At just past 8:00 AM, a delivery truck pulled up beside a group-buying pickup point in Shenzhen's Shangshui Garden. Deng Liang (pseudonym), a Meituan Select group leader, was already waiting at the door, helping the driver unload various goods into the station. Deng has run this station for over two years. "For the convenience of my neighbors, I didn't even take a break during the Chinese New Year. Now, I only take orders from Meituan Select and have closed other community group-buying platforms." According to Deng, the most noticeable change at Meituan Select began around June this year. The most obvious was that delivery times were earlier: goods that used to arrive at 3 or 4 PM now arrive before noon, and the variety of products has increased significantly, with prices remaining low—some vegetables and fruits he had never even seen before.
The earlier arrival of the driver is significant for Deng. First, it gives him more time to sort and bag goods according to orders, thus advancing the time for home delivery and customer pickup. Second, on weekends and short holidays, most users are at home and prefer goods to arrive earlier, which undoubtedly increases user satisfaction and repeat purchases. Because of the earlier arrival, group leaders have more time; now, as long as the order amount is around 30 yuan, Deng will deliver. "Some orders are small, but if they're on the way, I can deliver."
Although Deng's story only represents the changes at a small group-buying station, it reflects a still-hot community group-buying track. In fact, over the past year, players on the track have not left the game; instead, they have been exploring new ways of community group-buying based on their respective advantages.
Take Meituan Select, mentioned above, as an example. In June this year, Meituan Select proposed a further upgrade of its services, naming it the "Summer Battle." According to E-commerce News, Meituan Select's office area is now filled with red "Summer Battle" signs and banners. At the same time, the business competition status of various regions is displayed in real-time on a large screen on the first floor. The main actions of the "Summer Battle" are to improve delivery speed, enrich product variety, and adhere to lower prices, making multi-faceted efforts to enhance user experience.
Meituan Select's goal is clear: attract more users with faster speed and more SKUs, increase gross margin, and thus return to the track of competing for growth. In the six months prior, Meituan Select shifted its category positioning from "community e-commerce" to "next-day supermarket" and proposed a new brand slogan, "Really, really saves," gaining a wave of users by enriching SKUs.
JD.com, another "giant" in the e-commerce field, also made a move. In July this year, JD.com announced the "restart" of community group-buying, even after incurring losses of about 10 billion yuan in 2021, still hoping to carve out a place in the industry. The Alibaba system is not far behind: its Taocaicai merged with Taoxianda (an instant retail business with one-hour delivery) and was renamed "Taobao Buy Groceries," hoping to avoid traffic dispersion and reduce procurement and delivery costs.
Community group-buying still has enormous appeal and will remain a battleground for giants in the future.
Looking at the development history of community group-buying, it's not hard to see that today's community group-buying is very different from the past. In the past, internet giants competed in the community group-buying field in a simple and crude way: using huge subsidies to exhaust competitors, then occupy the market and redefine it. But after "huge subsidies" were halted in June 2021, the crude money-burning approach no longer applied, and players unwilling to exit could only choose to move forward slowly. Even platforms backed by large enterprises, such as Meituan Select, Duoduo Maicai, Taobao Buy Groceries, and JD Pinduoduo, could only gradually penetrate based on their respective resource advantages.
At this stage, the respective advantages of Meituan Select and Duoduo Maicai have been demonstrated. Now, these two have become "big players" on the track, or perhaps only they can compete with each other. Looking at the data alone, the two are not far apart. In 2021, Meituan Select's GMV was 120 billion yuan, slightly ahead of Duoduo Maicai's 80 billion yuan. But in September of the same year, Duoduo Maicai's order volume began to overtake Meituan Select. However, soon after, in some regional group-buying outlets, Meituan Select's share began to catch up with Duoduo Maicai, and even surpass it.
In terms of the advantages of the two, Meituan Select's advantage comes from Meituan's business attributes and logistics capabilities. First, Meituan started with group-buying business, then shifted to the O2O field and entered "local life" services. Beyond its main products, it successively launched independent businesses such as Maoyan Movies and Meituan Hotels, evolving into a comprehensive application that can meet most of users' local needs. Today, Meituan continues to add businesses, covering homestays, tourism, fresh produce, and more.
It is precisely for this reason that Meituan has a better understanding of consumer needs. This can be glimpsed from the service upgrade of Meituan Select: for consumers, "faster delivery, more variety, and lower prices" are exactly the three aspects that everyone cares about most.
In addition, Meituan also has significant advantages in logistics. It can even be said that Meituan has already carved out a place in the domestic logistics market. In the "Announcement on the Release of the 2023 Top 50 Chinese Logistics Enterprises and Top 50 Private Logistics Enterprises" issued by the China Federation of Logistics & Purchasing, Meituan Delivery, with logistics business revenue of 70.064 billion yuan in 2022, ranked seventh on the China Logistics Top 50 list, fourth on the China Private Logistics Top 50 list, and third among high-growth logistics enterprises. It is worth mentioning that media previously reported that Meituan Delivery's revenue in 2021 was only 61.926 billion yuan, achieving nearly 20% growth in one year. From this, it can be predicted that if Meituan can maintain this growth rate, it may not be long before it becomes a logistics company with a revenue scale of 100 billion yuan.
It is precisely with the support of a huge logistics and delivery capability that Meituan Select, backed by Meituan, can achieve a significant improvement in delivery efficiency. From "4 PM" to "noon delivery," Meituan Select seems to be only four hours faster, but in reality, it affects the consumption experience of millions of consumers. From this point alone, Meituan Select is already far ahead.
On the other hand, Duoduo Maicai's core advantage is mainly that Pinduoduo's audience fits the user profile of community group-buying very well, and Pinduoduo's accumulation in the agricultural products industry makes it more familiar with the supply chain.
Looking at other players on the track—JD.com, Xingsheng Youxuan, and Taocaicai. The former, although hoping to expand into broader lower-tier markets through "community group-buying," has obvious strengths and weaknesses, and its development still needs time. Xingsheng Youxuan, although the only survivor of the "old three groups" and having withstood the impact of "internet giants," currently has limited scale and can only stay in one corner. Taocaicai, backed by Alibaba, does not yet have the ability to compete with other platforms in the community group-buying field.
But whether it's Meituan, JD.com, or the Alibaba system, they all target the lower-tier market with "low prices." Because regardless of category, fulfillment method, or user acceptance, community group-buying can effectively expand into lower-tier markets.
Therefore, to some extent, future competition will focus on lower-tier markets. Whoever can provide a better consumption experience for consumers in lower-tier markets will gain more traffic users and occupy a competitive advantage.
On August 24, Meituan released its Q2 2023 financial report for the period ending June 30 on the Hong Kong Stock Exchange. The report stated that in Q2 2023, Meituan's new business revenue increased by 18.4% year-on-year to 16.8 billion yuan, with Meituan Select's transaction volume and revenue continuing to grow year-on-year. In response, Meituan expressed confidence in the long-term potential of Meituan Select.
Experts analyze that the traffic landscape of community group-buying is gradually becoming clear, and the next step for platform strategies is to shift from traffic expansion to refined management of advantageous regions. From the perspective of the community group-buying supply chain, "procurement—warehousing—delivery—outlets—group leaders—C (consumers)" involves too many links, with significant losses, especially for fresh products. There are still many details in the entire supply chain that can be optimized, and refined management will undoubtedly reduce costs and increase efficiency. This is undoubtedly a shot in the arm for all community group-buying players.
But at present, the group-buying war among giants is far from over, and the "second half" toward profitability has just begun. However, it can be predicted that competition in the second half will focus on service and consumption experience, and enterprises that adhere to long-termism and are willing to invest in service will surely stand out.