---
title: "Divergence in Group-Buying Stores: Similarities and Differences Between the Northern and Southern Schools"
description: "As the undisputed hot track of 2022, group-buying stores have undergone a year of rapid advancement and differentiation, gradually forming different factions. The Northern school is represented by Shijiazhuang's Xiaoxu Daojia, the Southern school by Nanjing's Guofengjia, and there is also Meilintao, born in the Central Plains, which can be seen as an empowering group-buying store upgraded from the Northern school model. Using Xiaoxu Daojia, Guofengjia, and Meilintao as representative cases, we analyze the similarities and differences between the Northern and Southern group-buying stores."
author: "黄腾飞"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2022-12-30"
language: "en"
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# Divergence in Group-Buying Stores: Similarities and Differences Between the Northern and Southern Schools

> As the undisputed hot track of 2022, group-buying stores have undergone a year of rapid advancement and differentiation, gradually forming different factions. The Northern school is represented by Shijiazhuang's Xiaoxu Daojia, the Southern school by Nanjing's Guofengjia, and there is also Meilintao, born in the Central Plains, which can be seen as an empowering group-buying store upgraded from the Northern school model. Using Xiaoxu Daojia, Guofengjia, and Meilintao as representative cases, we analyze the similarities and differences between the Northern and Southern group-buying stores.

As the undisputed hot track of 2022, group-buying stores have undergone a year of rapid advancement and differentiation, gradually forming different factions. The Northern school is represented by Shijiazhuang's Xiaoxu Daojia, the Southern school by Nanjing's Guofengjia, and there is also Meilintao, born in the Central Plains, which can be seen as an empowering group-buying store upgraded from the Northern school model. Using Xiaoxu Daojia, Guofengjia, and Meilintao as representative cases, we analyze the similarities and differences between the Northern and Southern group-buying stores.

**Current Status of the Northern and Southern Schools**

Xiaoxu Daojia was established in Shijiazhuang in November 2018. It builds group-buying stores based on the business logic of "physical store + private domain traffic pool." The small private domains of group-buying stores form a large private domain for the platform. Through unified action and a nationwide coordinated approach, it can concentrate efforts on helping farmers or promoting products nationwide. Currently, Xiaoxu Daojia has nearly 400 stores nationwide, including 20 in Shanghai and 86 in Hubei, maintaining a pace of 3-5 new store openings per day. Store sizes range from 20 to 60 square meters, with an average monthly group-buying efficiency of 100,000 to 150,000 yuan. The average SKU count per store is 50-100, with categories mainly consisting of daily necessities such as rice, flour, oil, seasonings, frozen foods, leisure snacks, and seasonal products. Leisure snacks account for about one-third. Fresh produce is entirely opened for group buying online. The gross margin for all single items at Xiaoxu Daojia does not exceed 20%, with the platform reserving 3%-5% as operating expenses.

Guofengjia was established in Nanjing in December 2021, positioned as "fruit store + private domain group buying," benchmarking against the "group-buying store version of Pagoda Fruits." It is the first innovative group-buying store that fully combines internet operations with physical retail management. Currently, it has more than 20 stores, divided into urban and county store types, and continues to expand based on the logic of "big city small stores and small city big stores." Guofengjia stores are located in first-tier cities and fourth- and fifth-tier cities. Urban stores are generally around 20 square meters, while county stores are around 100 square meters, with each type accounting for half. In terms of monthly group-buying efficiency per store, urban stores achieve around 150,000 yuan, while county stores achieve over 200,000 yuan. The online-to-offline sales ratio is 6:4 for urban stores and 4:6 or 3:7 for county stores. In terms of online and offline SKUs, urban stores display over 20 SKUs, while county stores display over 30 SKUs, with fruits as the main category, accounting for 80%, supplemented by milk and other categories. There are approximately 50-70 group products per week, with a weekly new product rate of 10-15, ensuring daily new products for group buying, while the rest are regular products such as rice, eggs, and flour. Guofengjia's average gross margin is 25%-30%.

It is worth noting that Guofengjia opens group buying every day, combining group reservation and Kuai Tuantuan. The reservation products are in the form of "explosive products + profit products" or "traffic products + profit products," organized twice to create a queue phenomenon and hot-selling atmosphere in the group. Kuai Tuantuan generally opens group buying five times a day, mainly to enrich product categories and provide users with diversified choices. Guofengjia's private domain operations department systematically studies TV shopping, live streaming e-commerce, and viral promotional copy, meticulously crafting its own product copy, continuously strengthening its ability to shape product selling points, and reflecting this in every communication detail. Guofengjia opens group buying daily in three forms: community, Moments, and private messages, using personalized scripts to guide users to experience, reserve, or participate in discussions. During the process of users picking up goods in stores, personalized service and sharing are used to increase cross-selling rates, thereby improving store efficiency and achieving online-offline collaborative operations.

Meilintao was established in Zhengzhou in May 2022, positioned as "group buying + supermarket/group buying + courier station," benchmarking against the "group-buying store version of Sun Art," and serving as an empowering group-buying store platform. Currently, it has more than 50 group-buying stores, concentrated in Zhengzhou. In terms of monthly group-buying efficiency per store, due to differences in group size, there is significant variation: stores with 1,000 people in the group have a monthly efficiency of 30,000-50,000 yuan, while stores with 2,000 people achieve over 100,000 yuan. The SKU structure is "25% direct-sourced fruits and vegetables from production areas + 25% market seasonal fresh produce + 25% ingredients + 25% hot-selling products from across the country."

The franchise-type group-buying store represented by Xiaoxu Daojia, the direct-operated type represented by Guofengjia, and the empowering type represented by Meilintao basically represent the main schools of group-buying stores in China. So, what are the similarities and differences in their business logic and market strategies?

**Similarities and Differences in Team Genes and Strategies**

Organizational structure is a direct reflection of team genes.

Specifically, Xiaoxu Daojia's headquarters mainly consists of core functional departments such as supply chain, operations, and warehouse management. The headquarters outputs explosive supply chain, models, and strategies, and each provincial company basically replicates the headquarters' organizational structure. Provincial companies have significant autonomy in core areas such as supply chain and warehousing and distribution.

In contrast, Guofengjia's organizational structure is more internet-oriented, integrating the institutional configuration of "brand chain retail and internet companies." Guofengjia's headquarters has four major departments, representing the platform's unique understanding and refined operational strategies for group-buying stores:

(1) Supply Chain Center: The supply chain is the basic guarantee department, responsible for direct sourcing from bases, platform self-purchasing, and group wholesale supply chains, handling everything from product selection, distribution to stores, and after-sales.

(2) New Retail Business Center: Includes two functional departments: online group buying and store retail. The online group buying department is mainly responsible for private domain operations, maintaining store WeChat Moments and communities. The store retail department is responsible for store script training, store supervision, and also store planning, executing store opening and daily operations to attract new customers, enhance store profitability, and pursue ultimate efficiency.

(3) Investment Promotion Center: Includes new media investment promotion and traditional investment promotion departments. New media investment promotion includes Douyin, Kuaishou, and Xiaohongshu. According to Guofengjia founder Jin Gang, nearly half of the platform's cooperation consultations come from Xiaohongshu. Traditional investment promotion includes visits to regional fruit stores and local group leaders, opening partner stores, with the platform controlling stores, groups, and traffic. Additionally, store location and decoration departments are integrated with investment promotion.

(4) Organizational Development Center: Responsible for organizational training and talent pipeline development. Guofengjia has strict selection criteria for new employees, with unified training upon entry and direct elimination for those who do not meet standards. The goal is to unify underlying cognition, standardize action execution, and quickly produce results.

Guofengjia's store staffing is configured as "1+1" for urban stores (one store manager plus one clerk) and "1+5" for county stores.

For Meilintao, the logic is mainly to transform and empower stores, outputting standard strategies and explosive supply chains to group-buying stores to help physical stores improve operational efficiency. Its organizational structure mainly includes market investment promotion, procurement, operations, and supervision and delivery teams.

Additionally, Guofengjia's headquarters also has conventional departments such as finance and legal, as well as a brand planning department directly led by the founder. The brand planning department is mainly responsible for building the founder IP, platform IP, and group leader IP, analyzing industry phenomenon-level brand cases, and enhancing the platform's brand power.

**Both Steadily Expand Warehousing and Distribution Facilities, but with Different Supply Chain Approaches**

Both Xiaoxu Daojia and Guofengjia believe that when a city or region reaches 30 stores, an independent warehouse should be established, with the core being to solve stable delivery issues. For distribution, both platforms cooperate with third-party distribution agencies on a long-term basis.

When Xiaoxu Daojia enters a new city, it uses social logistics such as Huolala to solve distribution issues, initially without setting up a warehouse. In the early stage, suppliers deliver directly to stores or park at designated locations for group leaders to pick up goods. After reaching 30 stores, the platform begins to set up warehouses. Currently, Xiaoxu Daojia has independently set up warehouses in cities including Xi'an, Nanjing, Wuhan, Yichang, and Shanghai. Among them, the Nanjing warehouse covers 1,000 square meters and serves more than 50 stores.

In terms of supply chain organization, there is a clear difference between Xiaoxu Daojia and Guofengjia. Xiaoxu Daojia delegates supply chain organization authority to provincial partner companies. The headquarters will provide vegetables or general explosive products based on provincial companies' needs for early city-opening and store expansion support. Guofengjia, on the other hand, insists on controlling stores, products, and traffic, outputting a full product assortment to stores and not allowing stores to sell products outside the system. In supply chain organization, Guofengjia is divided into three modules: explosive "group wholesale procurement," advantageous categories "direct sourcing from bases," and niche categories "platform self-purchasing." Group wholesale can be delivered to stores, while direct sourcing and self-purchasing products mainly rely on third-party agencies for distribution. It is reported that there are more than 160 local group wholesale platforms in Nanjing, and one-third of Guofengjia's explosive products come from group wholesale supply chains.

**Group-Buying Store Strategies: Northern School Emphasizes Supply Chain, Southern School Emphasizes Deep Operations**

In terms of site selection, Xiaoxu Daojia primarily considers population density, generally choosing street-side stores that radiate to 3-5 surrounding communities, covering 10,000-20,000 households. In terms of specific strategies, it uses special-priced vegetables for aggressive customer acquisition. On the opening day, it creates 4 store groups with a target of attracting 1,500-2,000 people. Subsequently, it uses reasonably priced or slightly loss-making products to warm up the groups and maintain group activity. Xiaoxu Daojia's indicator for group activity is a 20% follow-up rate for a single product, which is 300 orders. With its strategy of opening three products daily, that amounts to 900 orders. When Xiaoxu Daojia was expanding nationwide, it discovered a pattern: northern users have a habit of stocking up on vegetables, preferring large sizes of 5-6 jin, while southern users prefer freshness and small sizes of 1-2 jin. Due to differences in customs and habits, the opening and customer acquisition strategies for northern and southern group-buying stores also need localized innovation, mainly strengthening supply chain capabilities and continuously delivering explosive and essential products to stores.

Guofengjia's primary factor in site selection is convenience. Urban stores are mainly located at community entrances or next to courier stations, positioned to serve one nearby community. For the surrounding 1-3 communities, Guofengjia proactively contacts them and converts them into distribution group leaders outside the system, forming a long-term coexistence with the stores. It will also gradually convert capable group leaders to open independent stores. Guofengjia's other store type, "county stores," is mainly located at intersections or crossroads radiating to three or four communities.

The customer acquisition goal for new store openings is to complete the construction of a 1,000-person private domain community within 1-2 days. Guofengjia's urban and county stores target different groups and have different customer acquisition strategies. Urban stores target mainly young people, with fruits as the main customer acquisition category. County stores target not by age group but to maximize coverage of local essential needs, with vegetables as the main category. It is worth noting that **Guofengjia has normalized customer acquisition. In addition to opening-day ground promotion, it also continuously conducts "daily operational customer acquisition"** — every new customer who enters the store is added on WeChat by the store manager and invited to the store group for discounts. It is estimated that daily operational customer acquisition can accumulate at least 300 new customers per month for the store, and stores normally operate 3-5 private domain communities.

**Differentiation Strategy: Focus Resources, Strengthen Strength, and Provide Ultimate Service**

Mr. Xu of Xiaoxu Daojia believes that the essence of differentiation is to focus resources and strengthen one's own strength. Always thinking about differentiation can easily be led astray by competitors' pace. One should think about how to continuously provide users with products and services of ultimate cost-effectiveness. By maintaining dynamic innovation advantages, a barrier is formed, and user scale is the biggest barrier. By making the model lighter, expansion becomes lighter and faster, forming a scale advantage through multi-city coordination.

Mr. Jin, founder of Guofengjia, also believes that doing one's own thing well and focusing on ultimate service is the foundation of differentiated competition. Guofengjia is a group-buying store platform that places great emphasis on service. Through continuous service and review, Guofengjia has summarized the motto: **"After-sales is the foundation, exceeding expectations is service."** In Mr. Jin's view, after-sales is the most basic guarantee. Only with exceeding expectations can customers be pleasantly surprised, and trust and word-of-mouth be gained.

It is worth noting that to better serve users, Guofengjia tags each user. Through purchase records, store manager observations, chats, and other comprehensive information, users are tagged, such as "personal preferences, family situation (whether there are elderly or children), whether responsible for daily household supplies procurement," etc. Being more familiar with users allows for personalized service, which in turn builds customer relationships. For example, Guofengjia learned that many users like Nanjing's local internet-famous breakfast, but due to distance, it is inconvenient to buy. The platform then organizes one or two group buying sessions per week to meet users' personalized needs. Doing user tagging well not only improves personalized service but also increases cross-selling rates through sharing trial tastes with users. Guofengjia has strict and detailed training and requirements for store sales, aiming to let users feel the joy of sharing rather than the discomfort or even pressure of being sold to, allowing users to make choices willingly.

In contrast, Meilintao's model is lighter. Meilintao mainly transforms existing community mom-and-pop stores and courier stations into community group-buying stores, supplementing stores with explosive supply chains and a complete set of group-buying store strategies. Meilintao does not encourage group leaders to open independent stores.

It can be seen that **Meilintao pays more attention to the foundation of group-buying stores, Xiaoxu Daojia focuses more on traffic system construction, and Guofengjia emphasizes refined operations.**

It is worth noting that **Mr. Xu of Xiaoxu Daojia and Mr. Jin of Guofengjia are both skeptics of "tool-only" and "efficiency-only" approaches.** They agree that the coldness brought by efficiency tools can also make communities lose warmth. The form of group counting or reservation can create another kind of queue and hot-selling atmosphere, and also enhance communication between users and stores. In addition, mall tools often sacrifice potential orders because users hesitate and give up, and they are also "unfriendly" to middle-aged and elderly users, preventing them from enjoying the new experience brought by online group buying.

**Market Expansion and Outlook**

From an operational model perspective, Xiaoxu Daojia is a franchise-type group-buying store. The headquarters and provincial companies are in a parallel collaborative relationship, forming a "headquarters-province-city" multi-level franchise model.

Guofengjia is a direct-operated type, with the headquarters directly controlling stores, forming a "big central, small local" structure.

Meilintao is an empowering type, overall lighter, with the headquarters playing an organizational role, forming alliances with other local group-buying stores, sharing supply chains, and exploring new models and strategies.

Specifically, Xiaoxu Daojia adopts a three-level franchise model of "headquarters-provincial partner-city partner." The platform requires provincial partners to have the ability to open 20-30 stores in the provincial capital, and city partners to have the ability to open 5-10 stores, before they can guide more people to open stores. Xiaoxu Daojia's goal for 2023 is to basically complete nationwide coverage except for remote areas like Xinjiang and Tibet, without setting a specific number of store openings, first completing nationwide layout. It is reported that regional markets such as Liaoning, Inner Mongolia, Shandong, and Beijing will be launched soon.

Guofengjia currently does not have franchise stores; all are partner stores with deep headquarters involvement. Guofengjia plans to open 50 city stores in 2023 and enter 10 county cities, expanding 5-10 stores in each county city.

Meilintao will continue to deepen its presence in Zhengzhou, hoping to lay out 1,000+ group-buying stores in Zhengzhou's 6,000+ communities. Additionally, it will jointly empower 100+ city group-buying store chains within a 300-kilometer radius of Zhengzhou, collectively empowering 10,000+ physical supermarkets.

As representative platforms of group-buying stores, the three founders have different views on group-buying stores. Mr. Li, founder of Meilintao, believes that **group-buying stores have brought community group buying back from a supply chain model to a traffic model, enhancing the productivity of group leaders. There are also two major contributions: first, establishing the standard for effective group-buying stores (2,000-person community scale), and second, practicing the methodology of lightning-fast customer acquisition.**

Mr. Xu of Xiaoxu Daojia believes that **group-buying stores, like community group buying, are easy to understand but difficult to master, with high hidden barriers. If one approaches it with a get-rich-quick mentality, they will soon be eliminated. Without perseverance, patience, and the determination to serve continuously, it is hard to persist. The so-called 'to take, one must first give.' Only by learning to give profits, lowering oneself to serve users, and learning to calculate long-term accounts can one survive and profit sustainably.** The rise of group-buying stores has made community group buying pay more attention to the quality of group leaders rather than quantity, further promoting the professionalization and full-time dedication of group leaders. In the future, group leaders must act in unison with the platform, earning money from time and user habits, rather than from limited information asymmetry. Moreover, in the current era of information transparency, earning from information asymmetry will only become harder.

More critically, group-buying stores are also guiding physical stores to pay more attention to online traffic, publicity, and operations, making information flow efficiency higher than product flow, improving the operational efficiency of physical stores, and driving the digitalization of community mom-and-pop stores.

Mr. Jin of Guofengjia believes that **group-buying stores have the potential to break the low-quality, low-price involution of community group buying. They should benchmark against high-end formats like Pagoda Fruits, offer high-quality and cost-effective products, continuously provide personalized services, enhance store profitability, and take the path of brand building for group-buying stores to achieve long-term operations and avoid falling into involution again later.** At the same time, Mr. Jin also predicts that due to the overheated track, a batch of small platforms and new platforms seeking quick money will enter, using the banner of group-buying store franchising to amass wealth and expand. This is something track participants and new entrants should be wary of to avoid stigmatizing group-buying stores. But in any case, a wave of consolidation in group-buying stores is inevitable next year.

**Conclusion:** Community group buying was born in 2016 and has undergone three major iterations: 2016-2020 community group buying 1.0 - "local group buying"; 2021 community group buying 2.0 - "group wholesale"; 2022 community group buying 3.0 - "group-buying stores." Each iteration has brought a round of consolidation and differentiation, with old kings falling and new kings crowned, and industry rankings reshuffled. Its greatest contribution is that it has turned group buying from a new business format into a new lifestyle for users, and also into a new mainstream in the retail track.

**In the second half of 2022, group-buying stores began to undergo a round of differentiation, and the Northern and Southern schools will also produce new leaders. Let's wait and see.**


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