Click to read the original text for details 01 “Oligopoly” or “Not One Left”? Shixianghui shut down, Tongcheng Life went bankrupt. Is community group buying facing a “winter is coming”? Information gradually revealed indicates that policy was just the trigger; the landmines of the problem were already buried. Is it a common industry problem or a problem specific to poorly performing platforms? Lu Dexing @ Zhidianbao Community group buying is seeking a collection of WeChat groups, A={(Group1),(Group2),(Group3),...(GroupN)}, B={(Store+Group)1,(Store+Group)2,(Store+Group)3,...(Store+Group)N}. Here, “store” represents traditional FMCG sales terminals. The divergence in community group buying lies in: cooperate with terminals or compete with them. The result is that 100% chose competition. The “no-store group + subsidies” model is too “refreshing,” like the pesticide methamidophos, which tastes sweet when drunk. The core advantage of community group buying is convenience + multi-SKU combination, but platform subsidies have turned it into cheapness. Convenience stores are indeed convenient, but they have too few SKUs. Platforms have many SKUs, but they can't match the convenience of convenience stores. The convenience + multi-SKU combination of community group buying was originally good. Early on, it followed this path. With platform intervention and capital support, it turned into a low-price focus. When policy intervenes and subsidies are no longer available, the ecosystem formed by low prices cannot sustain. Now, users without subsidies are real users. As long as a new ecosystem forms, community group buying can still work. Not only platforms can do community group buying; brand owners, distributors, and even large KAs can run their own community group buying. Community group buying is the centralized monetization of retailers' private domain traffic, and it will become one of the common retail tools in the future. Li Shaoyong @ Xiangdao Big Health Think Tank New star brands, shifting to community group buying, have ample and sustainable ammunition. Brands directly supply group leaders, and group leaders serve neighbors. Community group buying is a super dividend period for achieving new star champion brands. Li Baolin & Group Brand | New Retail Advocate In 2019, the main enterprises participating in community group buying were at the ten-million level; in 2020, at the billion level; this year, the active enterprises in community group buying are mostly industry head enterprises. Li Baolin & Group Brand | New Retail Advocate Moreover, they have all established new retail departments, operating in a nationalized and organized manner. Li Baolin & Group Brand | New Retail Advocate The collapse of Tongcheng only means that one enterprise in the community group buying track is not doing well; it cannot represent that the entire community group buying industry is not doing well. Li Baolin & Group Brand | New Retail Advocate Shixianghui closed at the end of March; its decline was evident since last year, and its impact within the circle was not significant. Chen Haichao | Social New Retail #Community Group Buying July Insight# After Tongcheng Life applied for bankruptcy and Shixianghui fully shut down, from the “Top Eight Allied Forces” to the “Seven Warring States,” first 8 into 5, then 5 into 3. This overtime elimination match will continue, but the protagonists may change at any time, just like World Cup competition. It's neither a phoenix nirvana nor a mess. Except for stakeholders, it's just entertainment for more onlookers. The entire track shows three characteristics: on one hand, involution among mainstream platforms; on the other hand, fragmentation and granulation of traffic; and on the other hand, standardization of policies and regulations and comprehensive strong supervision. The main contradiction in community group buying in 2021 is not the competition among the “Seven Warring States” like Meituan Select, Duoduo Maicai, Xing Sheng You Xuan, Ali MMC, Jingxi Pinpin, Shihuihui, and Chengxin Youxuan. The main contradiction in community group buying in 2021 is not the game between the two camps of community group buying e-commerce and physical chain group-buying new store businesses. The main contradiction in community group buying is even less the conflict between the original ecological community group buying and the capital group community e-commerce factions. The main contradiction in community group buying in 2021 is: the PK between 1 million+ group leaders and 100+ platforms, a struggle for traffic, users, and the power of benefit distribution. Li Baolin & Group Brand | New Retail Advocate After Tongcheng's collapse, community e-commerce will usher in a new situation, which can also be said to be a turning point for community group buying. This turning point will bring community e-commerce into four new periods: 1. Entering a period of strict national supervision; any innovation in price policies must be reported in advance and allow competitors to report. The administrative punishment measures for price implementation have been introduced. 2. Entering a stage of stable development; shifting from rapid development to stable development, the entire track will shift from competing for resources to competing for operations. 3. Shifting from a subsidy low-price strategy period to a quality improvement and cost reduction strategy period; now the top five have all established first-level departments for user experience improvement centers, staffed by key personnel. 4. Entering a period of brand concentration; the 8-into-5 in community e-commerce has started early. Lu Dexing @ Zhidianbao Track, elimination match, 8 into 5, 5 into 3—these are about the logical starting point. Lu Dexing @ Zhidianbao “Tongcheng fell” for two reasons: 1. There was a problem with the logic of doing this big; 2. The thing itself was not wrong, but I couldn't compete with opponents. Chen Haichao | Social New Retail: @Lu Dexing-Zhidianbao-CEO, what I mean is that three national platforms are enough; the other five are all in the elimination list. When there are too many stars in the sky, the moon is not bright; when there are too many pits on the ground, the road is not smooth. Lu Dexing @ Zhidianbao: What I mean is that unless they transform, not one will remain. Chen Siting @Lu Dexing-Zhidianbao-CEO Agreed. Chen Haichao | Social New Retail With 1 million+ group leaders and 100 million+ users, this track has already formed; this is an indisputable fact. This form is still iterating and upgrading. Lu Dexing @ Zhidianbao Xing Sheng You Xuan, which has a basic base (chain), can transform. Chen Haichao | Social New Retail His nearly 20,000 stores are all franchise stores, and they have nothing to do with group buying. It's just that the entrepreneurial team is familiar with the supply chain and the warehousing and distribution system. Lu Dexing @ Zhidianbao What is a track? A certain thing, with several players competing for superiority. Chen Haichao | Social New Retail So-called innovation is finding certainty in uncertainty. Lu Dexing @ Zhidianbao Then let's talk about innovation. A track is an investment concept: a “certain” thing that many people are doing. Lu Dexing @ Zhidianbao When an investment manager tells a fund boss, “Here a track has emerged” versus “Here is an innovation,” it's a world of difference. Li Baolin & Group Brand | New Retail Advocate The community group buying at this time is not the community group buying of the past. Now the entire track is rapidly differentiating and iterating; community e-commerce is just one dazzling star. Lu Dexing @ Zhidianbao If you think it's a track, just bet on it. Lu Dexing @ Zhidianbao If you think it's an innovation, you can wait and see. Lu Dexing @ Zhidianbao Just because big capital has entered, does it determine it's a track? Those in the game say it's a certain track; bystanders say it's an innovation with an uncertain future. 02 “Group Leaders” Forever, “Group Buying” Popularization Lemon Mood Community group buying—group buying—community e-commerce, these three words together are very subtle.

  1. Group buying is using the accumulation of purchase quantity to gain bargaining power.
  2. Community is the gathering of people, convenient for gathering together to negotiate.
  3. E-commerce relies on the high efficiency and high transparency of the internet to do business. Li Shaoyong @ Xiangdao Big Health Think Tank Community e-commerce relies on group leaders but also eliminates them; it's unkind and falls into the e-commerce traffic dilemma. Community group buying, regional operation, no scale, no e-commerce attributes, not fun, hard work. Group buying e-commerce, without community order density, product selection is confused, subsidies are unsustainable, and efficiency is low. Large platforms de-group-leaderization is highly probable; de-group-leaderized community group buying is a localized Pinduoduo. The private nature of private domain traffic determines that platforms are ultimately uncontrollable. Li Shaoyong @ Xiangdao Big Health Think Tank Golden sentence. What is the retail gross margin of a small store? When the gross margin of community group buying is lower than the gross margin of the store's own operations, will the group leader divert private domain traffic to other supply chain channels? Of course, the premise is that there is a new supply chain. Community group buying can be divided into two businesses: one is the supply chain B2B; the other is group buying for private domain traffic monetization. The combination of the two is community group buying. In the future, they may be two independent systems: one is the supply chain system, including community group wholesale, distributors, and brand owners; the supply chain supplies retailers with product selection to increase retail store gross margins; the second is public or customized group buying tools (not platforms), also chosen by retailers. When group buying becomes a common way for retailers to monetize private domain traffic, I think in the future there will be two systems. The relative controllability of private domain traffic determines that retailers will definitely maximize the benefits of private domain traffic. This is the same as platforms maximizing platform traffic benefits. The maximization of private domain traffic benefits may be divided into two stages: First stage, community group buying provides an opportunity for centralized monetization of private domain traffic. This opportunity did not exist before, and early benefits were still high; Second stage, when retailers know that private domain traffic can be centrally monetized as long as there are tools, and there will be more optional tools in the future, group leaders will not completely hand over private domain traffic to any single platform. Either they rotate among multiple platforms to maximize benefits, or they use their own tools. Now we need to study what group leaders who have already tasted the benefits of community group buying will do? Li Bingyuan The high benefits for early group leaders are a temptation, not sustainable. Platforms think that once group leaders are on the “pirate ship,” they can lower benefits, since private domain traffic has partially been converted to platform traffic. However, group leaders have a certain control over private domain traffic; if benefits are insufficient, they can transfer private domain. But transferring private domain requires a set of B2C tools. Such tools are still lacking now. Actually, tools have existed for a long time. PS: From August 24-26, 2021, the 2021 (4th) China FMCG Conference hosted by [New Distribution] will open in Shanghai. Focusing on industry trends + practical cases + connecting growth as the core, 3000 FMCG practitioners will gather for the event. 10 themed forums covering new retail O2O, community group buying, short video live e-commerce, distributor transformation, rise of new consumer brands, new alcoholic beverage interpretation, distribution B2B supply chain, omni-channel marketing, B2B2C new technology applications, etc., with operators in each segment bringing the latest case interpretations. Some of the confirmed heavyweight guests so far include: **1. Tao Shiquan, founder of Jiangxiaobai; **2. Yao Xuhong, general manager of Meiyijia Holdings Co., Ltd.; **3. Lu Xiuqiong, global expert partner at Bain & Company and former vice president of marketing for Coca-Cola China; **4. Chen Xiaodong, senior vice president of Nestlé Greater China; **5. Zhang Fujun, president of Lee Kum Kee Sauce Group China; **6. Bi Chaojiao, general manager of China Resources Snow Breweries (China) Marketing Center; **7. Yang Hongbin, vice president of Junlebao Dairy Group; **8. Yang Shun, COO of Lipton Greater China; 9. Zhang Yipeng, general manager of Kuaishou E-commerce SKA Brand Operations Center; 10. Li De, e-commerce general manager of Gold Hongye Paper Group... A grand event for FMCG people, you must be there! Are you “watching” me?