Community group buying has always been controversial. Some describe the development of community group buying over the past two years as a "roller coaster," experiencing dramatic ups and downs, and we won't dwell on the process. In the eyes of most people, the current state of community group buying is: "Xingsheng is declining, Chengxin has collapsed, Duoduo is shrinking, Meituan is struggling, and Shihuituan can no longer open groups." Is this really the case? Are there still opportunities for brands and suppliers in the community group buying track? In our [Growth Amid the Pandemic] series of live streams, we invited an outstanding distributor—Chen Xin, CEO of Maichun E-commerce. Despite the repeated uncertainties of the pandemic, his business achieved 200% year-on-year growth this year! Yes, you read that correctly. In 2022, with the pandemic recurring, while most brands and TP (Tmall Partner) companies were at a loss, the brands operated by Maichun E-commerce achieved doubled growth. While marveling at this, let's see how Maichun E-commerce achieved rapid growth. It's not that the platform is failing, but that you haven't done well yourself In fact, the e-commerce industry has passed the traffic dividend period; it's no longer an era where anyone can fly by finding the right trend. Today, even the hottest platforms don't guarantee growth or profitability for everyone. At the end of 2020, community group buying became a hot trend. With capital sweeping in, a wave of brands and suppliers entered this track. At that time, everyone hoped to seize the opportunity and achieve growth. However, as policies tightened, within less than a year, the tide turned, and brands and suppliers began complaining about price chaos, losses, and lack of growth. Consequently, some started to withdraw or halt progress, even leaving the channel to distributors to handle freely without supervision. Then articles like "Meituan Select continuously withdraws from cities, community group buying has no winners" and "The great retreat of community group buying" appeared. Is that really the case? In fact, since this year, many brands have seen very good growth rates. From a supplier's perspective, platform traffic is increasing, supply chain standardization is improving, and activity formats are becoming more diverse... So, in the final analysis, have we deeply studied the community group buying platforms? Are we entering by following the crowd and leaving in a panic, or are we truly down-to-earth in studying the platform's traffic logic, supply chain characteristics, and doing business solidly? Clearly, for a considerable number of brands, community group buying has become an important new e-commerce channel. For others, look for reasons within themselves. So, it's not that the platform is failing, but perhaps you haven't done well yourself. Moreover, the platform has grown well this year, and structural adjustments to loss-making regions have gradually given the platform sustainable confidence. Think about it—isn't this the same logic as the wave of live-streaming company closures this year? Community group buying is a tough bone to gnaw, but it can be gnawed When it comes to community group buying, many think that price wars are the best way to quickly capture the market, but price wars are ultimately not a sustainable business. During the market expansion phase last year, appropriate price concessions were necessary. But this year, while achieving quality products at good prices, we need to seriously consider a key operational point in community group buying—"pit production" (sales per slot)—and also manage the supply chain well, which is decisive for many brands and suppliers. Let's see how Maichun E-commerce does it. First, community group buying is operable: Not only price, but activities, product bundling, etc., are all effective ways to increase pit production. In this regard, Maichun's operations team truly understands the essence of operations, impressing the platform with a series of creative plays. Rely on bundling to increase pit production. Increasing pit production isn't just about traffic; brands can also raise their average order value. Based on consumer shopping habits, bundling can sometimes not only increase your average order value but also improve product conversion rates. Currently, bundling is a very effective method in the condiment category and some personal care categories. Rely on activities to drive individual products, increase the frequency of brand activities on the platform, and invest costs into activities. This not only effectively raises your average order value but also drives sales of new products. So, truly shaping product appeal is the way to achieve sustained and stable growth. On the basis of already achieving good prices, how do you enhance your product's appeal? How do you increase your average order value through bundling and activities, ultimately boosting your pit production? Community group buying requires systematic operations based on the platform's model characteristics and consumer habits. Compared to the mature and formulaic operations of traditional e-commerce platforms, community group buying requires more innovative operations that think from the underlying logic. Simply put, this channel demands high operational standards. Otherwise, you won't be competitive, growth will be poor, and profitability will be ugly. Second, the community group buying supply chain is manageable: Many people dare not touch it, or the reason for retreat is the inability to solve supply chain issues. The seemingly difficult supply chain problems are actually controllable. While it's impossible to achieve zero loss or zero dead stock, they can be controlled within a reasonable range. Why do you think the community group buying supply chain is hard to manage? Because you haven't given it enough attention. Managing the community group buying supply chain with traditional distributor thinking won't work. Managing it with traditional e-commerce thinking won't work either. Community group buying is definitely the most difficult and professionally demanding supply chain in the e-commerce field. How does Maichun E-commerce do it? For the 5 brands they operate, they have a supply chain management team of over 10 people, with an internal ERP inventory management system. The team has gone through three major battles: the initial "fulfillment battle," then the "loss battle," and now the "dead stock battle." In their words, although there are still losses and dead stock, they are within controllable range. Moreover, with over 100 warehouses nationwide and a monthly volume of 20 million yuan, they conduct comprehensive inventory checks weekly, achieving an overall turnover days of over 20 days, and continuously compressing it. Which "bone" of community group buying has the most opportunity now? In the development of community group buying, Maichun E-commerce's logic is to match the purchasing logic model based on consumer psychology—impulse buying, planned buying, associated buying, or combined buying—within specific scenarios and specific shopping channels. This is the "scenario model." Chen Xin mentioned in the live stream: In the community group buying field, the demand for condiments and grain and oil is enormous, such as commonly used oil, salt, soy sauce, vinegar, rice, and other products. Why is the demand so large? From a category perspective, we found that the largest category on community group buying is fresh produce. What category is most closely related to fresh produce? Of course, it's condiments and grain and oil. People who buy groceries on community group buying are definitely those who cook, and those who cook will definitely buy condiments and grain and oil. Positioning your category layout around "people who cook" is also a good direction. From the demand background, with the pandemic recurring, many restaurants are either closed or bankrupt. Apart from work-related socializing, many people tend to cook at home. Even when restaurant dining is open, few people eat there. This year, I noticed a detail: on the way to work, more and more office workers carry lunch bags, and the line for microwaves in office parks at noon is growing. It's not hard to see that more people are cooking at home, and condiments are an essential staple. Clearly, the demand for condiments and grain and oil has become evident. So we see that whether from category logic or demand background, it always revolves around scenarios. Consumer demand born in this scenario is bound to rise sharply. What is the "scenario model"? In simple terms, it's about analyzing a person's needs at a specific time, place, with whom, and synthesizing the pain points in that scenario to analyze their consumption motivation, purpose, and logic, then matching corresponding products. The sales promotion naturally follows. So, only with a scenario model can there be a sales promotion model. Achieve growth with an entrepreneurial mindset Many people think community group buying is hard to grow and not operable. But in Maichun's view, it's not the platform's problem; it's that their own operation methods are wrong, they don't understand the market enough, and they don't understand consumers, making the mistake of "treating the foot when the head hurts, and treating the hand when the foot hurts." So why can Maichun's community group buying grow against the trend? Before Maichun E-commerce, several business leaders had experience in FMCG and e-commerce. After founding Maichun, they didn't "rest on their laurels" but chose to go to the market. In their view, only by truly going deep into the market, constantly chatting with terminal store owners about sales, discussing strategies with platform partners, following delivery trucks to the channel, and talking with consumers about needs. Every year, the finance office has piles of reimbursement forms, all from business colleagues' travel expenses. As the saying goes, "No pain, no gain." Over six years, in terms of scale, Maichun has moved from the entrepreneurial stage to the maintenance stage. But it seems the company's employees are still like the first year of entrepreneurship. In their words, "We are always looking for the ultimate track, and we are still on the way." It's often said that "starting a business is easy, but maintaining it is hard." Where is the difficulty? Some say it's in management, persistence, or resources. These all seem reasonable, but we boil it down to one point: is your entrepreneurial mindset always online? That is, what we often call "never forget your original intention." Especially in the FMCG industry, which is ever-changing, the market is diverse and complex, product cycles are constantly iterating, and market trends are also constantly shifting. Remember, growth is always our core priority. Finally, let's summarize: Community group buying is a victory of the model. "People, goods, and place" are indispensable. People are traffic and demand; in business, popularity is king—where there are people, there is everything. Goods are products and supply, with the core purpose of meeting consumer needs. Place is the platform, the trading venue for both supply and demand; the platform connects people and goods to form information flow. Only by linking these roles can the model have self-sustaining vitality. The current market landscape of community group buying is already very clear: Duoduo Maicai, Meituan Select, Taocaicai, and Xingsheng Youxuan—these four have stabilized. It's already difficult for new entrants to come in. So, the successful model of community group buying has already emerged. The next step is how to find incremental growth within the existing stock. Maichun's operation model is worth our reference and learning. Finally, I'll leave you with a saying to encourage us all: There is no off-season market, only off-season thinking; there is no market in the pandemic, only thinking in the pandemic. Don't sit idly by during the pandemic! At the same time, Maichun E-commerce's brand agency operation business is also recruiting this year. Currently, they only finely operate 5 brands nationwide, with monthly sales of 20 million yuan. This year, they plan to expand to 2-3 more promising brands, helping brand owners sort out channels and do stable, sustainable business. They also welcome interested brands to communicate, study the platform together, and achieve growth! -END-