Why enter the group store business? After multiple rounds of fierce competition and industry consolidation, large internet group buying platforms have gradually contracted. Once influential platforms such as Shixianghui, Xingsheng Youxuan, and Chengxin Youxuan have either reduced their business scale or gone bankrupt. However, some small and medium-sized community group buying platforms originally operating locally are finding new ways out by opening 'physical stores'. Especially since this year, the expansion of group stores has accelerated significantly. Less than a month after withdrawing from Fujian's community group buying business, Xingsheng Youxuan reportedly entered the group store business. According to informed sources, Xingsheng Youxuan has established a group store business unit, making it one of its key strategic priorities for the next three years, with plans to open 100,000 group stores by the end of 2024. In addition, Xiaoxu Daojia has opened over 300 group stores nationwide, while Miaomeilin and Meilintao have each surpassed 100 stores. In April this year, Quantum Food announced the launch of its group store business, planning to open 100 offline stores in Zhengzhou. In March, Zhihua Zhiguo initiated its group store business, planning to open 1,000 stores nationwide. This rush into the group store model has revitalized the community group buying market, opening a new chapter. Looking back over the past three years, the nationwide pandemic led to mandatory restrictions on the movement of people and goods, spawning a large number of group leaders. As policies changed and internet giants reduced commissions, group leaders with resources 'sought their own paths', giving rise to new models such as group wholesale and group stores. For group leaders, the emergence of these new models not only provided new development paths but also changed their relationship with platforms. Through franchising, group leaders formed close cooperative relationships with platforms, forcing them to serve only one platform. Because of these advantages, an early community group buying entrepreneur told Lingshou that the rise of group stores, to some extent, compensates for the shortcomings of traditional community group buying models in attracting users and managing group leaders. However, despite some breakthroughs, the essence of the group store model has not seen much innovation. In the past, platforms like Qianxianhui and Zhihua Zhiguo had already implemented similar models, mainly providing last-mile services where neighbors order in WeChat groups and pick up at stores. The foundation of this model remains attracting users, and the core of attracting users is offering discounted products, such as five pounds of eggs for one yuan or ten pounds of potatoes for two yuan. Such low-priced products can attract more consumers to join. 'Through this approach, a well-performing group store can attract over a thousand people in a day,' said the early community group buying entrepreneur. The core of the entire process is that group stores are attracting people overlooked by the internet, such as older consumers. Compared to traditional community group buying models, emerging group store platforms typically do not use tools like Kuaituantuan to collect orders and aggregate data, but instead directly solve problems within WeChat groups, catering to the habits of elderly consumers. This approach saves time from opening various apps, allowing users to order directly in WeChat groups. At the same time, consumers do not compare prices online; as long as prices are cheaper than offline supermarkets, they gain approval. Thus, in a short time, they 'capture' a large number of elderly consumers. In terms of operation, group leaders post 3-5 product categories daily in WeChat groups, consumers pre-order through group relay, and pick up at stores the next day. While picking up, stores also sell daily necessities. The entire process involves group leaders locking in users with special-priced items and then providing daily necessities to increase store revenue. This format is not new; early platforms like Dailuobo and Yipin Daojia had similar attempts. However, the question is: can group stores revitalize community group buying? Difficulties Despite the current high popularity of group stores, many industry insiders told Lingshou that group stores will not become the mainstream approach. They believe the group store model faces three main problems: limited SKU count, complex supply chain systems, and a specific consumer base. Group leaders update 3-5 products daily in WeChat groups and use relay sales. This method not only limits the variety of products but also subtly increases the complexity of product selection. Due to category limitations, sales growth quickly hits a bottleneck. Looking at current fresh food e-commerce, front warehouses, and even home delivery services, they all pursue full-category and combination strategies, continuously creating more traffic guidance through product combinations to enhance user stickiness and attract new users. However, with only 5 products per day, the group store operation method is somewhat 'contrary to common sense'. The limitation on product variety undoubtedly increases the difficulty of product selection. At the same time, sales growth faces significant challenges. Once a round of traffic attraction is completed, sales may stagnate. Most group store consumers are price-sensitive elderly people with limited purchasing power, placing more emphasis on cost-effectiveness. This means the group store model cannot adopt a curated model, as it would limit average order value and further reduce sales. With limited SKUs, the depth of the supply chain becomes even more critical. Product selection must simultaneously possess market popularity and profit margins, meeting consumers' daily needs while ensuring group leaders' profits. Group stores can effectively attract traffic at relatively low cost, quickly 'harvesting' in residential areas or communities. However, when development enters a stable phase or during off-seasons, weaknesses in the supply chain immediately expose themselves, and product variety cannot sustain continuous sales growth. Faced with this situation, group stores can only adjust product categories, continuously trying and correcting to achieve sales improvement. If they want to quickly increase sales, they need to rapidly expand product variety or carefully select products. However, selecting products is not easy because consumption habits vary by region, making it difficult to find products suitable for all regions. Additionally, expanding product variety will trigger inventory management issues, undoubtedly bringing new challenges to overall operations. The aforementioned early entrepreneur told Lingshou: 'With five products a day, you need over 2,000 a year; considering repeat purchases and group openings, you probably need over 1,000 products.' Therefore, attracting new users is not the challenge; the challenge lies in the supply chain behind it. Without a strong supply chain, the group store model cannot be sustainable. Furthermore, regarding the consumer base, the current main target for new user acquisition is the elderly, but in household purchasing, the primary role still belongs to mothers. Perhaps by capturing the mother user group, the group store model still has a glimmer of hope and development. Overall, operating group stores is not a good business; it requires extremely high team capabilities. Not only does the team need strong product selection abilities, but also operational and franchise recruitment capabilities. Will it eventually explode? The underlying logic for group stores becoming one of the industry's transformation models is that it adjusts the relationship between platforms and group leaders, which is its main difference from traditional community group buying models. In the group store model, the role of group leaders changes from pure sales to platform franchisees, binding the platform and group leaders through store formats, and the profit model shifts from earning sales commissions to utilizing the price difference between purchase and sale. According to reports, Quantum Food requires new group leaders to pay a 5,000 yuan fee to headquarters, with 1,000 yuan for store decoration and materials and 4,000 yuan for purchasing products to attract customers at opening. Xingsheng Youxuan's entry into group stores also claims to adopt a fission model, where each fission yields a one-time service fee to the superior parent. Especially in third- or fourth-tier cities, group leaders receive recruitment ads like 'Open a store for 20,000 yuan, recoup investment in two months'. This model can attract a large number of group leaders and consumers in a short time, but it harbors potential risks. The risk of group stores lies in the high difficulty of the model itself. 'The market's capacity for group store brands is inherently limited; a city might support hundreds of group wholesale operations, but cannot sustain ten or twenty group store brands,' said the aforementioned entrepreneur. Even if a large number of group wholesale operations 'fail', the market will not experience significant fluctuations because group wholesale does not owe group leaders commissions or supplier payments. However, once a group store model encounters serious problems or 'explodes', many franchisees will seek compensation. If similar issues occur repeatedly in the group store model, the market may fall into chaos. From another perspective, the group store model also has its unique advantages. First, it can concentrate a large number of orders, making sales more stable. This not only facilitates bulk sales but also makes it easier to cultivate and promote group buying brands. Second, by concentrating large orders, group stores can effectively manage inventory, reduce stockpiling and waste, especially helping large platforms clear inventory. For example, large community group buying platforms like Pinduoduo and Meituan generate large amounts of inventory due to stocking issues. If daily sales reach 8,000-9,000 orders, they typically stock up to 10,000 orders, potentially leading to 2,000 orders of excess inventory. 'Supplying to large platforms usually yields no profit, and if inventory issues are added, upstream supply chains feel enormous pressure,' the aforementioned insider told Lingshou. The group store model can handle this part of inventory, serving as a front warehouse in this model. A supply chain manager for a group store said that although they can help large platforms clear inventory, a key prerequisite is ensuring consistency in retail prices and product quality. Downstream group stores also conduct their own price and quality comparisons, fearing that if products are found to be overpriced, group leaders will resist. Overall, the group store model still brings new opportunities and challenges to the community group buying industry. It changes the relationship between platforms and group leaders and provides a new profit model. However, for group leaders and platforms, finding a balance in this model—fully leveraging its advantages while effectively managing risks—is the long-term solution.