△Add friend and note "inspection" to register People often say that fashion is a cycle, and business is no different? Source: Retail Boss Internal Reference (lslb168), Author: Sun Yuan, Editor: Wan Deqian. This article is reprinted with authorization; please contact the original author for reprints.
Core Guide:
Is community group buying really as good as it seems?
Compared with other vertical e-commerce and offline channels, what are the advantages and disadvantages of community group buying?
Where are the opportunities for community group buying? It seems that whenever the traffic dividend of an era ends, people turn their attention to the community, a naturally gathering place for people. Community group buying is not a new thing. Although a large number of people believe that Pinduoduo drove the sudden outbreak of community group buying, in terms of the form of group buying, unlike the "group purchase" action in Pinduoduo, most current community group buying is more similar to Juhuasuan's form, where buyers directly purchase at a set discount price, with the condition that buyers are divided by community and have clear geographical attributes. Currently, community group buying mainly uses WeChat groups or mini-programs to establish sales channels, with batch delivery and offline self-pickup. The offline nodes for product transfer are divided into two forms: one is individuals with social attributes such as community mothers, and the other is natural offline scenes such as shops around the community. Taking fresh produce, the most frequent household consumption, as a typical example, the core logic behind community group buying attracting a large number of entrepreneurs and capital is that compared with traditional channels, it greatly reduces fulfillment costs in terms of traffic acquisition, product loss, logistics, and labor, and is highly replicable. For a time, a "thousand-group war" seemed imminent, but is this business really as good as it seems? Not necessarily. 1 What are the hard flaws of community group buying? If the concept of community is removed, this business model is no different from existing group-buying e-commerce. Apart from the natural traffic dividend of the community, the reduction in fulfillment costs is mainly achieved through a pre-sale system, so some in the industry believe that community group buying is a micro-innovation based on channels. The sustainability of the group-buying model itself is questionable. Feng Weidong, managing partner of Tiantu Capital, believes that group buying is only a means, and ultimately it must return to the platform's product categories, channels, and other attributes. "The thousand-group war had no survivors. Even Pinduoduo will eventually return to the question of what it sells, whether it is a comprehensive e-commerce or a vertical category e-commerce, rather than saying it is a group-buying e-commerce," he said recently at an industry event. Take Meituan, the biggest winner in the group-buying market, as an example. "Retail Boss Internal Reference" (WeChat ID: lslb168) found that its recently disclosed Q3 2018 financial report showed that among the 19.1 billion yuan in revenue during the reporting period, the core businesses that contributed prominently were Meituan Waimai, which accounted for nearly 60%, and in-store, hotel, and travel revenue. Although it started with group buying, in the current business landscape, core sectors such as food delivery and hotel and travel have hardly any trace of the group-buying model. (Meituan Q3 2018 financial report) If group buying itself can serve as a business module but is not enough to support a platform system, then the question we need to explore is: how competitive is an e-commerce platform that relies on the group-buying model in the community scenario, and can it form a barrier? Community group buying currently focuses on fresh produce and household daily necessities, and many platforms are also expanding their SKUs. On the C-end, it attracts consumers with low prices and high quality, and builds trust through recommendations from acquaintances under the community bond to promote high-frequency consumption. Generally, fresh produce is shipped directly from the place of origin and delivered the next day to ensure quality while reducing intermediate losses and costs. So, first, does community group buying have more expansion opportunities in terms of categories? Fresh produce is a good partner for community group buying platforms, and we won't repeat that. Let's focus on the difficulty of expanding into other categories. At a time when vertical e-commerce is relatively mature, access to consumption channels is extremely simple, and e-commerce platforms frequently create shopping festivals, so users have formed the habit of bulk stocking during promotions. Except for fresh produce, the consumption frequency of general consumer goods such as household daily necessities is much lower. Although there is demand, the lower frequency does not give a clear advantage in terms of platform scale, which is crucial for group buying. Many social group-buying platforms that promote the "mother group leader" model try to test beauty products, but it may not be suitable. Community group buying has a characteristic: the group leader actively recommends, and each group leader typically corresponds to hundreds of potential users. In contrast, beauty social e-commerce is characterized by KOL leadership, plus a large number of users spontaneously planting grass, because beauty products are highly personal and require a large number of users' objective opinions to drive social attributes, which is exactly what one-to-many community group buying lacks. Second, is the low-price and high-quality of community group buying competitive? In categories such as fresh produce, where the traditional supply chain is long and products are difficult to standardize, the pre-sale system and direct-from-origin shipping similar to community group buying can bring intuitive advantages in price and quality. However, in the field of ordinary consumer goods with a high degree of standardization, the advantages of community group buying through shortened supply chains and bulk purchasing are not necessarily greater than those of other e-commerce platforms. Third, from a social attribute perspective, is community group buying competitive? Community group buying indeed captures the two groups with the strongest social attributes: mothers and convenience store owners. These two groups have relatively free time. Convenience stores, for business needs, actively build closer relationships with residents and can basically cover the entire community. Mothers are easy to form social relationships because of common behaviors (walking children, community nurseries, etc.), and their purchasing ability and willingness are strong. However, this social relationship based on strangers' daily behaviors is relatively weak. Unlike the KOL-driven form of social e-commerce, the group leader's persuasion is not strong beyond product attributes, and there is insufficient promotion for products with stronger personalization and higher unit prices. Unlike e-commerce platforms such as Xianyu, which are based on geographic location transactions, offline inspection, and online payment, community group buying requires payment before receiving goods, which weakens the trust system between buyers and group leaders. Currently, most players use instant compensation to eliminate negative reviews, thereby avoiding large-scale trust crises within the group-buying system. Finally, in terms of C-end convenience, how does community group buying fare? In terms of logistics, since group-buying e-commerce generally uses a pre-sale system, goods are usually delivered the next day or after several days, with timeliness between community convenience stores and e-commerce platforms. However, because it adds the step of offline self-pickup, it is actually less convenient than e-commerce platforms that deliver directly, but it is still better than large supermarkets and markets. Based on the above, it is not difficult to find that although community group buying has consumption scenarios and demand, it may not be the optimal solution from various angles, especially in the current era of extremely rich consumer channels. However, the fact that community group buying has received favor from many capitals means that the above comprehensive considerations have been made. So from which angles is community group buying most likely to form its own track? 2 Non-standard products, lower-tier markets, supply chain: the "get-out-of-jail-free card" for community group buying From the table above, we can easily see several characteristics:
Nearly half of community group buying projects are incubated internally by enterprises;
The enterprises incubating community group buying projects are basically related to B2B or community store businesses;
In addition to Changsha, the "central battlefield" of community group buying, the Jiangsu, Zhejiang, and Shanghai region is also a key area; The first possible form is as an expansion business for convenience stores. Just as chain convenience stores expand into fresh food, during the wave of community O2O, there was a trend of adding fresh produce SKUs to mom-and-pop stores. This model used the store as a warehouse, with the platform supplying goods to the small store, and after consumers placed orders, the platform or the store owner delivered. But it ultimately failed due to high fulfillment costs. In the community group buying scenario, with the pre-sale system and in-store self-pickup, the consumption process is reversed, and the store owner does not need to bear fulfillment costs. As a new increment to the existing business system, the group buying business not only brings additional income to the store owner but also attracts customers to the store for secondary consumption. The convenience store additional model has a greater advantage over the mother group-buying model in that, for the platform, whether or not it has a supply chain system, each additional group-buying point requires building a new link. However, convenience stores themselves need daily supply channels. If the convenience store can be integrated into the platform's supply chain system, combining daily supply and group-buying transportation into one, the reuse of the supply chain link will save a lot of costs. Compared with individuals, convenience stores also have more suitable storage conditions, providing more quality assurance for community group buying that focuses on fresh produce. In terms of categories, for community group buying, nothing is more suitable than non-standard products. For a long time, mass consumer goods have formed a stable and efficient industrial chain. Whether in terms of channels, cluster effects, or first-mover advantages, community group buying has no chance against other business forms. We have already stated the complementarity between fresh produce and community group buying, so we won't repeat it. In addition to vegetables and fruits, short-shelf-life products such as fresh milk, semi-finished clean vegetables, bread, and cakes are also very suitable for community group buying. The broadest imagination space lies in the lower-tier markets. Wang Wei, chairman of Fresh Legend, once said that the future of China's new retail will definitely be a comprehensive industrial cluster around the community, with fresh produce being the most high-frequency and rigid demand part. As evidenced by the fact that the hottest area for community group buying this time is Changsha rather than Beijing, Shanghai, Guangzhou, or Shenzhen, due to the influence of urban planning and residents' lifestyles, residents in second- and third-tier cities have both consumption capacity and willingness in the family scenario. With urban renewal, traditional channels such as wet markets and small stalls are gradually shrinking, replaced by community-based fresh produce specialty stores and large supermarkets. However, supply is far from meeting demand. In cases where the reach of fresh produce e-commerce networks and the transformation of fresh produce supply chains are not as advanced as in first-tier cities, the lower-tier markets have a strong demand for community group buying, which offers high cost performance and a certain degree of convenience. Whether it is community group buying or other forms, the essence of business is to maximize benefits. As merchants, they will inevitably pursue cost reduction and price increase, and the business model will shift from decentralization to intensification. At present, community group buying merchants are also focusing more on supply chain construction while expanding their territory. Whether based on convenience store groups or individuals such as mothers, the future of community group buying requires the pre-positioning of stores/warehouses. "Retail Boss Internal Reference" (WeChat ID: lslb168) believes that the future of community group buying will inevitably be an intensive supply chain war. In the vast lower-tier markets of second, third, and fourth-tier cities, the community scenario will not be dominated by a single player. Whoever can maximize the scale effect will have more opportunities to harvest high-quality markets. The 10th B-end E-commerce Inspection - "From Products to Scenes" Event time: December 10-13 Event location: Wuhu, Nanjing, Changsha Event process:
Morning of December 10: Visit Three Squirrels headquarters + Toupin Store
Afternoon of December 10: Visit Nanjing Squirrel Small Store
Evening of December 10: Visit Nanjing Master Gao Beer Workshop Store
All day December 10: Nanjing-Changsha, or free arrangement
Morning of December 12: Community group buying exchange salon
Afternoon of December 12: Kaola Selection Hero Alliance launch event
Night of December 12 to early morning of December 13: On-site inspection of Kaola Selection logistics center - This time period is the peak of warehouse sorting, allowing direct observation and learning of the back-end operation process of community group buying e-commerce Welcome interested distributor friends to join us to understand and inspect on-site: Organization form 1. Big-name exchange salon************2. Company visit
. On-site explanation 4. One-on-one communication************5. Actual market case visit Friends who want to participate can register separately if they are interested in the content of a particular day. Long press this QR code or click "Read Original" to register in one click! Add friend and note the purpose -END-