---
title: "Community Group Buying's Second Half: Orange Heart优选 Fights to Survive by Cutting Losses!"
description: "As the community group buying sector cools, Orange Heart优选, once a high-flying player backed by Didi, is pivoting to wholesale after its entry was removed from the Didi app. The company is cutting losses and seeking survival amid intense competition and profitability challenges."
author: "电商君"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2021-12-31"
language: "en"
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---

# Community Group Buying's Second Half: Orange Heart优选 Fights to Survive by Cutting Losses!

> As the community group buying sector cools, Orange Heart优选, once a high-flying player backed by Didi, is pivoting to wholesale after its entry was removed from the Didi app. The company is cutting losses and seeking survival amid intense competition and profitability challenges.

Source: 电商报Pro (ID: kandianshang)

## **Breaking Away from Didi, Pivoting to Wholesale**

As the clamor of low-price subsidies grabbing market share gradually fades, the situation on the community group buying track can only be described by one phrase: When the tide goes out, you see who's swimming naked.

Retreat, contraction, transformation, survival...

Among the batch of seemingly awakened naked swimmers, some players fell before dawn after exhausting all efforts, while others, having left behind their former triumphant advance, are struggling to transform, such as Orange Heart优选, which once declared "unlimited investment."

According to media reports, **yesterday, in the Didi Chuxing app, under the "Life" section of all services, the original "Orange Heart优选" entry was removed.**

**But in fact, this is only because Orange Heart优选's business is currently in the process of adjustment.**

(Before adjustment)

When the community group buying trend was booming, Orange Heart优选 was a heavyweight player that Didi had high hopes for. It officially launched as a community group buying platform in May 2020. At that time, Didi's CEO Cheng Wei even said at an internal mobilization meeting: "Didi's investment in Orange Heart优选 has no upper limit, and we will help it go all out to win the market's top spot."

However, the quiet removal of its entry from the Didi app is now a silent declaration:

**Group buying has cooled off, and this former head player, which once raced ahead on the track, cannot escape the fate of trudging alone amid various survival difficulties.**

A year ago, when resources were abundant, Orange Heart优选 had countless glorious moments.

For example, after Orange Heart优选 settled in Chengdu, it broke through the 500,000 daily order mark in the Sichuan-Chongqing region within just three months. Another example: during last year's Double 11, with great discounts, Orange Heart优选's national orders exceeded 7 million.

"There is no choice but victory."

Speaking of the situation at that time, as an Orange Heart优选 employee said, the speed of opening new cities was like riding a rocket, and everyone's state was as if they had been injected with chicken blood. However, who would have thought that at the end of the triumphant advance, what awaited Orange Heart优选 was not the trumpet of victory, but the many mountains to face after a rapid turn.

As the saying goes, attacking a city is easy, but defending it is hard. If one blindly pursues low prices and speed while neglecting to cultivate core advantages, when the first domino falls, no matter how many dominoes follow, they will topple in an instant.

Data shows that starting from September this year, Orange Heart优选's order volume dropped from 12 million orders to 2 million orders, and the team size was reduced from 16,000 people to 5,000 people. At the same time, Orange Heart优选's service area also shrank from 31 provinces nationwide to 9 provinces.

"Is Orange Heart优选 no longer selling vegetables?"

"Is Orange Heart优选 out of business? Why are all categories empty?"

While netizens were sighing over this wave of large-scale contraction and retreat, the weary Orange Heart优选 did not give up actively seeking transformation. According to reports, during the early community group buying business, the platform accumulated many downstream B-end users such as community mom-and-pop stores. In the stocking needs of these users and community small shops, Orange Heart优选 saw new possibilities: **wholesale.**

"The most important thing now is to survive, to have food to eat first."

According to reports, **starting from November this year, Orange Heart优选 decided to shift its focus to wholesale business and quickly incubated the platform 'Orange Wholesale' to serve transactions between retail terminals and wholesalers.**

On the platform, wholesalers are responsible for sourcing, warehousing, and delivery of goods, while the platform grants wholesalers agency rights for many brands and charges a commission of 1-2% of the total transaction value.

Can the new business solve Orange Heart优选's difficulties?

Perhaps, as one insider said, the urgent task at hand is to survive, and testing the wholesale business is just a stopgap measure forced by numerous difficulties.

## **Burning Money Cannot Solve Profitability Woes**

**Today's community group buying is no longer the explosive trend that everyone was competing for a year ago.**

Data shows that due to the impact of the pandemic, the community group buying market developed rapidly in 2020, with the market size expected to reach 72 billion yuan. In this regard, many analysts once believed that if the community group buying market continued to sink and maintain good growth momentum, the scale of China's community group buying market would be expected to reach the 100-billion-yuan level by 2022.

(Source: iiMedia Research)

However, under a series of industry reshuffles, not many winners can truly move toward the 100-billion-yuan market.

As China Merchants Securities once predicted, in 2021, losses for companies in community group buying would exceed 20 billion yuan. Amid widespread lamentation, many small, medium, and even head players found it hard to withstand the cooling winter.

After bankruptcy reorganization failed to introduce a restructuring investor, "Dailuobo," one of the earliest players in community e-commerce, officially announced closure in October this year. In July this year, "Tongcheng Shenghuo," which had gone through 8 rounds of financing and was valued at 1 billion yuan, also struggled and finally announced bankruptcy due to poor management. In the second half of this year, also due to burning money and losses, the once-high-profile Shihuituan, Meicai.com, and others faced continuous layoffs...

**Rapid rise, sharp fall, life and death, ups and downs—this is the true portrayal of the survival situation of most players in the industry.**

"The essence of community group buying is retail, not just traffic. It also depends on the supply chain and long-term user experience. In the end, it compares the advantages in experience and cost of the entire chain compared to other retail models. This is a long-distance race."

As an industry investor said, the game in community group buying is not a beachhead battle that can be won solely by burning money. The factor that determines who laughs last depends not only on the speed of the runner but also on the speed of competitors.

With the large-scale product subsidies being stopped by regulators in June this year, the previous traffic-oriented thinking of seizing the market with low prices will eventually be eliminated. All prices will return to value, and the previous "low-price competition" and "marketing competition" will inevitably turn into higher-threshold "model competition" and "supply chain competition."

## **The Second Half of Community Group Buying**

In the second half of community group buying, small and medium players are quietly exiting, while giants are still struggling to hold on.

Regarding the current situation, a reporter once learned that the several major community group buying platforms at the industry's forefront are still in a loss-making state, but without the boost of crazy capital subsidies, their gross margins and order volumes have improved.

**"Having passed the stage of crazy traffic subsidy marketing, companies are now shifting their development logic for community group buying from traffic supremacy to deep cultivation of the supply chain, that is, doing a good job in the circulation infrastructure of the chain of 'agricultural products going up, industrial products going down.'"**

As industry insiders said, not long ago, People's Daily and News Broadcast successively praised the role of fresh food e-commerce platforms such as Meituan Youxuan and Taocaicai in helping farmers. At that time, such recognition was also seen by many as a positive signal that the industry was ushering in a turning point.

In essence, the key factor that made community group buying a hot trend is not low prices, but the convenience this model brings to our lives.

It is not difficult to see that, breaking away from the previous impetuousness, the competitive pain points in the second half of community group buying lie in the improvement of infrastructure, the deep cultivation of agricultural product supply chains, and the breakthrough to more sinking and broader consumer groups.

(Source: Everbright Securities Research Institute)

Data shows that although the fresh food retail market under the community group buying model is huge, the online penetration rate is still at a low level. In the first quarter of 2021, the penetration rate of community group buying was 27%, which still has much room for growth compared to the 79% penetration rate of online shopping among Chinese residents.

**Obviously, this is a long-term business. It is difficult to determine the winner in a short-term profit and loss battle. Perhaps not leaving the table is the biggest victory for players.**

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