"If you don't do it, someone else will. If others do it, not only will you lose your share, but you won't even get the commission." In mid-January, Wu Xinglai (pseudonym) joined the promotion team for Duoduo Maicai in Jinshan District, Shanghai. Starting from Wuhan and now moving to Shanghai, he has accumulated considerable experience in customer acquisition and is ready to make a big push. During an interview, Wu Xinglai shared some "customer acquisition tips" with a reporter from Beijing News' Shell Finance, claiming they never fail. In his daily work, he not only teaches shop owners around residential areas how to become group leaders but also provides instructions on "how to close a shop." Ground promoters like Wu Xinglai were deployed in large numbers across Shanghai districts in January. As of the time of writing, a check of the Duoduo Maicai platform by Beijing News' Shell Finance reporter found that it had entered Minhang, Yangpu, Jiading, Pudong New Area, and other districts in Shanghai. Meanwhile, it has also launched in first-tier cities Guangzhou and Shenzhen, signaling its entry into first-tier cities. Duoduo Maicai is not alone in this ambition. On January 25, Meituan Youxuan officially launched in Beijing, with initial group leader pickup points covering parts of Chaoyang and Tongzhou. It had already entered Guangzhou and Shenzhen earlier. Shihuituan is also quietly laying out its Beijing market. However, expanding in big cities is not easy. According to reporter interviews, under the ground promotion offensive, group leaders have sprung up everywhere, but order volumes are pitifully low. Community group buying continues to advance, and as giants' battlefires spread to first-tier cities, the best may be yet to come. -01- Duoduo Maicai Enters Pinduoduo's Shanghai Stronghold Ground Promotion Earns 50 Yuan per New Recruit Wu Xinglai, who recently joined the ground promotion team, sees this Spring Festival as a golden period for Duoduo Maicai's promotion in Shanghai and plans to work until the festival and then return home to find another job. Since there are no shared bikes in his area, he can only visit about twenty shops a day, but it's no problem to get over a dozen people to successfully register as group leaders. "After all, currently only Duoduo Maicai is making an effort in Shanghai." Wu Xinglai's income currently comes in two ways: one is daily settlement plus monthly settlement, where each successful invitation of a group leader to register earns 30 yuan, settled the next morning. At the end of the month, if the number of new registrations meets the requirements, he can earn an additional 40 yuan per order. The second way is a flat 50 yuan per new group leader, also settled the next morning. "Duoduo Maicai currently has no order volume requirements for ground-promoted group leaders in Shanghai. As long as they successfully register, they get paid, regardless of whether they can receive orders." In his view, this is a good way to make quick money. In late January, Duoduo Maicai launched in Shanghai, marking the entry of community group buying, which previously focused on lower-tier cities, into the home base of Pinduoduo, the parent company of Duoduo Maicai. He Shuang (pseudonym) is currently a first-level agent for Duoduo Maicai's ground promotion project in Shanghai, responsible for recruiting ground promoters. He revealed that Changning, Jiading, and Fengxian districts have initially completed customer acquisition (inviting merchants to join), and they are currently developing Pudong New Area. In his view, thanks to the promotional foundation in other cities, customer acquisition in Shanghai is not difficult. "Shanghai residents have long been envious of community group buying in other places, mainly because the products there are very cheap." According to He Shuang, on January 12, after completing the construction of its Shanghai distribution warehouse, Duoduo Maicai announced its official launch. On the same day, his company began recruiting ground promoters, but the situation was not ideal. It wasn't until January 14 that they gradually recruited promoters to start promotional work. It is worth noting that the career cycle of ground promoters is not long. Wang Min (pseudonym), a human resources manager responsible for recruiting ground promoters for Hema in Central China, said, "The company doesn't need that many ground promoters. As city operations stabilize, the ground promoters who were fiercely recruited in the early stage will be disbanded." -02- The 'First-Tier Embarrassment' of Community Group Buying: Group Leaders Exist, but Orders Don't The simple and crude promotion model of "pay per successful registration" has driven ground promoters into a frenzy of customer acquisition, directly resulting in group leaders "blossoming everywhere." After the launch in some areas, many group leaders have fallen into embarrassment. Liu Meixin, a Duoduo Maicai group leader in Shanghai, runs a fruit and vegetable supermarket. More than a week ago, a ground promoter came to her door, and she registered as a Duoduo Maicai group leader. "Being a group leader is just a side thing, but our street is circular, and there are 5 shops that are pickup points. Basically, there's a group leader every less than 100 meters. " Liu Meixin has very few orders recently, but there are "quite a few" group leaders around. Liu Lei (pseudonym), a Duoduo Maicai group leader in Minhang District, Shanghai, also became a group leader a few days ago when a ground promoter came to his door. "I had known about community group buying before. I thought I could do it alongside my shop, but after two days, I haven't had many orders. Yesterday I only had 3 orders. Maybe it'll get better in a few days." During interviews, a Shell Finance reporter contacted multiple Duoduo Maicai group leaders in Shanghai, and most said they had recently started community group buying but had very few orders. Regarding the frenzy of ground promotion and the dense but low-order group leaders, Wu Xinglai said, "The platform will close some shops later. If online shops have enough orders, they'll be kept; if not, they'll be closed." Outside Shanghai, Beijing, Guangzhou, and Shenzhen have all become new target cities for community group buying. However, a Shell Finance reporter's investigation found that compared to the "blossoming" group leaders in Shanghai, Shihuituan's progress in Beijing has not yet made a big splash: pickup points are far less dense than in Shanghai, many communities have no group leaders, and even shops that have registered as group leaders show signs of "not wanting to continue." A reporter browsing Shihuituan's mini-program found that the nearest pickup point to the reporter's location near Shijingshan Wanda Plaza in Beijing was more than 12 kilometers away, and the page also recommended group leaders from other provinces like Jiangxi. Wang Li is a Shihuituan group leader in Tongzhou, Beijing, and has been doing it for over a month, facing the same problem of sluggish business. "I haven't received many orders in total. I don't think there's much to do, so I don't want to continue." However, when a Beijing News reporter checked Shihuituan's pickup points, Wang Li's pickup point was still displayed on the group leader page. A Shell Finance reporter contacted several group leaders in Beijing shown on the Shihuituan platform, and many quickly hung up after saying they were no longer doing community group buying. Unlike Duoduo Maicai and Shihuituan's initial layouts in Shanghai and Beijing, Meituan Youxuan has long been entrenched in Guangzhou. Since September last year, Meituan Youxuan has been competing with giants like Xingsheng Youxuan and Shihuituan in Guangzhou. Liu Fangming (pseudonym) is the owner of a supermarket in Guangzhou and also serves as a group leader for both Meituan Youxuan and Xingsheng Youxuan. When asked about income and order volume, Liu Fangming said that although registered for several months, Meituan Youxuan alone currently only brings in a few orders a day. -03- Old Courier Giant SF Express Enters Couriers Disguised as Group Leaders? In mid-2020, Meituan, Didi, Pinduoduo, Alibaba, JD.com, and others successively made high-profile entries into community group buying, from capital layout to direct participation, accompanied by investments, organizational adjustments, and executive deployments. Now, amid the melee, courier giant SF Express has quietly joined. Recently, SF Express launched its "Fenghuotai" mini-program, calling itself a "new supply chain ecosystem enabler," mainly selling fruits, vegetables, meat, grains, etc. It has already launched in multiple cities including Beijing and Shanghai. According to the official introduction of Fenghuotai, it is a comprehensive urban-rural supply chain service platform carefully crafted by SF Group's Fengnong Technology. Relying on SF's cold chain logistics system and direct sourcing supply chain capabilities, it provides community stores with B2B procurement and sales of fresh/FMCG products, community marketing tools, and express co-distribution services. According to platform information, partners (group leaders) who join Fenghuotai can receive 8%-20% of order amounts as sales commission, subject to the commission shown on the platform. Additionally, recommending new partners to successfully join can earn a permanent reward of 1% of the new partner's net sales. The first 10,000 new partners who successfully register through the partner recommendation platform and complete 3 express-to-home product sales orders within one week will each receive a 10 yuan cash reward for reaching the target. On January 21, a Beijing News reporter browsing the Fenghuotai mini-program found that Fenghuotai's partners in Beijing are relatively densely distributed, with a partner almost every few hundred meters. Fenghuotai offers two modes for obtaining products: partner delivery and express-to-home, but currently the only available delivery method is express-to-home. Although there are corresponding partners near the address, partner delivery has not been activated. A Shell Finance reporter found the nearest partner, Wu Xuan (pseudonym), using the address provided by the platform. According to him, he is actually an SF Express courier, and the company requires him to register as a partner. The reporter then randomly contacted several other partners, and all were SF Express couriers. Wu Xuan said that he has only registered on the platform so far and has not received any orders on Fenghuotai. "Maybe consumers place orders, and I deliver the express." As of the time of writing, the "group leaders" on the early Fenghuotai mini-program have all been changed to "partners," but the related business has not changed. Internet analyst Tang Xin said that after the pandemic, user consumption habits have changed, and internet traffic faces a growth ceiling. Multiple giants entering community group buying choose to deeply cultivate long-tail traffic, including doing asset-heavy business models, such as building community warehousing and logistics systems and community sales channels. This is also how giants are building their own business moats. -04- Community Group Buying Surrounds First-Tier Cities or Fizzles Out At the end of 2020, the "nine prohibitions" put a tight noose on community group buying. The State Administration for Market Regulation stated that it would strengthen supervision of price behavior and anti-unfair competition in community group buying, regulate market order, and maintain a fair competitive market environment. Facing strong regulation and operational red lines, many internet giants are internally adjusting their businesses, but the giants' "vegetable basket" race has never stopped. Ouyang Rihui, a professor at Central University of Finance and Economics and deputy director of the China Internet Economy Research Institute, said in an interview with a Shell Finance reporter that community group buying aims to seize the online and offline consumer goods retail market from cities to rural areas. This is a 40 trillion yuan market. The giants' goal is not entirely to compete with vegetable vendors but to prepare for future layouts. "The penetration rate of fresh e-commerce is low. Once community group buying is established, it's not just about selling fruits and vegetables; you can sell anything." Now, as community group buying enters first-tier cities, it will face competition from fresh new retail platforms that have been deployed earlier in first-tier industries. According to a research report by Industrial Securities, the main purchase channels for fresh products currently include farmers' markets, mom-and-pop vegetable stores, chain supermarkets, fresh new retail, vertical fresh platforms, and food delivery platforms. Consumers in third- and fourth-tier cities and below still mainly buy fresh products from farmers' markets and convenience stores; the coverage and penetration of new retail formats and large supermarkets are low. However, in first-tier cities, taking Hema Fresh as an example, the fresh new retail format is mainly distributed in first-tier and new first-tier cities led by Beijing, Shanghai, and Shenzhen. In terms of chain supermarkets, large supermarkets are denser in high-tier cities than in low-tier cities. For example, Walmart has an average of 13 stores per city in first-tier cities, far higher than the 2 stores in third- and fourth-tier cities. Zhao Ping, vice president of the Research Institute of the China Council for the Promotion of International Trade, told a Shell Finance reporter that community group buying is a new trend in internet development and also the most difficult area for internetization. Vegetables, fruits, and other agricultural products are fresh and perishable, but these products are also daily necessities for ordinary people. In Zhao Ping's view, community group buying has many advantages, including solving last-mile delivery, meeting consumers' niche and personalized needs, and significantly reducing inventory and store costs, thereby improving profitability. Regardless of which tier of city they enter, relevant companies must abide by fair competition rules and enter the market in a compliant manner. They should comply with the Price Law, avoid low-price dumping through large-scale subsidies, adopt a steady market entry model, and promote and acquire customers legally to expand market share. According to a research report by iResearch, in recent years, with capital support, the community group buying track has risen abruptly. Coupled with low industry thresholds, community group buying platforms have sprung up like mushrooms, and homogeneous competition has become increasingly fierce. For community group buying platforms, the short-term test is the control of group leaders and cross-regional expansion capabilities; in the long run, it is the supply chain and refined operation capabilities that can continuously and stably provide high-cost-performance products. In the coming period, the fresh e-commerce market (including fresh new retail platforms, home delivery platforms, community group buying, etc.) will still see a multi-model coexistence. New entrants like community group buying will escalate the melee in fresh e-commerce. Affected by the pandemic, fresh e-commerce will usher in rapid growth, and competition in the fresh e-commerce industry will continue to intensify. Traditional retail supermarkets will accelerate the expansion of online channels, giants' layouts in fresh e-commerce will continue to expand, and the entry of community group buying will also accelerate the reshuffling of the original industry pattern. Source: Beijing News Shell Finance (WeChat ID: banglicai) Tips will be paid 400-2000 yuan once adopted.