regional markets, have good connections and abundant retail store resources, making them well-suited to develop group leaders. Additionally, distributors already have mature supply chains and warehousing and distribution systems, and community group buying can help share existing warehousing and distribution costs, thereby gaining more business opportunities.

In summary, community group buying is clearly a good business, but why do most distributors fail at it?

-02- Why Is It So Difficult for Distributors to Do Community Group Buying?

Before answering this question, let's look at the characteristics of platforms that are currently doing well in community group buying:

  1. Have a background in the fresh food industry and understand fresh food supply chains;
  2. Have strong community operations capabilities, such as a background in micro-commerce;
  3. Have offline stores and strong supply chain organization capabilities, such as Furong Xingcheng and Better Life.

If a platform has any one of these three characteristics, the chances of success in community group buying are greatly increased. Based on this, we can also judge why most distributors find it difficult to do well in community group buying.

1. Lack of Fresh and Frozen Category Management Capability

"No fresh food, no community." As the lifeblood of community group buying, the ability to handle fresh food categories determines the success of the platform to a certain extent. In contrast, most traditional distributors primarily deal in alcoholic beverages and drinks. The limitations of their product categories mean they lack the low-temperature warehousing and cold-chain transportation capabilities needed for fresh vegetables and low-temperature refrigerated foods. Once warehousing and distribution infrastructure falls short, fresh and frozen products are prone to quality issues.

Moreover, most distributors also lack the ability to source fresh products directly from the source, resulting in a lack of differentiation in fresh products when they start community group buying, making them less attractive to consumers. Over time, user stickiness will inevitably decline.

2. Lack of Community Operations Capability

In the FMCG distribution chain, distributors are responsible for warehousing, distribution, capital advances, and market services. This means that most distributors only have the capability to serve retail stores, lacking the ability to serve and operate for consumers, and are even less able to provide community operations training for group leaders. The lack of operational capability directly leads to low community activity and low consumer participation in group buying.

3. Lack of Supply Chain Organization Capability

The daily group-buying model requires platforms to have a sufficient product library and strong product selection capabilities, to select good products and help community users find novel, high-cost-performance items. This requires distributors to establish a professional procurement team to source products, ensuring the platform's product appeal and enhancing community consumer stickiness. However, currently, most distributors do not have such professional procurement capabilities.

Additionally, professional system tools are also crucial for distributors transitioning to community group buying. Though small, a community group buying platform requires comprehensive capabilities: handling peak order volumes, upstream supply chain systems, supplier onboarding, drop-shipping and centralized procurement inventory checks, midstream marketing and promotions, commission distribution for different levels of group leaders, logistics and route planning, downstream order verification and after-sales service—all of which affect whether distributors can successfully transition.

-03- How Can Distributors Transition to Community Group Buying?

Since it is so difficult for distributors to do community group buying, does that mean they cannot transition? The answer is clearly no. Joining a platform or partnering with community group buying software service providers can be an excellent way for distributors to transition. For example, Beijing Shangpin Yingjia Technology Co., Ltd. recently launched the Tangdou Cloud Store system specifically for distributors. Compared to general community group buying software, the advantages of the Tangdou Cloud Store system are mainly reflected in the following aspects:

1. Software Technology Advantages

Tangdou Cloud Store is a community e-commerce service platform launched by Beijing Shangpin Yingjia Technology Co., Ltd., focusing on providing system services for FMCG distributors upgrading to community e-commerce. With an eight-year professional internet technology team, it provides distributors with a regionally exclusive community e-commerce service platform, and builds a comprehensive convenience life service system centered on the community, covering food, drink, entertainment, and more.

2. Supply Chain Advantages

Unlike other software systems that only provide technical services, the Tangdou community e-commerce system also provides distributors with a complete set of supply chain support solutions, addressing the concerns of distributors transitioning to community group buying.

The company has established long-term strategic partnerships with groups such as Sanquan, CP Group, Kangda, Synear, Shuanghui, Hai Bawang, Rongshida, Konka, Midea,山水, Moutai, Luzhou Laojiao, JDB, and Qiaqia. With direct sourcing from well-known manufacturers and thousands of advantageous hot products, it creates a "1+1" product structure model for regional partners: national drop-shipping products plus regional supplier products, providing partners with a complete high-quality supply chain service system.

3. Operational Support

To address the issue of distributors not knowing how to operate community group buying, the Tangdou team has developed a standardized and systematic operations manual. It guides merchants through operations, warehousing and distribution sorting, group leader development, and community recruitment with a foolproof step-by-step operation mode, helping distributors easily manage community group buying.

4. Team Advantages

Additionally, the Tangdou team has rich e-commerce operation experience and years of FMCG industry experience. The founder of Tangdou was the founder of an e-commerce platform with a market value of 2 billion yuan. Team members come from former Fortune 500 internet company technical teams and consumer goods market operations teams, enabling them to help traditional distributors solve community e-commerce problems from an FMCG industry perspective.

Many practitioners call community group buying the "third pole" of China's retail industry, highlighting its importance. For traditional distributors, facing constantly changing consumer environments and increasingly uncertain survival and development environments, are distributor friends truly ready to embrace change?