Click to read the original text for details According to the latest news, the Jingxi Business Group will be dismantled, involving multiple business segments such as Jingxi Pinpin, Jingxi App, and Jingxi Tong. In recent months, JD.com's Jingxi Pinpin has been reported to have fully withdrawn from many regions, retaining only partial operations in Beijing and Zhengzhou. As a platform that once covered more than 20 provinces and was highly anticipated within the group, Jingxi Pinpin is now collapsing... In the second half of 2019, an industry insider described community group buying like this: "Watch him build a tall building, watch him feast guests, watch his building collapse." However, three years later, we can still use this phrase to describe the current state of community group buying. Jingxi Pinpin, Meituan Youxuan, Xingsheng Youxuan, Duoduo Maicai, Taocaicai, and others have all been carrying out varying degrees of city withdrawals, layoffs, contractions, and cost reductions... Is community group buying viable? Almost all remaining community group buying platforms are emphasizing cost reduction and efficiency, quality growth, and single-point profitability. It seems they are all holding on, and without optimization and adjustment, they cannot withstand the pressure. There is no doubt that community group buying is about to enter the next "dormant period" and retreat. Without the spotlight, it is gradually fading. It is at this juncture that we pause to reflect: What exactly happened to community group buying? Why did it emerge, why did it stagnate, and where is it heading? 1 The Past and Present of Community Group Buying If today's community group buying competition had been predicted two years ago, no one would have imagined such a market landscape. In July 2020, Meituan announced the establishment of the "Youxuan Business Unit" to launch the "Meituan Youxuan" business, officially entering the community group buying track, and launched testing in Jinan, Shandong. On August 31, 2020, Pinduoduo's "Duoduo Maicai" was officially launched in Wuhan and Nanchang. There was also an important player who, although now "fallen," was quite formidable in the past two years. In June 2020, news spread that Didi had entered community group buying, and "Chengxin Youxuan" was launched in Chengdu. At that time, Didi stated that, like errand services and freight, Chengxin Youxuan was just one of its explorations into new businesses. Three months later, the subsidy war officially began: "1.99 yuan for 6 eggs, 0.86 yuan per jin of carrots, 0.99 yuan per jin of leeks, and new users get a 40-yuan rebate on a 40-yuan order." The phrase "unlimited investment" was also often used to intimidate. With the summer of 2020 (June-August) as the dividing line, the history of community group buying before and after is vastly different. From 2016 to 2018, community group buying had just emerged, exploring new business models. From 2018 to 2019, regional community group buying emerged, with capital support and attention from giants. According to statistics, in 2019, there were 17 financing events in community group buying, with a total financing amount of 8.34 billion yuan. Giants began to pay attention and enter the market in small steps in different ways. Alibaba's Hema Fresh launched "He Shequn," JD.com launched the mini-program "Youjia Puzi," Suning announced the launch of community group buying business on Suning Xiaodian, Pinduoduo entered community group buying by investing in "Chongma Linli Tuan," and Tencent invested in Xingsheng Youxuan to increase its stake in the community group buying track. On one hand, giants were paying attention, testing launches, and increasing investments; on the other hand, in the second half of 2019, community group buying platforms were also filled with closures, city withdrawals, and transformations. Typically, Squirrel Pinpin was reported to have laid off employees nationwide, and Xiaoqule was reported to have fully withdrawn from the Zhengzhou market... When everyone thought community group buying had entered deep waters in 2019 and reached the second half, someone once said, "The current community group buying is fraught with crises. Group leaders want to earn money, platforms want profits, consumers want cheap prices. Where is the benefit? Community group buying has come to an end; either transform or die..." We thought the battle was over, but this was only version 1.0 of community group buying. At the beginning of 2020, the outbreak of the pandemic made more giants realize the value of the "pre-sale, next-day pickup" model, as well as the users, traffic, and scale behind that value. Subsequently, as just described, after half a year of research and exploration, Meituan, Didi, and Pinduoduo deeply entered the game. Once giants participated, the previous development of community group buying was no longer relevant. From June 2020 to June 2022, two years of community group buying were full of dramatic changes. There was no logic, no rules, no professionalism—just investment, investment, and more investment! From 2020 to 2021, giants officially entered, spreading nationwide and engaging in subsidy wars. From 2021 to the present, giants have been shutting down and withdrawing, contracting businesses, and focusing on survival. Tides rise and fall, then rise and fall again. Although the reasons for the rise differ, the reasons for the fall are strikingly similar. Yesterday's history and today's lessons tell us that community group buying is a retail business and a supply chain business, requiring one to "bend down to pick up coins." 2 Community Group Buying Enters a Full Rest Period Returning to the essence, community group buying is not a capital war or a traffic war. In the past, giants entered community group buying not for the sake of community group buying itself, but as an entry point to high-frequency consumption scenarios. Behind high-frequency consumption lies massive traffic. In the eyes of internet people, traffic means everything. However, everyone overestimated community group buying, and when they actually practiced it, they found they had underestimated it. Not to mention that they underestimated the difficulty of community group buying from the start. What was underestimated was not the business model threshold, user operation promotions, or replication and expansion to new cities. What was underestimated was supply chain fulfillment and delivery, category mix design, and community social relationships. Highly fragmented, non-standard, and low-development fresh produce, as well as warehouse and distribution infrastructure with different needs for ambient, refrigerated, and frozen storage, all require a supply chain system based on local, not national, operations. Stable fresh produce requires mature cold chain supply. The cold chain for community group buying has never been a technical issue but a cost issue. Low-priced fresh produce cannot support the underlying warehousing and distribution costs. According to relevant reports, Meituan invested 2.5 billion yuan in cold chain and automation, and Duoduo provided interest-free loans to help grid warehouses build cold chains. However, in reality, many grid warehouses did not use the cold chain after building it, still using dry ice and physical ice packs for cooling. The ideal state is centralized procurement, reducing transaction processes, and thereby improving efficiency. But for fresh produce categories, it is impossible to achieve large-scale centralized procurement due to transportation losses, price fluctuations, scattered planting, and so on. It is difficult to truly achieve economies of scale in a short time. JD.com began building its own logistics in 2007, investing over 100 billion yuan to date, building more than 1,200 warehouses and 32 Asia No.1 distribution centers, and employing 260,000 staff. Even today, JD.com can cover most regions of the country, but in the fresh produce category, it is only partial. This clearly shows the high difficulty and long cycle behind it. In fact, community group buying is, from the start, a long-term protracted war, not like food delivery or ride-hailing, where one battle ends and the winner and loser are immediately clear. When capital entered, giants joined, and mergers and acquisitions occurred, these internet playstyles made us forget the essence of the community group buying business. Instead of thinking about the business itself, we focused on who invested more, who opened more cities, who had more orders... Going back to 2020, if there had been no COVID-19 pandemic and no giants joining, the community group buying track might have been on the right track, returning to the logic of community fresh O2O. One might even think that the emergence of Didi, Meituan, and Duoduo did not lead the industry but rather led it astray. They focused not on the value brought to users or solving user pain points, but on traffic, traffic, and more traffic. 3 Summary From the thousand-group war of 2008-2014 to the food delivery war of 2014-2018, perhaps we are used to capital influx, burning money on subsidies, cultivating user behavior, oligopoly competition, five to three, three to two. This is standard internet logic, but community group buying is not the internet. Perhaps the name "community group buying" was wrong from the start, misleading many people. It should not have been called community group buying. If it had been called community retail, community service, community fresh, or community e-commerce from the beginning, the industry giants might not have been so eager for quick success. Let community group buying take a break and give it more time to think about user needs, product structure, and warehousing and distribution facilities! Returning to the platforms behind community group buying, FMCG, which accounts for the highest proportion on these platforms, has now lost a new growth point. As platforms enter a rest period and no longer have major development, there will naturally be no short-term sales explosion for FMCG. For FMCG manufacturers, how to find new growth points, how to explore the next step in new retail, and how to make up for the growth in sales during the same period within the existing base, poses new challenges for FMCG manufacturers. From July 20 to 22, New Distribution organized the (7th) China FMCG Channel Innovation Conference in Chengdu with the theme "Seize the Opportunity, Stabilize the Market" , focusing on current channel changes and upgrades, with 10 forums and over 70 industry experts, brand executives, and distributor operators, thinking together from different perspectives about the latest practices and experiences in FMCG channel transformation.