Community group buying has undergone years of intense competition, with capital-backed platforms emerging as the top four: Meituan, Duoduo, Taobao, and Xingyou. Local platforms are even more active, blossoming across the country, with several platforms achieving annual sales exceeding 100 million yuan. Behind the rise of these platforms, a batch of group brands have also risen accordingly. Xinjiang dairy brand Tulaolao has laid out community group buying channels, achieving annual sales of hundreds of millions of yuan. Traditional brand Lvling launched a new snack product, Huohou Roasted Walnuts, and through group leader seeding and hot product strategies, the roasted walnut single product sold 4.36 million boxes in 8 months... As community group buying shifts from 'incremental growth' to 'quality improvement,' group brands are gaining increasing industry attention. This article focuses on the recently hotly discussed group brands, analyzing and interpreting them from four dimensions: 'market status, market strategies, underlying logic, and future landscape,' aiming to bring different insights and reflections to the group buying industry. 01
Market Status: Creating 'Group' Hot Products
Recently, in a live stream, Farmer Lao Wang, founder of Cangji Linli, revealed that in the next phase of deepening its presence in Taicang, a county-level city under Suzhou, Cangji Linli will begin expansion, planning to open in Suzhou soon and in Changzhou, 140 kilometers from Taicang, in October. As the first local group in Suzhou, Cangji Linli was founded in 2017, accepted capital in 2018, exited capital in 2020, paused in 2021, and restarted this year. After the restart, a group of old group leaders rejoined, forming the foundation. Upon his return, Lao Wang gained new insights into group leader operations and supply chain operations. He believes that group leader operations need to be deepened, and supply chain operations should strengthen differentiated advantages, with the core being to achieve 'what others don't have, I have; what others have, I have better; what others have better, I have cheaper.' With the steady implementation of a set of strategies, including 'fresh food and snack hot products to open the way, Douyin recruitment of group leaders and suppliers, and supplier policies directly reaching group leaders,' Cangji Linli has once again become a leading local group in the Suzhou area. It is worth noting that the high-end egg brand Huang天鹅, coached by Chen Haichao, chief consultant of Kaiman 4000, chose Cangji Linli as its partner when laying out community group buying channels in the Suzhou region. Cangji Linli's opening in Suzhou will be coordinated with Huang天鹅's entry into community group buying channels in Suzhou's urban area. Huang天鹅 will place product advertisements in community elevator ads in Suzhou's urban area, with the slogan 'Buy Huang天鹅 edible raw eggs, go to Cangji Linli,' and provide thousands of trial packs for group leaders. It is evident that mainstream brands have begun to value the channel value of local groups. While helping platforms enhance competitiveness and create brand 'groups,' they also take the opportunity to expand 'group' channels and build 'group' brands. Suppliers' regional expansion accompanies the platform's regional expansion, complementing and achieving mutual success. If group brands have formed cross-platform channel momentum, then the platform's group hot products are the prototype of group brands, still in the stage of accumulating momentum. In March this year, Youjing Youtian announced the opening of six cities simultaneously, releasing four million-yuan single products created by the platform: 'Youjing Youtian Green Shrimp, Youjing Youtian Free-Range Eggs, Youjing Youtian Herbal Enzyme Laundry Detergent, and Youjing Youtian Sugar Oranges.' These four single products represent the many hot products accumulated by Youjing Youtian. In the context of Youjing Youtian's group leaders, the shift from 'Go to Youjing Youtian, buy XX quality goods' to 'Buy specialty free-range eggs, go to Youjing Youtian' is a vivid portrayal of the switch in Youjing Youtian's development momentum. From group leader recommendation to consumer self-selection is a key indicator of product brand strength. Building a group brand is not an overnight task, nor can it be achieved by a single supplier, platform, or market. So, from the perspective of a brand manufacturer, what is the path to building a group brand? 02
Market Strategies: The Trilogy of Group Brands
Regarding the specific path for brand manufacturers to build group brands, Li Baolin, an expert in community e-commerce practice, believes it must go through three major stages, which can be interpreted as the following three parts: 1) From 0 to 1 stage: user cognition and product value cultivation, with the core being to enhance product strength. This requires that the product's functional value highly matches the user group and consumption scenarios, and that the product's specifications, sensory experience, appearance design, and overall cost-effectiveness meet the consumption needs of the target audience. Additionally, the core is to solve the problem of 'group leaders finding it easy to promote, willing to promote, and even actively promoting,' i.e., the group leader incentive mechanism. 2) From 1 to 10 stage: market deepening and channel momentum building, with the core being to enhance channel strength. This requires brand manufacturers to create hot product cases based on platforms, establish model markets, and then begin to radiate to surrounding regional platforms. During the gradual market expansion phase, brand manufacturers must pay attention to the design of profit distribution mechanisms, market channel control, and long-term investment in brand building. 3) From 10 to 100 stage: brand momentum and brand IP building, with the core being to enhance brand strength. Brand momentum refers to the brand's ability to expand across regions and platforms, while brand IP refers to the brand's ability to expand across channels. The establishment of brand momentum is centered on unified brand visuals and consistent brand communication tone, forming a word-of-mouth fission effect among user groups. The construction of brand IP is centered on turning users into fans, strengthening fan operations and activation capabilities, forming user self-selection habits, and enhancing the brand's cross-channel penetration capability. The high flexibility in product selection, short channel links, and strong group leader operational capabilities of local groups determine that local groups are the optimal path for building group brands. Building group brands is a strategic choice for small and medium-sized enterprises to bypass the red ocean of traditional channel competition and open up new growth paths. As community group buying gradually becomes a new mainstream channel, the rise of group brands is bringing new imagination space for breaking through the involution of community group buying. Can group brands, like the Taobao brands of that era, break through and become new mainstream brands? What development trends will group brands show next? This can be glimpsed from the underlying logic of the rise of group brands. 03
Underlying Logic: Channel Brands
Understanding the underlying logic of group brands is key to understanding 'why they arose and where they are going.' Looking at community group buying from a broader perspective outside the industry will bring us deeper thinking and inspiration. Recently, Liu Chunxiong, a channel digital marketing expert, professor at Zhengzhou University, and the first proponent of the new marketing theory, published a series of commentary articles on community group buying. His views on group brands are insightful and comprehensively discussed. Teacher Liu believes that the underlying logic of group brands is channel brands, characterized by 'team-based deep cultivation of channels,' which is the market approach of most domestic small and medium-sized enterprises. Based on Teacher Liu's views, the reasons why local groups build group brands can be extended and interpreted as the following three: 1. Local groups are good at promoting new products, and group leaders are willing to promote new products. Currently, local group supply chains mainly consist of non-standard and non-brand products, which commonly lack momentum and require group leader recommendations to form the first wave of channel momentum and bring sales. Brands continue momentum through group leader incentives and market activities, gradually forming brand reputation. 2. Local groups deeply operate group leaders, enabling the formation of high density in group leader organizations. Group leaders are the retail terminals in the FMCG industry context. The formation of density in group leader organizations creates communication density online, which helps new brands ignite in regional markets and subsequent market penetration. 3. Local groups directly reach users, enabling the formation of high density in user organizations. For new brands, stirring the market requires high-frequency activities and feedback from group leaders and consumers to continuously optimize market strategies, gradually cultivating user self-selection and repurchase habits. The flat organization of local groups is more suitable for building new brands. In summary, group brands are channel brands, requiring both multi-platform collaboration to form 'group leader density' and periodic 'group buying' to form user density. Therefore, group brands need to learn the channel organizational strength of deep distribution. Even if group brands form a certain brand strength, market deepening cannot be relaxed. The construction of group brands needs to be coordinated with local groups and is a long-term project. Most group buying suppliers have not experienced the era of deep distribution and lack channel organizational strength. The bamboo forest eggs frequently mentioned in the group buying circle are a hot product accumulated by Jiubai Street, the 'hanging king' of Northeast China. In the monthly member day live streams, selling bamboo forest eggs has become a 'must-have program,' with each live stream almost achieving sales of over one million eggs, basically forming the 'bamboo forest egg phenomenon' of 'regular group openings, and every opening is a hit.' Returning to the context of group brands, bamboo forest eggs have established brand momentum on the Jiubai Street platform. Whether they can achieve greater breakthroughs depends on whether the brand side can amplify this momentum and establish cross-platform, cross-regional, and even cross-channel brand momentum. At present, bamboo forest eggs have achieved significant results in the first stage of group brand building. 04
Future Landscape: Four Types of Group Brands
Just as the platform side of community group buying has seen model differentiation and evolution, the supplier side will also continue to differentiate in the future. With mainstream brands and head supply chains of community e-commerce entering the local group track, it will inevitably accelerate the rise and differentiation of group brands. Regarding the future landscape of group brands, Teacher Liu Chunxiong believes that four types of group brands will emerge: 1. Platform-owned group brands This can be interpreted by benchmarking against the private brands of large chain supermarket channels. When a local group platform expands to a certain scale, it gains greater bargaining power in the industry chain and becomes capable of incubating its own group brands. In addition to the million-yuan single products based on supply chains mentioned above, Youjing Youtian is also creating personalized category brands based on the personal IP of its procurement staff and their leading categories. 2. Manufacturer group brands Due to the highly dispersed market distribution of local groups, manufacturers upstream in the industry chain need to organize these scattered local group channels. The process of a new brand growing into a group brand is a process of continuously improving channel organizational capabilities and expanding the scale of channel organizations. Currently, manufacturers entering local group channels is still in its infancy, with many brand owners configuring teams 'specializing' in local group channels, such as the new consumer brand 'Adopt a Cow.' 3. Standard product operator group brands This can be interpreted by benchmarking against community e-commerce agency operation institutions. So-called group buying operators understand both the group buying supply chain and the platform side, but have more channel deepening and organizational capabilities than general supply chain institutions, becoming agency operators for suppliers' local group channels. Currently, community e-commerce agency operation institutions have developed quite maturely, such as Maichun E-commerce, which achieved 30 million yuan in revenue in August, becoming the top supplier in Meituan Select in terms of scale and professionalism. It currently focuses on four categories: personal care, condiments, alcoholic beverages, and snacks. In contrast, local group channels have not yet grown professional brand operators. 4. Fresh food service provider group brands Fresh food is the largest category in community group buying and is the 'first handle' for local groups to 'stick to users.' As a non-standard product, the upstream of fresh food is more dispersed, from growers, origins, agents to wholesale markets, and has not been effectively organized to form a group brand with 'stable quality, stable delivery, unified brand, and unified service standards.' There are only circulation brands like wholesale markets. For fresh food supply chains and wholesalers, whether they can 'break business thinking, strengthen platform service awareness, and establish brand building awareness' determines whether they can seize the dividends of the rise and expansion of local groups, transform and upgrade into fresh food category service providers for local group platforms, and create group brands in the fresh food category. At present, such fresh food service providers have not yet emerged in the industry. However, group batch supply chains based on fresh food, such as Qinguo Tuanpi, have begun serving community group buying channels in surrounding markets. Whether they can create fresh food category group brands depends on Qinguo Qingcheng's strategic positioning for this business. As mentioned earlier, when brand momentum accumulates to a certain level, users' self-selection and repurchase habits have formed, and word-of-mouth fission begins among user groups, the brand also gains the ability to break through across channels. Beyond the group buying channel, there are two development paths for group brands: one is from private domain to public domain, i.e., expanding to live e-commerce channels like Douyin and Kuaishou, and traditional e-commerce channels like Taobao, JD, and Pinduoduo; the other is from online to offline, i.e., traditional retail channels like supermarkets and convenience stores. Going from private domain to public domain yields relatively faster results, but it should be noted that live e-commerce and traditional e-commerce are delivered in a drop-shipping format, with different user groups and different channel margin requirements. Going from online to offline is a long-term project. Offline competition tests basic channel skills and the organizational and execution capabilities of the offline team, i.e., the team's ability to operate deep distribution. If combined with local group store group leaders, the construction of offline channels for group brands will have a better market and user foundation. Conclusion: The three major infrastructures of community group buying, centered on 'group leaders, warehousing and distribution, and supply chain,' are continuously differentiating and iterating. The warehousing and distribution model of 'centralized distribution and next-day pickup' reflects the core advantages of the community group buying model and is recognized and adhered to by the industry. Innovation around the group leader side has been ongoing, such as the professionalization and independence of group leaders. The rise of group brands marks the official opening of innovation in group buying supply chains. Source: Kaiman 4000 (ID: kaiman4000) Author: Huang Tengfei -END- Live Stream Topic: 'Discussion: Is RFID + Digitalization the Evolution Direction of FMCG Supply Chains?' Time: September 29 (Thursday) 20:00-22:00 Host: Chen Siting, CEO of New Distribution Guests: Xu Ming, General Manager of Cainiao Logistics Technology IoT; Weng Zhangxian, Technical Director of Uni-President China Digital Center; Cao Zhimin, General Manager of China Resources Snow Breweries' National Operations Center; Zhao Haoyu, Senior Expert in Digital Supply Chain at Cainiao Logistics Technology. With the product digitalization brought by RFID, how can we build a digital supply chain system for FMCG manufacturers on this basis? How can we solve the deep-rooted problems of traditional supply chains mentioned earlier? New Distribution has invited multiple brand managers, marketing experts, and professional service providers to connect to the live stream room to discuss the evolution path of FMCG supply chains in the new era and new market environment.