---
title: "From the People, to the Giants' Wallets"
description: "When giants can't find new territory to expand, they turn to what people lack in daily life, even creating perceived needs. Community group buying isn't just about vegetables; it's about all household needs. Those who see only giants grabbing vegetable baskets misunderstand the trend. Ultimately, e-commerce competition hinges on cost-performance, product quality, service, and customer loyalty, where any edge can lead to success, but any lag can lead to abandonment."
author: "风千语"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2021-01-18"
language: "en"
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---

# From the People, to the Giants' Wallets

> When giants can't find new territory to expand, they turn to what people lack in daily life, even creating perceived needs. Community group buying isn't just about vegetables; it's about all household needs. Those who see only giants grabbing vegetable baskets misunderstand the trend. Ultimately, e-commerce competition hinges on cost-performance, product quality, service, and customer loyalty, where any edge can lead to success, but any lag can lead to abandonment.

All giants, when they can't find new territory to expand, will turn to what people lack in their daily lives, and even if they don't lack anything, they have the ability to make them feel they really lack something.
Community group buying isn't just about people buying vegetables; it also cares about brushing teeth, washing faces, washing dishes, and so on.
Those who only see giants grabbing vegetable baskets are probably not very familiar with community group buying.
Any e-commerce model, when competition reaches its end, mainly depends on cost-performance, product quality, service system, and customer stickiness. If any one of these is superior to peers, the chance of winning is high; if any one lags behind, it's easy to be abandoned by the market.
So, many people choose JD for next-day delivery logistics, choose Taobao out of habit, and choose Pinduoduo for cheapness...
From the four points of cost-performance, product quality, service system, and customer stickiness, what are the strengths and weaknesses of community group buying? The answer is vague.
**Low price: Pinduoduo and Taobao Special Edition also have it;**
**Product quality: Depends on luck; fresh produce is hard to standardize;**
**Service system: Depends on the group leader? In the future, group leaders can be replaced by self-pickup lockers and other forms;**
**Customer stickiness: Seems non-existent; users and group leaders can switch at any time.**
Community group buying is just beginning, and it's normal to have various shortcomings and controversies, but the key isn't whether it's grabbing jobs or improving efficiency, because since the trend is hard to reverse, it's better to think about more practical issues.
Cost-performance, group buying, trends... When we gather all the words about community group buying, we inevitably think of Pinduoduo in the lower-tier market. The two can't be fully compared, but group buying that forgets social attributes is even worse than Pinduoduo.
Under multiple pressures of inventory, loss, and channels, both asset-light service group buying and asset-heavy physical group buying have their own unsolvable problems.
**Fresh produce has never been the only choice for group buying, nor are daily chemicals.**
# **-01-**
**The Changed Community Group Buying**
According to the public account "Old Talk," community group buying will be the last battle of e-commerce, because although e-commerce has lowered average order value, it has increased purchase frequency.
Next-day or even same-day delivery logistics isn't new; in first- and second-tier cities, most products from Tmall Supermarket and JD Self-operated have already achieved this. So why is community group buying still so popular?
Up to now, the real contribution of community group buying is the popularization of e-commerce.
If Pinduoduo allowed most users outside the Fifth Ring Road to first contact e-commerce, then community group buying deepens their understanding of e-commerce, showing that the distance between online and offline can be so close.
**The easier it is to obtain goods, the crazier e-commerce becomes.**
Current community group buying excessively exploits people's desire for quick and low-priced goods, leading to increasingly severe problems like product quality, lack of after-sales, and channel conflict.
**The focus seems to be on selling vegetables, but the SKUs are mainly distributed in daily necessities. According to data from three community group buying platforms in Guosheng Securities, about 30-40% of SKUs are fresh produce, and 60-70% are daily necessities and general merchandise.**
**Fresh produce can't support all of community group buying; internet companies aren't just thinking about a few cabbages.**
Giants have different goals: e-commerce companies hope to further enter local life through community group buying, while local life companies hope to reach more users through the high-frequency, rigid demand of community group buying.
Subsidies will eventually stop, and suppliers are constantly feeling the threat of low prices. Food and beverage brands like Weilong, to maintain price stability, have issued notices prohibiting cooperation and supply to various e-commerce and community group buying brands.
There are both external worries and internal troubles.
On December 12, Meituan internally reported its first anti-corruption case in Meituan Select, with the head of the Shaanxi-Ningxia (Shaanxi, Ningxia) region detained. This is just the beginning.
**Group buying isn't a new concept, nor is community group buying new this year.**
As for why it's so popular this year, it's mainly due to the pandemic. In the words of "Lan Xi," this is passive disaster profiteering. The convenience that a group leader can solve doesn't require mobilizing all users to go out; at this time, community group buying mainly relies on community operations.
Group leaders with community WeChat groups originally played the role of KOLs. After giants entered, group leaders became tools for traffic generation.
**The platform's job is to buy the group leader's private domain traffic with commissions, while the group leader not only bets on their reputation but also plays the roles of courier, after-sales, and customer service.**
Over-reliance on group leaders is something platforms don't want to see.
As more people join as group leaders, their irreplaceability begins to weaken. After completing the traffic generation task, the KOL attribute of group leaders drops to the lowest. It's not ruled out that stubborn group leaders still choose to leave the platform and operate independently, but their numbers aren't enough to affect the direction of the entire community group buying.
After KOLs disappear, sociality also begins to disappear.
Community group buying, which started in communities and is loyal to group buying, is further abandoning communities:
**A life circle based on geographical, cultural, and lifestyle differences, centered around "service-people."**
**The reality is that platforms convert private domain traffic to public domain, densely deploy points, and cause group leaders to compete internally.**
Giants have turned the excellent business concept of community group buying into a melee. No one cares what services people in the community need besides buying things, nor do they care about the consequences of blind competition for the market.
# **-02-**
**The Ideal Community Group Buying**
On December 22, the State Administration for Market Regulation and the Ministry of Commerce jointly held an administrative guidance meeting to regulate the order of community group buying, proposing "nine prohibitions" to participating internet platforms including Alibaba, Tencent, JD, Meituan, Pinduoduo, and Didi.
The nine clear items almost cover all problems that have occurred, are occurring, and may occur in community group buying, with each sentence revealing the word "anti-monopoly."
In other words, community group buying can certainly be done, but if you only want to do it alone, that's your problem.
Internet companies, for their own interests, create convenience services and shouldn't be blamed for improving efficiency, as long as they don't ignore their social responsibilities, such as the small vendors who may face unemployment due to community group buying, or promoting regional industry standards for fresh produce...
The actual situation doesn't need to be elaborated.
**An industry can be seen as a trend by capital if it's either new demand, rigid demand, or high profit, low cost.**
Community group buying basically meets these conditions, except for the front-warehouse model represented by Hema; most community group buying models can operate with light assets. Buying vegetables and daily necessities is clearly high-frequency rigid demand, and no one will refuse better prices and closer pickup distances.
Besides consumer demand, production also needs the increment of community group buying.
It's hard for farmers to earn high income, and China's geographical environment isn't suitable for full mechanization like some foreign places. Small vendors and farmers with their small plots are still numerous in modern society.
So when community group buying is hot, there are always voices worrying that vegetable vendors will lose their jobs, which makes sense, but this worry also has a hint of being generous with others' money: Can vegetable vendors only earn this hard-earned money for life?
If giving up the vegetable market stall offers a chance to earn more, few small vendors would refuse. The current problem is that internet companies doing community group buying haven't thought much about the survival of these vendors and the farmers behind them, which is the fundamental reason they're being criticized.
Fresh produce and agricultural products, due to their perishable nature, have low e-commerce penetration. Although Pinduoduo's entry has driven agricultural e-commerce to some extent, overall, the supply chain challenges facing fresh produce are far from solved.
JD, which has relative advantages in supply chain, might know its position well. While investing 700 million in strategic investment in Xingsheng Youxuan, it also emphasized that it mainly wants to do technology and supply chain services, and "replacing them" isn't the goal.
JD hasn't offered more plans or prospects, and like all e-commerce platforms, it feels powerless facing the huge and heavy agriculture.
Technological upgrades and business model innovation aren't achieved overnight; one generation can't completely solve problems that have existed for thousands of years.
In 1988, the Ministry of Agriculture proposed the "Vegetable Basket" project to ensure residents have fresh vegetables all year round. By 1995, the second phase of the Vegetable Basket project began, focusing on upgrading facilities, scale, and regionalization. After entering the 21st century, the term frequently mentioned with agricultural products is "pollution-free," and China's per capita vegetable consumption has long ranked first in the world.
It's clear that the "vegetable basket" has always been a major national concern. Ideally, community group buying can elevate the efficiency of buying vegetables to a historical height, provided that the efficiency of growing and transporting vegetables also improves.
**Community group buying, which claims to reduce middlemen, actually just wants to be a middleman platform. They have no ideals, so naturally there won't be an ideal community group buying.**
# **-03-**
**Community Group Buying Beyond Selling Vegetables**
**Fresh produce and daily necessities with high repurchase rates are still considered the biggest foothold of community group buying, as if community group buying can't be called that without selling vegetables.**
Looking beyond material life, vegetables and fruits are indeed necessities, but not the only ones. Just as looking beyond the vegetable market reveals community group buying, looking beyond fresh produce can reveal broader horizons.
Vegetable market vendors earn hard money, and fresh produce group buying earns hard money in another sense. No matter how fresh produce competes, its premium won't be high, especially after anti-monopoly measures, relying solely on imagination won't work.
So what products have relatively high premiums, low loss rates, and huge imagination space?
Apart from real estate and other industries unsuitable for e-commerce, the most imaginative industry is the cultural industry, or extending this concept to entertainment, leisure, and all non-material spiritual consumption fields.
For example, selling movie tickets has a much lower loss rate than selling vegetables. It's not to say community group buying should sell movie tickets, as group buying for movies and performances has already matured on platforms like Meituan for years.
**The rise of Pinduoduo has reminded the capital market of the needs of the lower-tier market; there's still much to make up and improve in material life.** Similarly, the capital market sometimes lacks imagination about the spiritual life of the masses, even knowing nothing about it.
A few years ago, before local mobile games became popular, many stubbornly believed that besides Tencent, China's game market could be ignored.
Later, a slightly exaggerated phrase was used to summarize the ignored county-level games: Half of China's gamers play "Honor of Kings" and "PUBG," and the other half play local chess and card games.
Those small games not found in app stores support half of the lower-tier game market.
These games are hard to unify on one platform; for example, mahjong has different rules in Changsha, Sichuan, Guangdong, Wuhan, and Hangzhou. These games also don't rely on publicity like big company games; they use a promotion model that outsiders find baffling: ground promotion.
Players form groups based on WeChat groups of acquaintances, relying on trusted group owners to send room cards and links to start games; strangers can't easily match with players. At that time, many group owners earned over 10,000 yuan a month by selling room cards.
With high-stickiness social circles and a group owner with connections and reputation, county-level games' mastery of private domain traffic unintentionally surpassed community group buying, which only focuses on selling vegetables.
Fresh produce has regional characteristics, and spiritual and cultural life also has regionality, requiring community-based teams to drive it.
Currently, group leaders and communities in community group buying have become completely tool-like, replaceable at any time. Platforms that absorb a lot of traffic can only rely on price wars to maintain so-called "stickiness."
Community group buying could have relied on various community life scenarios and social interaction to maintain stickiness, but it stubbornly focuses on price sensitivity, throwing the word "community" aside.
Therefore, apps like Tangdou, designed for square dancing, found opportunities. Taking Huawei AppGallery as an example, its downloads have exceeded 200 million. Users can find nearby square dance teams based on location, and the platform also sells low-priced paid courses.
Like county-level games, Tangdou can only rely on WeChat groups to activate community teams, which is a natural weakness of such apps; without WeChat, they can hardly survive long.
Entertainment apps in the lower-tier market may not be able to leave WeChat, but internet giants have this potential, but they only care about order volume and transaction value, ignoring everything except users' material life.
This impatient mentality pulls community group buying back to the old path of "buy more, earn more," making it neither a giant nor unique.
The People's Daily commentary about thinking about a few cabbages means exactly this.
Beyond cabbages, there's a world; beyond material, there's spirit. This might be the most likely channel for business model innovation and technology helping life.
# **-04-**
**Conclusion**
The various cases of community group buying prove that all internet giants have limitations when reaching consumer terminals.
The elite class is surprised by Pinduoduo's popularity, only knowing it's a trend. The investment mindset and perspective of outsiders make it hard for internet companies to grasp the pulse of the lower-tier market.
Only those who have actually worked the land know how hard it is to farm; only those who truly move between communities know what communities lack.
White-collar workers in high-end office buildings can't do digital agriculture well, and similarly, those who only eat takeout and company cafeterias can hardly understand the lives of those who buy vegetables daily.
Source: Ginkgo Finance (ID: yinxingcj), Author: Feng Qianyu
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