Source: Retail Circle (ID: retailsphere) Didi's first community fresh food store, Orange Heart优选. Community, fresh food, and e-commerce have become battlegrounds for retail enterprises. Supply chain, technology, fulfillment, and team are the core elements constraining their development. Internet giant Didi is intensifying its攻势 in community e-commerce. Retail Circle has learned that Didi's first community fresh food physical store nationwide, Orange Heart优选, has opened in Chengdu. -01- From Community E-commerce to Physical Stores Didi's New Retail Ambition Retail Circle understands that Didi's first community fresh food physical store is located in Qingfeng Times City, Chengdu High-tech Zone. This is the first innovative empowerment cooperative store created by Orange Heart优选, mainly supplying vegetables, fruits, meat, poultry, eggs, dairy, rice, flour, oil, and daily necessities to meet the immediate and high-frequency consumption needs of community residents. On one hand, it allows the Orange Heart优选 brand to connect with consumers through physical stores closer to communities; on the other hand, as a community e-commerce (community group buying) model of "order online + pick up offline," the setting of physical stores (front warehouses) has become standard. This is also a necessary path in the development of Orange Heart优选. The opening of this physical store is an exploration and attempt by Orange Heart优选 to build offline outlets, laying the foundation for nationwide replication in the future. Supply chain, product quality control, and warehousing and distribution systems are widely recognized as the three key points for community e-commerce development. For the newly entering Orange Heart优选, these three capabilities are what it lacks, so the physical store can be considered part of the warehousing and distribution system. -02- 3 Months, 9 Provinces and Cities Didi President Liu Qing Supports Orange Heart优选 Screenshot of Didi President Liu Qing's Weibo On the morning of October 21, Didi President Liu Qing posted on Weibo: "Early in the morning, I saw two letters from the Orange Heart优选 team to the product, research, and design colleagues. They are sincere and heartfelt, and I want to share them with everyone. With such partners, what is there to hesitate about? Let's not dwell on the past and move forward together." This affirmation and encouragement for the Orange Heart优选 team is fully revealed between the lines. Among them, the internal letter from Orange Heart优选 reposted by Liu Qing mentioned that during the National Day holiday, the product and R&D team "optimized 62 system issues," often working overtime until 4 a.m. In terms of personnel, the strongest "technical" support has also been given. On October 21, Lai Chunbo, CTO of Didi's ride-hailing platform company, will be transferred to Orange Heart优选, responsible for product technology, customer service, warehousing and distribution, quality control, and fulfillment system construction. Retail Circle understands that Orange Heart优选 is Didi's community e-commerce platform. Like the general community group buying model, Orange Heart优选 adopts the "order today + deliver next day + pick up at store" model, providing community neighbors with high-quality and affordable fruits, vegetables, meat, poultry, eggs, dairy, rice, flour, oil, and daily necessities. Currently, "neighbors" of Orange Heart优选 can not only place orders directly through the WeChat mini-program "Orange Heart优选 Community E-commerce," but also through the independently developed "Orange Heart优选" APP. After entering the APP, users can choose the nearest pickup point to place orders. Between 0:00 and 23:00 daily, neighbors can place orders on the Orange Heart优选 mini-program (APP) and pick up at the selected pickup point the next day. On June 15, Orange Heart优选's first stop landed in Chengdu. In the following four months, it successively entered 9 provinces and cities including Sichuan, Chongqing, Shaanxi, Shandong, Guangxi, Chongqing, Guizhou, Yunnan, Henan, and Fujian, with daily order volume continuously rising. On September 11, the daily order volume in the Sichuan-Chongqing region exceeded 500,000; on September 17, the daily order volume in Sichuan exceeded 550,000; as of September 28, the national daily order volume of Orange Heart优选 exceeded 2.8 million orders. -03- Why Internet Giants Are Increasingly Betting on Community Group Buying 2019 was the "great tribulation" year for fresh food e-commerce, and 2020 is the "revival" year for community e-commerce. The bankruptcy of Yiguo Fresh, which had raised over 6 billion yuan and operated for 15 years, does not seem to have brought much warning to the industry, and new players are entering with great fervor. A thousand sails pass by the side of the sunken ship; ten thousand saplings grow in front of the diseased tree. Internet giants have the keenest sense of smell for retail. In addition to the traditional internet giant BAT (Baidu, Alibaba, Tencent) camp, the new internet giant camp TMD (Didi, Meituan, Toutiao), JD.com, Suning, Pinduoduo, and other top 10 Chinese internet companies have almost all increased their bets on community group buying. Community group buying has become the hottest trend this year after "live streaming带货," and there is no other. Community group buying is an iteration and evolution model of community e-commerce, or an optimization of "ordering methods" and "delivery methods." It emerged when community e-commerce only had simple online interaction scenarios and could not meet consumers' demands for "lower prices" and "faster" consumption. It has several characteristics:
At the last mile of the community, whether it is a front warehouse or a nearby pickup station, being very close and convenient is its main feature.
The "collective ordering" model of the pre-sale system solves two problems: on one hand, it solves the loss problem of fresh products (order what is needed, sell what is needed, deliver what is needed); on the other hand, it solves the distribution cost problem (one-to-many distribution model is cost-effective compared to home delivery).
Product categories are concentrated in household food, fresh products, and daily necessities, which is a consumption model of "large order volume," "high customer unit price," and "high frequency." These three characteristics meet the retail "payment terminal" needs of high frequency, high customer unit price, high stickiness, and high repurchase, making it a battleground. Alibaba, Tencent, Meituan, JD.com, Pinduoduo, and Didi have all done it. Can ByteDance not be envious? Moreover, this is not just about envy, but about the issue of "if you don't advance, you retreat." Alibaba's Hema优选 has officially announced its establishment. The ambition behind Hema's community group buying is Hema Cloud Supermarket, and community group buying is expected to first launch in Wuhan in November. Meituan has heavily invested 70 billion yuan to enter community group buying, launching Meituan优选 and proposing the "Thousand Cities Plan" combat strategy. Pinduoduo is led by founder Huang Zheng, coordinated by COO Abu, with five VPs and co-founders from the founding team in charge of five major regions. It has successively launched Kuai Tuan Tuan and Duoduo Maicai. Tencent, with abundant money and strong technology, is "investing, investing, investing," acquiring the leading community group buying company Furong Xingxing and making a big move into community group buying. Giants' Layout in Community Group Buying Giant | Method | Brand Alibaba | Investment | Shihui Tuan Tencent | Investment | Xingyou优选, Shixiang Hui Meituan | Self-built | Meituan优选, Meituan Maicai Pinduoduo | Self-built | Duoduo Maicai, Kuai Tuan Tuan Hema | Self-built | Hema优选, Hema Cloud Supermarket Didi | Self-built | Orange Heart优选 Table: Retail Circle No matter who enters or who breaks in, community, fresh food, distribution efficiency, and supply chain are all unavoidable topics on the current retail track.