---
title: "Interview with Koala Selection Founder Tang Guangliang: 90% of Community Group Buying Will Be Eliminated in 2019"
description: "Koala Selection founder Tang Guangliang recently gave an interview to MingTang New Business Media, sharing his insights on community group buying and his company's development strategy. He believes the current chaos in community group buying is just beginning, with 90% of companies expected to be eliminated by 2019, leaving only Koala Selection and Xingsheng Youxuan to compete in Changsha."
author: "模式达人"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2018-12-05"
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# Interview with Koala Selection Founder Tang Guangliang: 90% of Community Group Buying Will Be Eliminated in 2019

> Koala Selection founder Tang Guangliang recently gave an interview to MingTang New Business Media, sharing his insights on community group buying and his company's development strategy. He believes the current chaos in community group buying is just beginning, with 90% of companies expected to be eliminated by 2019, leaving only Koala Selection and Xingsheng Youxuan to compete in Changsha.

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**Tang Guangliang**
Koala Selection founder Tang Guangliang recently gave an interview to MingTang New Business Media, sharing his insights on community group buying and his company's development strategy. He believes the current chaos in community group buying is just beginning, **with 90% of companies expected to be eliminated by 2019, and the remaining 10% will engage in fierce next-round competition. In Changsha, only Koala Selection and Xingsheng Youxuan will remain in a two-player battle.**
Compared to Xingsheng Youxuan, Koala Selection started later, officially launching on July 7 this year. Its growth has been rapid: according to company data, by August 8, it had over 1,000 group leaders and daily GMV exceeding 300,000 yuan; by September 1, it expanded to Zhuzhou, with over 1,500 group leaders and daily sales exceeding 400,000 yuan. In July, it received 20 million yuan in angel investment from Galaxy Creation; in October, it secured 30 million yuan in Series A funding led by Tuode Capital. It is also reported that Koala Selection's next round of financing is already underway, with nearly 100 million yuan expected to be finalized within the year.
Koala Selection's speed reflects the booming development of community group buying. Since the second half of this year, when community group buying companies began disclosing funding, keen capital has been frantically racing to invest in this track. According to MingTang New Business Media, dozens of community group buying companies have received investment, with total funding reaching billions of yuan.
****************01 About Community Group Buying****
**Today's Hundred Regiments War differs from the one during Meituan's era eight years ago. That was pure e-commerce group buying; now it involves pickup points, sorting centers, and supply chain integration.**
When discussing community group buying today, many recall the Hundred Regiments War of eight years ago and consider it a dead end. However, they may overlook that today's community group buying is fundamentally different from the group buying of eight years ago.
Back then, group buying mainly involved internet entrepreneurs using online methods to attract customers to physical merchants at discounted prices. Merchants were besieged by numerous group buying companies, but the influx of customers overwhelmed their capacity, leading to poor customer experiences. Meanwhile, merchants' gross margins dropped rapidly, especially in the early days, as most customers were group buying customers. This led to a gradual shift, with merchants choosing to cooperate with only one or two group buying companies, often with time and quantity limits. After the trend faded, customers' enthusiasm for group buying also waned.
Today's Meituan has transformed and is no longer the same business model. Today's community group buying is still significantly different from the group buying of that era. Tang Guangliang emphasizes that if eight years ago group buying was about directing online traffic offline, today's community group buying directs offline traffic online. Moreover, back then traffic costs were acquired through burning money, while today's customer acquisition costs are nearly zero, as they are accumulated by group leaders.
More fundamentally, the current operation is not pure e-commerce. Group buying companies are heavier, requiring supply chain integration and management, as well as sorting centers and pickup points. In Tang Guangliang's view, community group buying has proven profitable in the fresh produce sector, which is the hardest to e-commerce, demonstrating its strong vitality.
**The best entry point for community group buying is fresh produce, and it requires full-category operation.**
Fresh produce is an area every retailer wants to enter. Vegetables and fruits are daily necessities for consumers, making them the best products for attracting customers and driving repeat purchases. Many institutions have explored this from different angles, but a mature model has yet to emerge. A key reason is the high transportation costs and product loss.
Traditional fresh produce transportation involves shipping from origin to city warehouses, then "last mile" delivery to consumers. Due to time and freshness requirements, air, high-speed rail, and specialized cold-chain transport are needed, along with dispersed delivery, leading to high costs. Additionally, multiple transfers during transport make quality loss unavoidable.
Community group buying has found a way: it operates on an order-based model, purchasing based on sales, reducing inventory backlog, and delivering by community, with fewer intermediate steps and concentrated delivery areas, significantly reducing loss. Tang Guangliang says community group buying delivery is very fresh, reaching customers within 10 hours. Suppliers deliver directly to sorting centers, then to pickup points, with very short transport times and no need for cold storage.
It is understood that fresh produce currently accounts for an average of 40% of community group buying companies' products, but Koala Selection aims for 60%. Tang Guangliang explains they not only offer vegetables and fruits but also plan to include fish and meat in full-category fresh produce.
****************02 About Development Trends****
**Next is the capital war, where founders with industry experience will have an advantage. Under current economic conditions, capital will further focus on leading companies.**
Recently, Tang Guangliang has met many investors, each with different purposes—some to evaluate his project, others to learn about the industry and competitors. He says many capital players have already targeted this track, and their entry will break the early small-scale development model. Community group buying will enter a capital war, where competition will mainly reflect companies' financing capabilities.
Tang Guangliang analyzes that one key reason Capital Today's Xu Xin invested in Xingsheng Youxuan is that Chairman Yue Lihua has over a decade of experience in traditional convenience stores, being hardworking and practical. Looking at Xu Xin's investment in JD.com, founder Liu Qiangdong's experience selling computers in Zhongguancun cannot be ignored. Therefore, in this round of community group buying competition, startup teams like ours with convenience store experience are more favored by capital.
Given the current economic uncertainty, capital investment strategies will change. They will learn from past lessons and no longer spread investments thinly, but concentrate on leading companies.
**Among the four types of community group buying companies, the convenience store chain type is most likely to enter the first tier.**
Community group buying is extremely hot now, with new entrants possibly every day. Changsha has experienced battles among over a hundred community group buying companies. Nationwide, there are over a thousand. Competition is becoming intense. By background, current players can be divided into four types: convenience store B2B background, e-commerce technology background, fresh e-commerce background, and startups. These players have distinct strengths in team genes, supply chain capabilities, and management capabilities.
In Tang Guangliang's view, the core logic of community group buying is the "supply chain + store pickup points + group leaders" model. Its underlying logic is not just e-commerce but comprehensive operational capabilities, ultimately landing on supply chain and group leader management. Teams with convenience store genes have already passed the test of store management and product distribution. For teams with other backgrounds, they need to overcome these challenges anew.
****************03 About the Changsha Battlefield****
**The main battlefield for community group buying is Changsha; to win, you must first win the Changsha market.**
This city has nurtured the innovators of this round of retail innovation. Retail innovation has always been a focus of society. Tang Guangliang says that as early as 2015, to supplement convenience store categories and achieve the goal of making convenience stores easy to profit, they tried delivering vegetables and fruits to convenience stores, connecting upstream and downstream for joint procurement and distribution. However, they found it unsustainable due to low demand, high loss, and disconnection between upstream and downstream. Now, through the community group buying model, this can be easily accomplished. In a sense, Koala Selection supplements the fresh produce category for convenience stores.
In fact, as early as 2014, Changsha began to see community-based group buying platforms at scale. Some operated as team selling, using WeChat groups to sell fruits from origin. During this period, some community physical stores emerged, such as Yunchu and Xi Guanjia, invested by Jiajia Food, stirring the sector. A group of people hard-earned the exploration of community group buying. Today's Xingsheng Youxuan also started in 2014, undergoing four iterations over four years.
Tang Guangliang believes that through consumer education and market exploration by multiple community group buying companies, the Changsha market has become a high ground for community group buying and a strategic location. Like in war, you must first occupy the high ground to win the entire battle. In this sense, to win in this competition, community group buying companies must first conquer Changsha. Winning Changsha is a prerequisite for winning nationwide.
**Community group buying could be a trump card for Hunan Province; companies should develop together.**
Hunan is a land of outstanding people. In the new era, many outstanding internet entrepreneurs and investors are from Hunan, but few well-known internet companies have grown locally. This time, community group buying originated in Changsha, giving it a first-mover advantage. Tang Guangliang hopes the Hunan provincial government will pay sufficient attention to this new business force and provide support. He also hopes Hunan-based investment institutions will pay more attention to excellent local community group buying companies and support their growth.
**********************04 Koala Selection Strategy******
**Not entering Beijing, Shanghai, Guangzhou, or Shenzhen; focusing on second- and third-tier cities.**
Expansion is the main theme for community group buying companies.
Scale competition is the first round in this community group buying competition. Companies without strength will lose in this land-grab phase. All funded community group buying companies regard market expansion as their most important strategic move.
Without scale, there is no revenue, let alone supply chain advantages. Achieving scale is also what capital expects and is the foundation for growth. So, how does Tang Guangliang plan this move?
Koala Selection will focus on second- and third-tier cities. Tang Guangliang reveals that by March 2019, Koala Selection aims to cover major provincial capitals nationwide. However, in the first phase, it will not expand to Beijing, Shanghai, Guangzhou, or Shenzhen, nor will it go deep into county towns.
Relying on the rich resources and large user base of the three convenience store brands "Kuailehui, Xingaoqiao, and Koala," they significantly save on ground promotion costs and achieve high group leader conversion rates. Tang Guangliang says over 10 years of retail experience, comprehensive warehousing and logistics support, and a strong supply chain system can support Koala Selection's rapid development.
Currently, Koala Selection has over 900 group leaders in Changsha, and the number is still growing. Tang Guangliang hopes to lead in the number of group leaders in Changsha by January 2019, as it is the main battlefield.
**The ultimate PK is between Koala Selection and Xingsheng Youxuan.**
Looking at the present from the future, in Tang Guangliang's mind, community group buying will also see a dragon-tiger struggle like other fields. During the convenience store era, he had a 10-year tug-of-war with Yue Lihua. Now, on a new track, they will compete again.
Clearly, only 10% of community group buying companies will survive, while 90% will be eliminated within the next year. Although the entry barrier seems low, it is actually rising. Companies that cannot keep up with national expansion or expand slowly will be acquired or eliminated.
In Tang Guangliang's view, Koala Selection and Xingsheng Youxuan have several significant advantages over other peers: First, they both empower convenience stores, helping store owners earn more; Second, numerous offline stores give them a natural advantage in recruiting group leaders; Third, they have rich store management, supply chain, and logistics systems; Fourth, their founding teams have hands-on industry experience. These traits will help them run faster on this track.
Who will be the ultimate king of community group buying? Let's wait and see; time will tell.
Source: MingTang (ID: MingTangHN)
**10th B-end E-commerce Inspection -- "From Product to Scene"**
Event Dates: December 10-13
Locations: Wuhu, Nanjing, Changsha
Agenda:
> Morning of Dec 10: Visit Three Squirrels HQ and Toupin Store
>
> Afternoon of Dec 10: Visit Nanjing Squirrel Small Store
>
> Evening of Dec 10: Visit Nanjing Master Gao Beer Workshop
>
>
>
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> All day Dec 11: Nanjing to Changsha, or free time
>
>
>
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> Morning of Dec 12: Community Group Buying Exchange Salon
>
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> Afternoon of Dec 12: Koala Selection Hero Alliance Launch Event
>
> Evening of Dec 12 to early Dec 13: Field visit to Koala Selection Logistics Center -- **This is the peak sorting period, offering direct observation and learning of the backend operations of community group buying e-commerce**
**Interested distributor friends are welcome to join us for understanding and field inspection:**
**Organization Format**
************1. Expert Exchange Salon************************2. Company Visit
3. On-site Explanation
4. One-on-One Communication************************************5. Real Market Case Visit************************
If you want to participate
You can register for individual days if interested
Long press this QR code or click "Read Original" to register!
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