Group leaders 'cheated' by algorithms. Community group buying is receding, and platforms have entered a seesaw war of attrition. Now group leaders are at a crossroads of divergent paths: on one side, imperfect platform distribution systems, unstable product quality, and chronic shortages plague group leaders, with orders generally dropping by 70-80%; on the other, user attrition is severe, and after being lured by new-user deals, few customers show willingness to repurchase. After taking away the livelihoods of small vendors, community group buying has turned its scythe on group leaders and wholesalers. Group leader commissions have been cut from 10% to 1%; drivers frequently change, jump ship, or quit; traditional wholesalers complain bitterly or even close down; and rumors of brand suppliers cutting off supply are rife. Whether to hold on or exit, each group leader has a different attitude and stance. Stay-at-home moms and WeChat business operators transform, collectively 'fleece the wool' "I've figured out the trick: community group buying is just collective wool-fleecing!" Zhang Jie, a 30-year-old stay-at-home mom living in Huilongwan, Nan'an District, said cheerfully: "At first, picking up bargains was easy; internet giants threw money around, and residents, relatives, and friends all came to grab deals. After free trials, they don't repurchase now." After speaking, Zhang Jie sighed: "Now the giants aren't spending money, and all platforms' fresh produce and groceries have risen to about the same prices as wet markets and supermarkets, and orders have dropped by 70-80%. Originally, aside from 'one-cent new-user deals and flash sales,' I had at least 100 orders a day, plus various platform rewards, earning 300-500 yuan daily in commissions, easily over 10,000 a month. Now I work all day and earn less than 100 yuan." It's learned that Zhang Jie is a stay-at-home mom who previously did WeChat business, holding four community group-buying groups with about 1,000 customers. During the pandemic, she started doing Meijia Maicai. Since the second half of last year, she successively connected with Duoduo Maicai, Chengxin Youxuan, Meituan Youxuan, Xingsheng Youxuan, and Shihui Tuan. "Zero investment, zero risk, flexible time, can take care of kids and cook, and still have income" — when asked why she initially joined community group buying, Zhang Jie said: "Besides, business developers (BDs) taught us hand-in-hand how to earn 'headcount' and 'order' rewards. If we didn't have enough customers, we'd pull in friends and family to make up the numbers, and 100-200 yuan daily rewards were guaranteed." The headcount and order bonuses Zhang Jie mentioned are the order quantity rewards and new-customer/new-group-leader rewards launched by major community group-buying platforms. Currently, major platforms have significantly raised reward standards and set dual assessment thresholds for sharing and ordering. ▲Chengxin Youxuan's order and new-group-leader reward page Zhang Jie is outgoing and provides thoughtful service, including home delivery, making her the first choice for community residents. Last year, when community group buying exploded in Chongqing, major platforms' advertising and subsidies had no limits, and her monthly commissions exceeded 10,000 yuan, plus order and new-user rewards from various platforms, sometimes reaching 20,000-30,000 yuan. Seeing her success, a dozen group leaders popped up in the community, all wanting a piece of the pie. After fresh produce and groceries rose in price, residents' order volumes dropped significantly; besides some 'flash sale' and 'traffic-driving' orders, only a few old customers remained. On June 8, she posted a group announcement telling everyone, "Meituan, Pinduoduo, and Chengxin are taking orders normally; the others are closed." She then showed a detailed list of wool-fleecing from one platform at the end of last year, saying, "As long as you have about 1,000 group members, all platforms combined can easily earn 3,000-5,000 yuan a month." Speaking of the future, she is philosophical: "Internet giants have money to burn; I'll just rely on platform subsidies!" According to Yicai's report, because platforms' desire for data surpasses everything, to get more rewards, fake orders become inevitable. Residents grab bargains, group leaders fake orders, group leaders fake orders for each other, and business developers falsify data—all are open secrets. Many group leaders launch 'cashback' activities, having customers purchase and then giving cashback, using fake orders to earn promotional rewards; under KPI pressure, business developers also collude with group leaders to fake orders, and even suppliers collude with group leaders, with suppliers recycling goods after group leaders order, complementing each other's advantages to collectively fleece the wool. Mahjong parlors, security booths, and tobacco shops: Buddhist-style persistence Yang Kun is a tobacco and alcohol shop owner, 44 years old. His shop is at the intersection diagonally opposite Huilongwan Community. Although it's only about 10 square meters, it has a prime location. Five years ago, his shop's monthly rent was less than 3,000 yuan; now it exceeds 6,000 yuan. Monthly revenue averages less than 20,000 yuan, and after deducting costs and labor, it's hard to stay afloat. "Now I survive by selling cigarettes and stay alive by selling iced water. If cigarettes can really be sold online, our days are truly numbered," Yang Kun complained: "The bulk of profits go to the landlord; physical business is tough." Regarding community group buying, he seems quite Buddhist: "Doing community group buying doesn't affect my main business of tobacco and alcohol retail and wholesale. I don't rely on it for money; I just do it on the side." He then showed his Meituan service fee income: from June 1-9, the cumulative income for 9 days was only 11.62 yuan, and the half-year cumulative income was just 124.61 yuan. Yang Kun chose Buddhist-style persistence, not even having a 'community group buying service group.' Currently, his orders come solely from Meituan and Pinduoduo's own platform traffic; other group-buying platforms were closed one after another due to insufficient orders. Also choosing to 'do it on the side' are the community security guard and the mahjong parlor on the ground floor. Security guard Huang, an elderly man, said his daily earnings now only cover two packs of cigarettes. The business developer came several times, but since he lacks cold-chain logistics conditions (refrigerator), he may be removed starting next month. The mahjong parlor owner said she only provides storage for vegetables to serve her 'mahjong friends,' and as for commissions, she said, "I can't be bothered to look; it's just one or two yuan a day." Supermarkets and convenience stores 'cheated' by algorithms "You won't believe it, but we're trapped in algorithms by so-called 'big data.' Now we suddenly find ourselves as robots working for platforms," complained Huang Ping, a community supermarket owner: "They call it a revolution, saying it subverts traditional business models. We call it dumping and unfair competition. Giants collude to manipulate market prices and take our livelihoods—it's ugly." Huang Ping's complaints have a basis. When community group buying was sweeping in, half the shops on a street were doing it; every few steps there was a pickup point. If you didn't do it, others would; if you did, at least you'd lose less. The first to be hit were offline retailers like fresh produce supermarkets and mom-and-pop convenience stores. Due to product category conflicts, they were first passively beaten, then dragged in, and finally had to become a link in the giants' business chain. Huang Ping mainly refers to the giants' below-cost dumping. The red-eyed e-commerce companies疯狂 subsidize, using below-cost or even free strategies to grab market share, instantly taking half his customers. ▲Ultra-low-priced goods on Meituan "Haitian soy sauce with a 10-yuan cost price is sold at 4.99; salt at 0.1 yuan a bag; cucumbers at 0.99 yuan a jin; a pack of Xinxiangyin tissues for 0.1 yuan; daily groceries all cheaper than our cost price. How can you compete with that?" Huang Ping got emotional: "They can afford to lose money, but we can't hold out. In fair competition, who's afraid of whom? But we can only be beaten passively. Now I fear most that the giants will join forces to monopolize; if they succeed, we're doomed." According to statistics, in 2020, China had over 6.3 million offline retail small shops. These small, individually owned businesses serve over 200 million consumers daily. If these mom-and-pop shops can't sustain themselves, it won't just affect hundreds of millions of people's lives but also directly endanger the employment of tens of millions of workers. Huang Ping is somewhat pessimistic: "When they've starved out the physical stores, the wholesalers, logistics, growers, and vegetable farmers on this chain will all be taken over by the giants. Then the bitter fruits of monopolistic operations will become apparent; after monopoly, they'll definitely raise prices at will. Capital comes for profit; there's no free lunch." Huang Ping's predicament resonates with convenience store owner Ms. Zhang. When community group buying first rose, due to the huge price difference and relatively guaranteed quality, with commissions of 10%-15%, she started sourcing goods from platforms to sell herself. Later, when platforms quietly launched 'group leader exclusive' deals, she simply stocked up on beverages, daily necessities, and groceries from platforms, hoarding nearly a year's supply of daily necessities at once. However, regarding fresh produce, Ms. Zhang is also not optimistic. First, it's hard to judge the authenticity of supply sources; supplier qualifications are unclear, and quality is hard to guarantee. Second, transport drivers lack cold-chain logistics conditions, and with heavy tasks and traffic jams causing delays, frozen goods often arrive at her place at nearly room temperature. "Frozen goods often come mixed with blood and water, sometimes with a nauseating smell. I can't even bear to look at them, let alone give them to customers." Platforms' role positioning and function building for group leaders are too instrumental, with value return mainly being commission points. Decreasing income demotivates group leaders from promoting. Currently, major platforms have launched WeChat accounts named 'Robot' or 'Group Leader Assistant.' After group leaders connect, they automatically share product links in groups at set times, supposedly to 'lighten the burden' on group leaders, but in reality, it's part of the platforms' 'de-group-leader-ization' strategy. The sudden significant reduction in commission rates angered her: "This is burning the bridge after crossing the river and killing the donkey after it's done its work. We worked hard to build up the platforms, and now they turn their backs on us." Ms. Zhang showed us her 'Duoduo Maicai' order income details: on May 30, her cumulative sales were about 183 yuan, but her actual income was only about 8 yuan, less than 5% commission. She said that's still good; at the end of May, a customer bought three boxes of milk for a total of 148.5 yuan, with a commission of only 1%, meaning she got less than 1.5 yuan. "We all hold several platforms and several groups. Now we've kicked out their so-called 'robot assistants' and only promote whichever platform offers higher commissions. But strangely, all platforms seem to have agreed in advance to cut commissions collectively." "Price war after price war, consumers fleece the wool one after another. Let the bullets fly for a while; when they've burned through their money, it'll likely be a mess." Ms. Zhang's doubts are more evident in capital market reactions. Since Benlai Life received Series A financing in 2013, the community group buying track has seen eight years of financing. Over eight years, there were 145 financing events, with disclosed amounts exceeding 63 billion yuan. Qichacha data shows that from January to May 2021, capital retreated from community group buying, with only 8 financings in the track, including 7 from January to March and 1 in April. The most recent financing occurred on April 29, after which capital fell silent. Traditional small wholesalers complained bitterly, closed down one after another, drivers changed frequently, jumped ship, and quit in succession, leaving only head suppliers surviving. Recent reports say regulators suddenly stepped in forcefully, requiring all community group buying platforms to completely prohibit new-user acquisition at prices clearly below cost. This also means the era of giants using 'subsidies, one-cent purchases, flash sales' to exchange low prices for traffic may be ending, but mom-and-pop shops, traditional distributors, and small vendors have already been 'revolutionized.' The 'Hundred Regiments War' of community group buying is nearing its end, the industry landscape is initially emerging, and community group buying has officially entered the mid-game stage. New internet players like Pinduoduo and Meituan have initially carved out half the market by burning subsidies; old players like Xingsheng Youxuan and Shihui Tuan, as well as Alibaba, JD.com, and Didi, are in second place; additionally, express delivery companies like SF Express, ZTO, and Shentong are still fighting on the periphery. Technology for evil or for good? Food is the first necessity of the people; the common people's vegetable basket is both a livelihood and a big business. At present, community group buying funds will soon bottom out, and the entire industry may fall into a vicious cycle of "continuous burning—no profitability—continued financing" , and the trend toward a protracted war and fragmented warfare is basically irreversible. Cost and timeliness remain core factors in community group buying. If platforms blindly grab market share with low prices, they may be devoured by simple 'burning money' behavior and fall into a quagmire where they can't self-grow after capital retreats. After capital's stirring, giants don't think about value creation, only traffic opportunities, somewhat betraying society for raising them so big. The most likely outcomes are two: one, mutual attrition, leaving a mess; two, government intervention, simultaneous ceasefire, and the curtain falls. After experiencing the wars of food delivery, ride-hailing, and shared bikes, consumers seem to have opened their eyes, knowing that the end of monopoly is harvesting and price hikes. Now, it seems the community group buying supply chain hasn't been built, but group leaders collectively don't want to work anymore. China has entered an era that worships business and deeply believes technological progress will wash away all poverty, inequality, and sorrow. But while we deeply believe technology will crush inequality, have we considered waiting for those unfortunate elderly who have fallen behind and the poor底层 people, and considered social justice and fairness? As big companies grow bigger, their responsibilities should also grow. I hope social responsibility and achievements match, not just financial reports and market value. Small vendors endure the hardships of rising early and working late, eating outdoors, enduring cold and heat; they live by mundane means—electric bikes, tricycles, flatbed carts, carrying, pulling, lifting, shouldering—just to earn a meager income to barely sustain their will to live. How can you bear to snatch that away? As People's Daily commented: "(Community group buying) Don't just focus on the traffic of a few cabbages and fruits; the starry sea of technological innovation and infinite possibilities of the future are more exciting." If this era truly has dignity, it has always been among the people; if this era has warmth, it comes from the human烟火 of the wet market. Source: Kuaidao Finance (ID: kuaidaocaijing) Are you 'watching' me?