Community group buying has evolved from an initial sprint to a standoff among platforms. Many onlookers who missed the first wave of enthusiasm share the same question: "Is it too late to get on board now?"

-01- Group Leaders: Familiar Faces Are Pulled into Personal Groups

When community group buying first emerged, many people preferred to become platform operators, then suppliers, and then group leaders. However, with accumulated experience, the low-barrier role of group leader has become the best way to get involved in community group buying.

Recently, led by internet companies' community group buying platforms, the average commission rate for group leaders has been reduced. The initially promoted 15% has gradually become around 10%, with the lowest currently being Duoduo Maicai. According to multiple group leaders in Wuhan, the average commission for Duoduo Maicai products is around 5%.

Commissions have been cut repeatedly, while the workload continues to increase. After-sales work that originally belonged to the platform has now been transferred entirely to group leaders, including investigating product damage and handling refunds within 24 hours. This has led many group leaders to shift away from the idea of making money directly through community group buying, instead using the platform as a traffic tool, starting their own groups, or transitioning to social e-commerce group leaders.

"Becoming a star group leader may come with exclusive treatment, but it also brings many inconveniences," said a group leader from Hema Market. "You can't work with platforms other than Hema Market, and there are people watching me all the time."

It is understood that when applying to become a group leader on Hema Market, operations staff will come to your door to set up a group. When your order volume reaches a certain scale, a dedicated person will contact you to become a star group leader. They will also enter the group leader's private community groups as official representatives, partly to help promote products and improve communication and sales, and partly to prevent group leaders from posting products from other platforms in the groups.

The group leader also said, "After official staff entered my group, my influence was greatly affected. After all, I'm just a group leader, and they can represent the platform. So, to be safe, when customers come to pick up orders offline, I pull familiar faces into my personal group to sell other things."

-02- Suppliers: Selling Only Dozens of Items a Day

As a new business format, community group buying attracted widespread attention as soon as it appeared. For suppliers with products, it seemed like a sales channel that could boost business, and many flocked to it.

However, for suppliers to community group buying platforms, especially fresh produce suppliers, the biggest headache is the spoilage rate. A supplier working with both Meituan Youxuan and Duoduo Maicai told Retail and E-commerce Observation, "From our end to the central warehouse, then to the grid warehouse, and then to the group leader, products are lost at every step, and we have to bear the cost. Additionally, unsold items are returned."

Besides spoilage, delayed payment terms are also a common tactic. A supplier from a county-level city for Chengxin Youxuan told Retail and E-commerce Observation, "Platforms have two payment terms for suppliers, based on sales volume. When sales reach several hundred items, payment is made the next day. But when sales drop to a dozen or so items, payment is delayed for a week or even a month (the specific criteria vary by region)."

According to a supplier from a county-level city for Hema Market, "We stocked tens of thousands of items, full of expectations, but after the group opened, it was disappointing—only dozens of orders per day. To this day, many of the original items remain, and I think every day about how to offload them."

Another supplier for Duoduo Maicai in Shenyang said, "Because there is a high rate of product overlap among suppliers in the same area, getting on Duoduo Maicai requires bidding. Whoever offers the lowest price gets listed. This competition makes profits very thin. This raises the question: will suppliers deliberately pass off inferior goods as quality ones to maintain profits?"

All community group buying platforms, in the process of suppliers delivering goods and listing them for sale, try to push prices as low as possible, delay payments, and shift costs such as spoilage and transportation onto suppliers. Yet, despite this, many product owners still want to join community group buying.

-03- Grid Warehouses: A Box of Milk and a Box of Eggs Earn the Same

With a warehouse of a few hundred square meters, a few drivers with vans, and partners, one can become a grid warehouse partner for various community group buying platforms.

During a conversation with a Meituan Youxuan grid warehouse owner, he repeatedly hinted at wanting to sell the warehouse. The reason was that just as the grid warehouse was getting on track and about to turn a profit, Meituan Youxuan implemented a profit system reform that caught them off guard. "The profit system for grid warehouses in Meituan Youxuan nationwide will shift from per-order to per-group-point plus per-order, with a unified price of 0.35 yuan per item plus 3 yuan per group point, multiplied by 1-1.2 depending on the region."

Under the original pricing system, the number of sorters, drivers, etc., was basically fixed. But with the revised pricing system, they need to re-plan manpower allocation to avoid wasting effort, which requires another period of adjustment.

Platforms are also extremely strict in managing grid warehouses. A Xingsheng Youxuan grid warehouse owner told Retail and E-commerce Observation, "During work, I fell ill and had a relative manage the warehouse for a while. Someone reported me, and my grid warehouse qualification was revoked, with all orders transferred to other grid warehouses."

According to Retail and E-commerce Observation, currently, Duoduo Maicai's grid warehouse profit structure is based on order volume plus group points: 0.3 yuan per order and 3 yuan per group point, with a monthly guaranteed profit of 7,000 yuan and a deposit of 30,000 to 50,000 yuan. Chengxin Youxuan's grid warehouse commission is 0.85 yuan per order, with a guaranteed profit of 2,000 yuan and a deposit of 30,000 yuan. This profit is relatively high, but even so, turning a profit is still difficult.

The main investment for grid warehouses comes from labor costs. According to a grid warehouse owner in Wuhan, drivers are paid 320 yuan per trip, one trip per day. As for pricing, a box of drinks counts as one item, and a box of eggs also counts as one item, with the same commission per item, but the space they occupy can differ by more than tenfold. This means that if the platform runs a promotional discount on beverages on a certain day, the grid warehouse might lose everything.

Industry insiders revealed that platforms use certain methods to keep grid warehouses in a state where they can make money, but not much; there is some hope for the future, but it's unclear how long they'll have to wait; they are kept in a delicate balance of wanting to leave but not being willing to.

Retail and E-commerce Observation found that Hema Market listed 500g of mangoes at 4.28 yuan on the first day, and the next day the same specification was priced at 4.69 yuan; bananas priced at 2.39 yuan per 500g on the first day were 3.29 yuan the next day. Platforms attract customers with low prices, and once customers become dependent, they raise prices to increase profits.

Community group buying has long been called a "paradise for wool pickers" due to crazy subsidies, but little do they know that while they are picking wool, they have already fallen into the traps set by the platforms in advance.

Source: Retail and E-commerce Observation (ID: sqtggc)

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