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01 Last August, I wrote an article titled "Taobao is Just an Appetizer, R2C is the Main Course." Now, the main course is beginning to take shape, and its manifestation is community e-commerce. Here, R refers to retailers, more specifically small retailers. Some call it community group-buying e-commerce, but it doesn't seem related to group buying; perhaps they want to ride on Pinduoduo's coattails. Most rational people I meet are not optimistic about community e-commerce. Of course, this may be because I still interact more with traditional people. The main reasons for pessimism are that it's low-end and chaotic. The form is low-end, under the banner of e-commerce; some say it's the O2O version of WeChat business, others say it's just stores using internet methods for promotions. The low entry barrier leads to chaos, especially the earlier "mom" style community group buying, which was like guerrilla warfare.
02 Social interaction is the source of traffic, but transactions also affect social interaction. There's an old saying: WeChat business has no friends. Thus, the strong relationships formed by social interaction and transaction conversion are a contradiction. However, community e-commerce precisely merges social interaction and transactions, transforming them into each other. First, community relationships are inherently strong, tested by time, and existed in the offline era; second, past transactions have strong stickiness, which in turn affects social interaction. No online traffic has such large-scale strong social interaction and high-stickiness transactions as community e-commerce. This is why I am optimistic about community e-commerce. However, community e-commerce is just starting, and the business model is still in early iteration. It's unclear what the future business model will be. Being optimistic about community e-commerce doesn't mean being optimistic about all platforms; these are two different things. Of course, some say this is the ultimate test of human nature. Then I say, those who can't withstand the test of community e-commerce should exit the business stage early. There will certainly be such people.
03 Chinese big platforms seem to follow a pattern: chaos is an opportunity for platforms. Chaos arises from lack of organization. Scatter and chaos are twins. Big platforms initially gather the unorganized and scattered. Taobao's C2C organized unorganized individuals. Meituan also organized small shops. Pinduoduo also organized unorganized individuals. As long as you organize the unorganized, you become a big platform. In contrast, high-end approaches are hard to turn into big platforms initially. For example, in the B2B field, Retail Link and New Channel try to gather big brands, but it's very difficult because both sides have control desires and engage in games. Big platforms organize the scattered and chaotic, achieve scale, and then face upgrade issues. If Taobao hadn't upgraded to Tmall, Alibaba would have reached its limit. So, even if criticized, Ma Yun had to upgrade and raise the bar. Pinduoduo will also face this issue; if it doesn't tier, staying in this state is dangerous. Community e-commerce also starts with scattered stores. Like the past "thousand group-buying wars," only a few platforms will survive. But those that survive become big platforms.
04 New retail has various forms, such as new specialty retail and KA acquisitions, but what I favor most is the new retail platform built for street-corner stores. In the past, KA was valued mainly because individual stores were large, but KA's share of total retail sales is not high. Street-corner stores are numerous and account for a large share, but due to fragmented ownership and natural individual advantages, they are difficult to organize. No matter how retail innovates, the convenience provided by street-corner stores is hard to fully replace. If past e-commerce, like Taobao and Pinduoduo, aggregated scattered individuals, community e-commerce aggregates small stores. Aggregating these street-corner stores can create platforms with GMV in the tens of billions, far exceeding the current trillion-yuan e-commerce platforms. The biggest "main course" in e-commerce is R2C, community e-commerce. Some community e-commerce platforms open their own stores; I don't know what they're thinking. Any big platform must be a matchmaking form. Small stores naturally have individual advantages. Matchmaking means organizing small businesses.
05 Community e-commerce has become a trend at this time, and I believe there are three major reasons. First, the popularity of e-commerce. From a city perspective, it has spread to third- and fourth-tier cities; from an age perspective, it has spread to middle-aged and elderly people. The breakthrough category for community e-commerce is fresh produce, which is precisely a high-stickiness product that middle-aged and elderly people care about. Second, the popularity of mini-programs. If it were still APP and community-based, community e-commerce would be hard to popularize. Community e-commerce uses [mini-program + community] as the traffic entry, with a few supplemented by live streaming. In 2017, mini-programs began to popularize, and community e-commerce is a beneficiary. Third, B2B has awakened terminal stores. Community e-commerce, some say, evolved from WeChat business and mom-style group buying, ultimately settling on stores as the main focus. Using stores as "group leaders" has three major benefits: First, "group leaders" have high stickiness and trust with consumers in their business circle; second, the current fresh produce category is incremental for stores; third, community e-commerce in turn enhances stores' stickiness with consumers, mutually reinforcing. Any innovation must be born at the right time. The failure of early O2O was due to bad timing. When the above conditions are met, community e-commerce as an O2O form will naturally succeed.
06 Currently, there are many platforms doing community e-commerce, and I favor B2B platforms with supply chain advantages. I believe competition among community e-commerce platforms consists of three major factors. First, two levels of trust. One level is trust between the platform and the "group leader," and the second is trust between the "group leader" and consumers in the business circle. How is trust generated? First, scale; second, time. Small stores lack scale, so only time generates trust. Thus, small stores have an advantage over "moms." Second, the density of "group leaders." Community e-commerce is O2O, ultimately relying on warehousing and distribution. Warehousing and distribution efficiency is affected by two factors: density and average order value. This is logic verified by B2B. Currently, average order value is generally low, so the density of "group leaders" is crucial. Without density, you burn money. How is density achieved? One is by burning money, the other is by time accumulation. From this perspective, those "regional kings" in B2B are the best platforms for community e-commerce. Third, supply chain capability. Community e-commerce currently uses fresh produce as the breakthrough category. If you build a separate supply chain for community e-commerce, efficiency is low. If you share the supply chain with other categories, it's incremental for the original supply chain. Currently, surviving B2B companies and chain retailers have the most complete supply chains. Alibaba Retail Link and JD New Channel have franchised a batch of small stores, including Tmall stores, JD convenience stores, and Suning stores. If these stores transition to community e-commerce, they undoubtedly have advantages.
Source: Teacher Liu's Forum
Tenth B-end E-commerce Inspection -- "From Products to Scenes" Event time: December 10-13 Event locations: Wuhu, Nanjing, Changsha Event schedule:
Morning of Dec 10: Visit Three Squirrels headquarters + snack store
Afternoon of Dec 10: Visit Nanjing Squirrel small stores
Evening of Dec 10: Visit Nanjing Master Gao Beer Workshop
All day Dec 11: Nanjing-Changsha, or free arrangement
Morning of Dec 12: Community group buying exchange salon
Afternoon of Dec 12: Koala Selection Hero League launch event
Evening of Dec 12 to early morning of Dec 13: On-site inspection of Koala Selection logistics center -- This time is the peak sorting period in the warehouse, allowing direct observation and learning of the backend operation process of community group-buying e-commerce Distributor friends interested are welcome to join us for understanding and on-site inspection: Organization format
- Expert exchange salon
- Company visits
- On-site explanations
- One-on-one exchanges
- Actual market case visits
Friends who want to participate If interested in a specific day's content, you can register separately Long press this QR code or click "Read Original" to register in one click! Add friend and note your intention -END-