During the COVID-19 pandemic, community partners became popular, but we also found that most community partner systems lack a 'community' element, resembling a revival of WeChat business in FMCG with weak vitality. Of course, I've also said that during the pandemic, getting things done first is paramount. However, whether community partners have vitality depends on finding their main battlefield: the community. A partner who doesn't engage with the community isn't even a qualified WeChat business. -01- What is a community? This is the definition from Baidu Baike. Synthesizing definitions of community, one essential element stands out: a group of people geographically adjacent. Other factors are not necessary conditions. For example, 'shared language, customs, and culture' are not required. In China, there are two concepts of community. One is what we commonly call 'residential community' (xiaoqu), defined primarily by place of residence. From a commercial perspective, convenience stores are community stores, with a business radius of '5 minutes on foot.' The 'home delivery' services we talk about now, except for truly 'door-to-door' services like food delivery, mostly deliver to the community, typical community delivery. Another concept is administrative, such as the former neighborhood committees, now all renamed as communities. Administrative communities are geographically larger than commercial ones. Some now refer to social groups as 'virtual communities,' which is not unreasonable. However, this requires 'self-definition' in writing to avoid unnecessary misunderstandings. -02- The Origin of Community Social Groups The origin of community partners, to my limited knowledge, can be traced back to November 2018. At that time, Huatang organized a group of experts to visit Guizhou Tobacco Group for an experience. After the event, I, along with Teacher Fang Gang and Teacher Bao Yuezhong, sat in a small street-side tavern in Guiyang, eating sour fish soup and drinking Jiangxiaobai, brainstorming about the integration of traditional marketing and the internet. Because in the past, traditional and internet were clearly separated and didn't blend. We then proposed a point of integration between traditional business and the internet: community social groups. We were excited when this concept came up over drinks. The clash of concepts paved the way for business logic to connect. From left to right: Bao Yuezhong, Liu Chunxiong, Fang Gang, Niu Enkun From November 19-21, 2018, based on our discussions, Teacher Fang Gang published three articles: 'Four Types of Marketers: Which Space Do You Live In?', 'Where People Are, Marketing Is', and 'Community Marketing: The Battleground of Two Spaces.' In these three articles, Teacher Fang Gang proposed three viewpoints:
First, where people are, business is, and marketing is;
Second, people exist in two spaces: geographic space (community) and virtual space (social groups, networks);
Third, the corresponding combinations form four types of marketers:
1. Pure offline marketers (colloquially: distribution);
2. Pure online marketers (colloquially: traffic);
3. Offline marketers + internet (tag: new marketing);
4. Internet marketers + offline (tag: new retail). The core viewpoint Teacher Fang Gang proposed is: from the brand owner's perspective, community social groups are the main battlefield. Therefore, Teacher Fang Gang once changed his WeChat tag to 'Community New Marketing.' Because many didn't understand, he changed it back. I think Teacher Fang Gang might need to change it back again! Of course, in the second half of 2018, community group buying was already very popular. But community group buying's stance is that of a platform, typically 'internet marketers + offline.' Our discussion of community social groups (community partners) is positioned from the brand owner's perspective. In 2018, as Teacher Niu Enkun, Teacher Fang Gang, and I practiced new marketing, community social groups were the leverage point, and we tasted success. In practice, we also realized that community social groups are the necessary path to connect offline with the network space. -03- The Popularity of Community Social Groups Community social groups is a professional term, not easily spread. Although the new marketing expert community has been promoting this concept, it's still far from widespread acceptance. During the pandemic, the concept of 'community social groups,' which I planned to promote over two to three years, became widely known within a month. During the COVID-19 pandemic, the traditional 'store visit' model was hindered, but vegetables are a necessity, so two types of enterprises reacted first: one was new retail enterprises, like Hema, with apps; the other was community supermarkets, which had both stores and social groups. When traditional 'store visits' were blocked, social groups became almost the only connection point with users. Community stores connecting with users through social groups is community social groups. Community social groups already existed because WeChat is standard, and social groups do offer convenient interaction. It's just that previously, we didn't realize how significant the role of social groups could be. During the pandemic, live streaming also became popular. The new media outlet New Distribution was one of the first to start live streaming. In a live stream, I connected with Mr. Zhao Bo, founder of New Distribution, and proposed the concept of 'community social groups,' and later had a dedicated live chat about community social groups. Since 2019, while promoting new marketing, I've always used community social groups as a leverage point. In normal times, promoting this professional term is quite difficult. Tsingtao Beer was among the first enterprises to launch community partners, and I haven't verified whether it was influenced by me. Even if not inspired by me, it shows that in this special period, there's resonance on community social groups. -04- Social Group Commerce: Two Battlefields The value of social groups in new marketing, as I listed in my book 'New Marketing,' is as the basic framework of new marketing: scenario, IP, social group, and communication. The value of social groups in new marketing is not as a trading platform, but as a router connecting three spaces (offline, social groups, and network space). Social groups as a commercial trading system manifest as WeChat business (social e-commerce, private domain traffic). This is a commercial system marginalized by the mainstream. Marketing now roughly divides into three major battlefields: first, e-commerce, which in 2019 accounted for about 23.1% of total social retail sales, already close to its share limit; the rest is traditional channels (offline). As for WeChat business, its share is minimal, almost negligible in share statistics. Social group commercialization has two battlefields: one is vertical social groups; the other is community social groups. Vertical social groups are mainly suitable for niche products, based on common interests and hobbies, and commercialized on that basis. There are two ways to commercialize vertical social groups: one is WeChat business style, expressed as 'social group + social group,' and the other is 'offline + social group,' connecting three spaces. The social group commercialization of beer and liquor mainly uses this method. For example, craft beer Ubrew and Taishan Original, and liquor brand Lidu, use this method. Generally, WeChat business cannot fight positional warfare. Even though WeChat business now values offline, offline is still expressed in traditional direct sales. But the social group commercialization of craft beer and liquor can fight positional warfare. As Teacher Fang Gang said: 'Do one store well offline, do one county well online.' Community social groups might be the main battlefield in the future. Because traditional channels have the largest sales share, and offline traffic has peaked, offline channels can use social groups to connect three spaces, achieving a 'trinity' (integration of cognition, transaction, and relationship) across three spaces. This is the inevitable path for marketing. All marketing must move toward 2C. This is the convenience provided by internet tools. E-commerce and WeChat business started as 2C; traditional channels are 2B. We can't abandon traditional 2B, but we can move from 2B to 2C. This is the goal of community social groups: BC integration. At the end of 2019, in an article, I said, the social group dividend has disappeared, but social group commercialization is just beginning. Because when we talk about social group commerce, it's often WeChat business, which is the smallest segment, even marginalized. In the future, the largest segment of social group commerce will definitely be community social groups. Community social group commerce is just starting. Unexpectedly, as soon as I said that, community social groups exploded. -05- Community Partners: Don't Forget the Community Battlefield Community partners, although now a trend, I estimate the wind will weaken soon. If stay-at-home moms are now doing community partners, they'll quickly find that most FMCG categories aren't suitable. Moreover, community partners without offline support are essentially WeChat business. Don't underestimate WeChat business; its operations are highly systematized. WeChat business has explored a set of operational logic: IP + social group organization + supply chain + offline experience, which traditional brand owners can't achieve in the short term. Some categories, like well-known beer, due to higher average order value and slightly higher margins for new products, might have a period of dividend. Most FMCG community partners might not even officially operate before dissipating after the pandemic. For most FMCG industries, the key for community partners is to find the community battlefield. The community is the main battlefield for community partners. If there's a tangible store, even better. At the start of the article, I wanted to clarify the concept of community. A community is a geographic concept. Relying on community social groups to do community partnerships roughly has two paths: One path is from social groups to community (stores). Three Squirrels' offline 'alliance stores' are an example. They choose people with IP characteristics as partners because such partners have strong social group operation capabilities; then they have partners open offline stores. Three Squirrels' 'dual IP' alliance stores have both store community traffic and social group traffic. The dual traffic overlay is better than traditional offline stores and stronger than WeChat business. Especially if some partners have 2B relationships, sales will be even better. Another path is to directly choose stores with social group operation capabilities as partners. We see that many enterprises did this when selecting community partners this time. Doing it this way is right! The logic of BC integration is: offline has stock, online has increment. Increment can activate stock. In this way, the value of community social groups is: not using social groups as a trading platform, but as a communication channel. For example, Lidu's cloud store model is: strong offline system, social group communication detonation, cloud store orders, centralized delivery. Community social groups are a business model that can maximize the value of social groups. Social groups have three functions: strong social interaction, medium communication, weak transaction. Community social groups naturally connect offline and social groups, forming the following logic: offline strong relationships, deep experience; social group strong interaction, strong communication, network forms orders. So, transaction is not the strongest function of social groups. -06- Community Is Small; Vitality Depends on Density WeChat business is vertical social groups, characterized by low geographic density but large geographic span. Liquor and craft beer are hard to achieve high density in one community, but because of high average order value, high margins, strong user homogeneity, and strong customer stickiness, even with low geographic density, the large geographic span can still support social group commerce. Most well-known FMCG products have low average order value, low margins, and a lot of immediate consumption. For example, bottled water is mostly 'buy and drink immediately,' which is why FMCG has a low share on e-commerce platforms. Community social groups determine that main users are in the community, and Chinese communities are not geographically large. So, user density must be high enough. FMCG brands rarely have specialty stores because even with many SKUs, like Shuanghui, which is almost full-category in meat products and has high-frequency, high-value fresh meat, when they opened specialty stores in 1999, they still distributed 'one store per 100,000 people.' The consumption characteristics of FMCG determine that a true community partner can hardly survive on a single category or brand. If they adopt the WeChat business model, they lack the gross margin and average order value of WeChat business. Therefore, my judgment is: If community partners are truly engaging with the community, they should rely on existing terminal stores, leverage terminal stock, expand increment, activate stock with increment, and use social groups as a leverage effect. This seems to be the best model now. 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