**In this melee of giants, who will be the final winner? This is the 110th day since Didi entered the community group buying battlefield, and with Meituan and Ele.me also bringing the war to their doorstep, Huang Zheng can no longer sit still. On September 10, in an office building in Nanchang, Jiangxi, the management of the 'Duoduo Maicai' project was uneasy, having been informed by Pinduoduo headquarters that their big boss, Huang Zheng, would visit Nanchang that afternoon. This marks the first time in Pinduoduo's five-year history, and less than a month after Duoduo Maicai's launch, that Huang Zheng has personally inspected grassroots operations. Local Pinduoduo employees told Tech Planet that he places great importance on Pinduoduo's first offline business. As the commander of Pinduoduo's group buying project 'Duoduo Maicai' and the 'No. 1 position' guarding the Nanchang battlefield, Pinduoduo co-founder Dong Zao reported on business progress that day and then accompanied Huang Zheng to visit Nanchang's only main warehouse. The next morning, Huang Zheng left Nanchang. Pinduoduo didn't even show up to ring the bell at its IPO in the US, so why did the 'not easily moved' Huang Zheng personally go to Nanchang? It turns out that Nanchang is one of the first pilot cities (Wuhan, Nanchang) for 'Duoduo Maicai' and also the 'base camp' for Pinduoduo's expansion. According to a source familiar with the matter who revealed to Tech Planet, one of Nanchang's original city expansion managers and some core team members were sent by Dong Zao to other regions about a week ago to implement the second batch of city opening plans. Newly appointed city expansion managers from Beijing headquarters must undergo training in Nanchang and Wuhan before taking up their posts. Moreover, some city expansion managers were poached by Pinduoduo from platforms like Ele.me and Meituan at high costs. After Huang Zheng's rare grassroots visit to Nanchang, what instructions he conveyed to senior executives like Dong Zao is unknown to outsiders, but it sends a clear signal to the outside world: Duoduo Maicai is undoubtedly Pinduoduo's key project this year. Prior to this, 'China Entrepreneur' also reported that 'Duoduo Maicai' is a first-level project for Pinduoduo in the second half of this year. Currently, 'Duoduo Maicai' has launched in 10 cities, leading Meituan, Didi, and Ele.me in the number of cities expanded. Pinduoduo, Meituan, Didi, and Ele.me, the four major internet giants, are all entering the community group buying arena, a scene quite similar to 2018. Two years ago, community group buying became a hot trend in the venture capital circle. According to incomplete statistics from Tech Planet, in the second half of 2018 alone, the community group buying track received up to 4 billion yuan in financing. But this frenzy began to cool sharply from 2019, with the fresh e-commerce track suffering heavy losses, leading to a major reshuffle after brutal growth. Songshu Pinpin fell into bankruptcy rumors, and news of Shihuituan merging with 'Niwo Nin' followed one after another. Unexpectedly, the sudden outbreak of COVID-19 in early 2020 unexpectedly 'gave a new lease of life' to the 'half-dead' community group buying, but the renewed track is no longer a situation where small and medium players try to build a fresh food empire by burning money, but has become a new battlefield for internet giants to compete fiercely. Pinduoduo enters with 1 billion in subsidies, Meituan Youxuan launches its 'Thousand Cities Plan', Didi's 'Orange Heart Youxuan' reaches hundreds of thousands of daily orders, Alibaba's Retail Link establishes a new community group buying department... The Matthew effect in the industry has already emerged. Multiple senior practitioners in community group buying told Tech Planet frankly, 'Next year will be a period of fierce competition among giants.' After capital hype, reshuffling, and silence, the 'second spring' of community group buying has been 'reawakened' by internet giants such as Meituan, Pinduoduo, Didi, and Alibaba. -01- Giants Enter the Fray Didi fights with its back against the wall, with Cheng Wei being the first to cut a gap in the 2020 community group buying battlefield. In May, in Chengdu, new business was surging. A group buying company called 'Orange Heart Youxuan', which was touted by ground promotion staff as having 'raised over $20 billion', officially established in Chengdu on the 28th of that month and entered trial operation, mainly focusing on grain and oil standard products. It was recruiting aggressively while claiming to have a mysterious big backer. Orange Heart Youxuan promotional image The supply chain of 'Orange Heart Youxuan' was built very quickly, with business development personnel and partners jointly responsible. Backed by huge subsidies, Orange Heart quickly grabbed customers with ultra-low prices and quickly made a name for itself, causing a stir in the Chengdu group buying market at the time. The surge in orders also brought it the challenge of increased transportation demand but insufficient freight logistics resources, temporarily relying on Didi drivers to fill the gap by part-time delivering goods to group buying leaders. There was much speculation about Orange Heart's background. 36Kr reported on June 16 that Orange Heart was actually invested by Didi Chuxing. Defeating Yaoyao, merging with Kuaidi, acquiring Uber China, confronting Meituan, battling Mobike... This time, Cheng Wei has brought the battlefield to community group buying. It must be said that Orange Heart Youxuan is Didi's biggest cross-industry move so far. In the view of one industry insider, Didi's foray into community group buying is more about gaining more capital favor during its IPO. 'If you want war, then war!' Didi's move into Chengdu in the southwest made Meituan change its previous low-key trial attitude. 'Meituan Youxuan' followed closely, investing 2 billion yuan, burning money to open cities and 'encircle and suppress', aiming its first shot at Jinan, Shandong, using a 'pre-order + self-pickup' model. A person close to Meituan's internal affairs told Tech Planet that Meituan Youxuan had already started preparing for the Jinan city opening from mid-to-late June. At this time, Orange Heart Youxuan had already opened two warehouses in Chengdu: Shuangliu and Longquan. The above insider explained, 'Meituan Youxuan' chose Jinan because, first, there is no dominant player locally, and it can serve as a transit hub to build strength; second, it is adjacent to Shouguang and Zhangqiu, two major vegetable towns, making supply chain construction extremely low-cost. The Meituan Youxuan team is composed of senior business development personnel from other business lines such as Mobike. There are also rumors that most of the Jinan team members came from the community group buying startup project 'Songshu Pinpin' from that year. Wang Xing's determination to capture the traffic entrance of the community group buying track is firm. Not only did he state at this year's Q2 earnings call, 'Meituan will firmly invest sufficient resources in the fresh retail sector and is very determined to win the market,' but within the following month, he twice adjusted the senior structure of the fresh business, launched the 'Thousand Cities Plan', and even placed 'Meituan Youxuan' in a prominent position on the Meituan App homepage in cities where it had already launched. With Wang Xing entering, Huang Zheng also became anxious. The underlying logic of the community group buying business highly overlaps with Pinduoduo's DNA, and the agricultural product upward strategy and home delivery are undoubtedly a two-way path. Now, Didi and Meituan's momentum to sweep across 'thousands of cities' is forcing Pinduoduo to fire the first shot in a 'self-defense counterattack'. After all, judging from the Q2 2020 financial report, Pinduoduo is having a hard time, with GMV growth halved to a record low of only 58%. Pinduoduo urgently needs a new story to tell the capital market. Pinduoduo began forming the first team for 'Duoduo Maicai' in July. In early August, the Duoduo Maicai mini-program entered trial operation, investing 1 billion in subsidies to compete for group leaders, formulating a 1V1 assistance plan, and Pinduoduo's city opening speed was exceptionally rapid. 'The first batch was Nanchang and Wuhan, the second batch was Chongqing, Xi'an, Chengdu, and prefecture-level cities in Jiangxi, Hubei, Shandong, etc.' On September 2, an anonymous insider told Tech Planet that when executing the city opening plan, only Nanchang and Wuhan had launched business, but by the 15th, less than two weeks later, Duoduo Maicai had launched in 10 cities. 'They are all model cities; just copy the model directly, and it can cover county towns within a month.' Facing Pinduoduo's aggressive and fierce tactics, Alibaba was more stimulated by Meituan. Last month, after launching the 10 billion subsidy for food delivery, Ele.me loudly announced a head-on confrontation with Meituan, and shortly after, Meituan Youxuan landed in Jinan. Since then, Alibaba has been like a wound-up spring, frequently mobilizing resources to explore community group buying business. Following Retail Link, Cainiao Village, and Cainiao Post, Ele.me also entered community group buying using Alibaba's retail operation capabilities, choosing Zhengzhou, Henan as the first city for its group buying launch. Similar to Meituan's choice of Jinan, Zhengzhou is also a city without a dominant group buying company and with a dense population. Although the leading community group buying company Xingsheng Youxuan has a presence there, it is concentrated in county areas, giving Ele.me more room to maneuver in the central urban areas. With giants gathered, the fierce battle begins. -02- Is the Traffic Playbook a One-Trick Pony? In the new battlefield of community group buying, giants are wielding their 'traffic killer moves'. Unlike startups that need to accumulate traffic from scratch, the four giants—Didi, Meituan, Pinduoduo, and Ele.me—already have massive traffic. Except for Didi, which only uses WeChat mini-programs, the other three use their own apps for traffic diversion. The Meituan app directly connects to the 'Meituan Youxuan' portal; Pinduoduo has opened a dedicated 'Duoduo Maicai' channel above its 10 billion subsidy section; Ele.me connects scenarios through relevant keyword searches. It is worth noting that Ele.me's community group buying function has no independent mini-program, only the corresponding public account and app have the relevant functions. Although it can leverage the massive traffic entrance of the Ele.me app, it conflicts with the 'Fruit' portal on the 'Group Buying Discounts' page, which may lead to traffic diversion. For community group buying, group leaders are crucial. New retail expert Bao Yuezhong stated that group leaders are an important role, determining whether the platform can build a core sales system. In competing for group leaders, Pinduoduo has carried forward its usual aggressive style. It is reported that after entering Xi'an, Pinduoduo signed nearly 1,000 people from 4 local ground promotion companies, opening 500 group leaders on the first day. 'Our main target is Xingsheng Youxuan's group leaders,' an internal employee of Duoduo Maicai told Tech Planet. Tech Planet also found that when opening the Duoduo Maicai mini-program, each location point covers about 25 nearby outlets. In addition to common convenience stores, fresh supermarkets, and express stations, vegetable markets and clothing stores also serve as self-pickup points. Didi started with ground promotion, and this time doing community group buying is 'returning to old tricks.' With Chengdu as the center, it radiates outward, quickly acquiring customers through ground promotion. According to incomplete statistics, Didi's 'Orange Heart Youxuan' has over 200 business development personnel and more than 2,000 ground promoters in Sichuan. The fierce competition among platforms has also driven up the value of group leaders, and the commission rates set by platforms have become a barometer for their allegiance. Orange Heart Youxuan flexibly sets commissions based on different products, with group leader earnings ranging from 10% to 30%, and generous rewards for high-quality group leaders. Pinduoduo, in addition to the normal 10-20% commission, also sets a monthly transaction volume reward of one-thousandth to recruit group leaders and encourage them to bring in new members. Additionally, if a certain number of orders is reached within a specific time, extra rewards are available, similar to Didi's ride-hailing model. Meituan Youxuan, on the other hand, learns from Xingsheng Youxuan's 'develop new group leader distribution model' and combines it with the 'different commissions for different products' approach. Ele.me's community group buying group leader incentive policies include basic rewards, fission referral rewards, and order rush rewards. 'Meituan Youxuan's commission is relatively high in Wuhan, with an average commission of 13%, and some categories can reach 20%.' A Wuhan group leader told Tech Planet that in Wuhan, where the three giants Pinduoduo, Meituan, and Ele.me gather, local group leaders are most satisfied with Meituan Youxuan. Orange Heart Youxuan and Duoduo Maicai's high-profile low-price blitzkrieg has opened the prelude to snatching food from Ele.me's mouth. Ele.me is recruiting in Zhengzhou while also making a comeback, turning back to fight in Wuhan, directly confronting Pinduoduo and Meituan. Cainiao Post has been recruiting ground promotion specialists and community group buying operations staff in Zhengzhou and Wuhan since August. Tech Planet exclusively learned that Zhengzhou, Wuhan, and Kaifeng have launched community group buying functions on the Ele.me app. Users need to search for 'Ele.me Community Buying' to find the entrance and can choose a suitable group leader based on the distance to the self-pickup point. The WeChat public account is only officially launched in Wuhan and Kaifeng. -03- Chaos After Rapid Expansion Giants are sharpening their knives, and the community group buying track is in a state of anxiety. The short-term rapid expansion has also exposed some problems and chaos. How chaotic? Group leaders not acting as group leaders, freight drivers changing every day... Gong Shuai, owner of a fruit and fresh food store in Chongqing and a group leader for Orange Heart Youxuan, couldn't help complaining to Tech Planet, 'A customer bought meat that was rotten, and all five麒麟 melons were bad.' Since then, he never saw that customer order again. Even after being on the platform for over half a month, Gong Shuai's total orders still haven't reached 100. He is helpless, saying, 'Almost all the shop owners around me are group leaders.' Bananas at 0.99 yuan, green walnut at 1.99 yuan per jin... Various low-price explosive products are emerging in the market. 'For standard products like Coca-Cola, the gross profit is about 0.5 to 1 yuan, while non-standard products like vegetables and fruits are the main source of revenue,' a logistics supplier providing freight services for community group buying calculated an account for Tech Planet (WeChat ID: tech618), 'The money they earn each day is at most enough to pay our freight fees.' Pinduoduo's aggressive ground promotion strategy has led to uneven quality of group leaders. 'Don't place orders with me; I'm not a group leader, just helping a relative's child complete the store opening task.' Tech Planet randomly called a Xi'an 'Duoduo Maicai' group leader, who claimed to be busy managing his own vegetable shop and had no time to take orders. The reason he applied to become a group leader was, 'My relative's child is a Duoduo Maicai staff member, and registering a store earns 100 yuan.' A person close to Pinduoduo's internal affairs revealed that this kind of wool-shearing tactic is relatively common and easy to operate. 'Duoduo Maicai has very few categories, not worth sending links to WeChat groups. You can just order directly on the mini-program.' Gong Shuai's friend is a group leader for Duoduo Maicai. He told a customer who planned to join a Duoduo Maicai WeChat group, 'Duoduo Maicai has few categories and slow delivery, often not arriving on time at the specified 4 PM, so his WeChat group only posts products from a community group buying startup project.' The internet grocery shopping craze is sweeping, but not all consumers agree. 'Orange Heart Youxuan's products are indeed cheap, but there are too few portions, and they are simply impossible to grab. Moreover, the categories change too frequently every day, making it hard to repurchase,' said Sun Xiao, a resident of Chongqing, with some complaints. In this internet giant blitzkrieg, the supply chain deficiencies of Didi and Pinduoduo are becoming increasingly apparent. Most of Orange Heart Youxuan's products are low-price traffic-driving explosive items, with less than ten frozen products accounting for the bulk of gross profit. Duoduo Maicai has no meat or frozen products, and after low prices quickly drove up sales, the logistics and distribution system became overwhelmed, becoming an urgent problem for Pinduoduo. The latest self-pickup times and unstable delivery times have become a point of criticism among many group leaders. It is understood that Didi and Pinduoduo's in-store drivers are outsourced third-party delivery, cooperating with multiple logistics companies. With product selection and supply chains not fully established, everyone is fighting with red eyes, oriented towards low prices and subsidies. The community group buying track has suddenly been pulled into a fast-paced rhythm. -04- Who Will Be the Final Winner The battle is in full swing, and giant players are using all their strength to attack, invading each other's territories. Integrating during expansion, and accelerating expansion during integration. The four giant players, who originally had no intersection, are now gathered on the same track due to community group buying, engaging in close combat. Tech Planet has just learned that Didi and Pinduoduo landed in Jinan one after another a week ago, and many headhunters are poaching talent for Didi everywhere, which has made the Meituan Youxuan team, which opened its first city in Jinan, quite nervous. 'The media reports less about Didi, but its strength should not be underestimated. Didi has also started recruiting in Jingzhou, and Pinduoduo's team has already arrived in Zhengzhou.' In contrast to Didi's urgency and Pinduoduo's blitzkrieg, Wang Xing still follows the steady path to victory from the 'Thousand Group Buying War' days. Resources are not built overnight, not just by throwing money, but require time. Building a team takes time, and gaining merchant trust also takes time. In warehousing alone, Meituan has already shown an advantage. Currently, Meituan Youxuan has opened grid station franchising, a strategy closely related to its first city, Jinan. Meituan entered Xingsheng Youxuan's weak areas to understand the opponent's model. It is reported that Meituan Youxuan's grid stations benchmark against Xingsheng Youxuan's grid stations. They are transfer stations connecting the central warehouse and offline group leader self-pickup stores. Franchise teams need to deliver products purchased on the Meituan Youxuan platform to offline group leader stores. This ultimately forms a logistics and warehousing system of 'central warehouse - grid station - self-pickup point' benchmarking against Xingsheng. According to media reports, as long as grid station franchisees meet the conditions to enter, Meituan promises a guaranteed monthly sales of at least 150,000 yuan. Through guaranteed sales, franchisees' enthusiasm is stimulated, drivers are stable, group leader delivery services improve, and delivery times gradually stabilize. For Pinduoduo, its predecessor Pinhaohuo's main business was selling fresh agricultural products, and Pinduoduo's early main categories were also fresh agricultural products. The internet giants' entry into the community group buying track has touched Pinduoduo's key territory, so Huang Zheng naturally cannot take it lightly. Supply chain, operations, and warehousing and distribution are the three major difficulties of community group buying projects. For Pinduoduo, which entered logistics relatively late, warehousing and logistics distribution are its most severe challenges. In 2018, Huang Zheng said Pinduoduo would not do logistics, but by 2019, Pinduoduo began to make efforts in logistics. Although Didi is also coming on strong, the anxious Didi is somewhat like the former Lashou and Wowo Tuan. The failure of those two back then was not because Meituan did well, but because they did not focus their core strength on operating customers and users, hoping to first enclose territory through capital power and then delve into refined operations. In the 2018 community group buying boom, most startups also fell on links such as group leader operation management. Looking at Meituan, its fresh food system has formed three models: the front-warehouse model Meituan Maicai, the agency operation model Caidaquan, and the community group buying model 'Meituan Youxuan', deployed in first-tier cities, second-tier cities, and lower-tier markets respectively. Especially, some cities that originally had Meituan Maicai have abandoned front warehouses and switched to the 'Meituan Youxuan' model, accelerating Meituan's penetration into lower-tier markets. After 110 days of fierce fighting, the 2020 community group buying landscape has changed from the original 'Five Hegemons of the Spring and Autumn Period' (Xingsheng Youxuan, Shihuituan, Tongcheng Life, Shixianghui, Meijia) to a 'Three Pillars' pattern of Alibaba (Ele.me, Shihuituan), Tencent (Meituan Youxuan, Duoduo Maicai, Xingsheng Youxuan), and Didi. Industry insiders predict that the community group buying battle among giant players will reach a climax next year, and 'the best is yet to come.' Source: Tech Planet (ID: tech618), Author: Zhou Yifei Tips will be paid 400-2000 yuan upon adoption.