---
title: "Midway Through the Race: How Can Community Group Buying Platforms Take the Lead?"
description: "At the Central Plains Community E-commerce Summit held on July 26, Wang Jun, CEO of Dimiao Youxuan, shared insights on refined operations in community new retail. He emphasized that community group buying is a disruptive model, requiring focus on four core attributes (necessity, high frequency, small amounts, and distinctiveness) and four core values for stakeholders, while also highlighting the importance of strengthening user memory points, standardizing external processes, internal management, and data awareness."
author: "王军"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2019-08-01"
language: "en"
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# Midway Through the Race: How Can Community Group Buying Platforms Take the Lead?

> At the Central Plains Community E-commerce Summit held on July 26, Wang Jun, CEO of Dimiao Youxuan, shared insights on refined operations in community new retail. He emphasized that community group buying is a disruptive model, requiring focus on four core attributes (necessity, high frequency, small amounts, and distinctiveness) and four core values for stakeholders, while also highlighting the importance of strengthening user memory points, standardizing external processes, internal management, and data awareness.

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On July 26, the Central Plains Community E-commerce Summit was grandly held at Zhengzhou Huazhi Hotel, co-hosted by New Distribution, Innovation Retail Society, Community Social E-commerce Internal Reference, and Central Plains Community E-commerce Club, with Boda Noodles as a co-organizer.
At the forum, Mr. Wang Jun, CEO of Dimiao Youxuan, gave a presentation titled "How to Refine Operations in Community New Retail," which was compiled and published by Innovation Retail Society for readers.****
**Community group buying, in my opinion, is definitely a new model that will disrupt traditional retail.**
Many people in the supply chain business, after supplying goods to large platforms and seeing good results, decide to build their own software and go it alone. It seems that the barrier to entry for community group buying is low—just buying and selling goods—but after a while, they find it increasingly difficult. This is a common problem everyone faces now.
I have always admired the entrepreneurs in community group buying because we are transforming the retail industry, changing and educating user habits, and creating a new model that subverts traditional models. I suggest that since you have already started in this industry, stick with it and do it well.
Practitioners in community group buying experience various pains every day. It's like riding a roller coaster, with surprises and scares daily. What are the surprises? Every day, many group leaders join our platform, and many suppliers come to discuss cooperation. What are the scares? The worst is receiving a call from our warehouse and distribution center at 2 a.m. saying that a supplier cannot be reached. This is the current state of the domestic community group buying industry.
Everyone is clear about the current state of the industry. Let's look at new entrants: JD.com has entered the community group buying track, and Meituan recently closed its Xiaoxiang Fresh stores. The three stores in Changzhou, Jiangsu, with an investment of nearly 45 million yuan, were all closed within less than half a year, also impacted by community group buying.
Cainiao is also piloting in Jiangsu, and Suning has Su Xiaotuan based on its stores. Even China Post has launched a platform called Youle Home.
So now even the "national team" is crowding into this track to share the pie, so I believe community group buying is definitely an industry worth exploring.
**Four Core Attributes of Community Group Buying Platforms**
Our group leaders are mostly store owners, with very few stay-at-home moms. Because stay-at-home moms are not very good at experience and delivery.
On the other hand, convenience store owners are mostly older, but they are particularly weak in community operations and lack skills and methods. This is an important reason why community group buying is hindered.
So we hold group leader meetings several times a month, focusing on these points: How to improve store performance? How to quickly fill a 500-person group? How to build a personal IP while making money? How to become a community leader? How to activate your Moments, what are the 16 types of posts to share, how to activate group atmosphere, and how to do interactive marketing? These are what our stores lack, and we need to provide them with regular knowledge input and training.
**I believe community group buying platforms must focus on these four aspects.**
**First, necessity.** The products sold on the platform must have the attribute of necessity. For example, rice, flour, oil, meat, poultry, and aquatic products are definitely necessities. You might not eat meat today, but I believe you will eat meat this week.
**Second, high frequency.** We define vegetables and fruits as high-frequency items. No family can say they won't eat vegetables tomorrow. So we should list more high-frequency products.
**Third, small amounts.** I think the average order value should not be too high, controlled below 9 yuan. Our fruits are split into small portions for sale. We must let customers eat fresh things; this is our philosophy. The most important thing is to let them finish today and come back tomorrow. We don't want them to buy something and not come back for half a month, or maybe forget us after half a month.
**Fourth, distinctiveness.** The products we sell must have distinctive features, meaning differentiation. For example, local specialty products. In our local Jiaoxi Town, the specialty is Jiaoxi Braised Pork, which has been recognized as intangible cultural heritage. But if you want to eat it, you need to drive 30 kilometers to get it. That's costly and time-consuming.
Now, through our platform, you can order Jiaoxi Braised Pork from home. Of course, there are many internet-famous products with distinctive and differentiated features.
We believe community group buying platforms must be centered on family consumption. Let me give two examples. When our platform first launched, our product selection team lacked experience. On the third day, we listed a 10-kilogram pack of chicken feet.
But the daily sales of 10-kilogram chicken feet were only 45 units, even though the price was 60% lower than the market. We intended it as a hot product, but only 45 units sold in a day. So we held a meeting to analyze the reason.
The first issue: I can't eat that many chicken feet. The second: my refrigerator at home can't fit them. This fully demonstrates that our procurement team lacks life experience. They didn't consider whether the product suits users or families. This product is clearly meant for hotels, not families. This is crucial. Later, we also sold amaranth. We listed 300 grams of amaranth, and many group leaders bought it, then reported to our customer service that 300 grams cooked up to less than half a bowl, not even enough for a child.
This tells us that the products we sell must be considered from a family perspective, including portion sizes. So procurement must have rich life experience to provide better customer experiences.
**Four Core Values of Community Group Buying**
**Platform side:** Defines a new consumption scenario, a new supply-demand model of "sell before purchase," and a mainstream channel for family consumption.
**Supplier side:** High turnover rate for upstream supply chain products, low loss, new product promotion, inventory clearance, including inventory clearance.
**Group leader side:** Our group leaders have low risk and zero investment, through two-way traffic diversion, category expansion, personal independence, family status, personal value, sense of achievement, and happiness.
**Consumer side:** Our users spend the least money to buy the most cost-effective products.
These are the core values of community group buying, not just our platform's core values. **We believe the future definition of community group buying is: Community residents = Community + Social groups + Group leaders + Physical stores + Products. Products must be: Clothing, food, housing, transportation, eating, drinking, entertainment, and fun.**
In community group buying version 1.0, everyone is buying and selling goods, seemingly doing retail, but in fact not. Now we are already playing the 2.0 model. In the 2.0 model, I think we should add life services and local life. Community group buying 1.0 is about fresh fruits and vegetables, agricultural market products, including convenience store and supermarket flowers. In version 2.0, we incorporate life services.
If you only do retail products, your gross margin is 20-30%, and making a profit this way is very painful. Virtual products are different; their cost is almost zero, no cost at all. So we incorporate home services, such as cleaning services, air conditioner cleaning, car maintenance. What you do is definitely not just selling retail products. It's a comprehensive service platform.
The last is local life products, including catering, baking, ticketing, cinemas, scenic area tickets, parent-child education, amusement parks, etc. We can do all of these. It's not limited to just selling goods; this is my definition of 2.0.
**Strengthening User Memory Points**
We always say to strengthen user memory points. In community group buying, you must strengthen user memory points; otherwise, your platform will struggle. From February to now, I've been in contact with nearly 170 community group buying companies, and through exchanges, I've summarized three issues.
> **The first issue is technical.** The system cannot meet the platform's needs.
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> **The second is operational.** Operations include internal, external, and group leader operations, which is a big problem.
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> **The third is supply chain.**
**Platform Differentiation**
Because there are more and more platforms doing community group buying, each city has dozens of platforms. Many are localized platforms, and they are really different from us. For example, they don't touch fresh produce, only fruits, not vegetables, meat, poultry, or aquatic products. They only do one category. Another type has longer delivery times, and some only do beauty products. Every place is different, so I tell our BD team: when you go out, you must tell users how our platform is different from others.
**Standardization of External Platform Processes**
You must tell group leaders the listing time, order cutoff time, delivery time, including the latest delivery time, when to push hot products, what products to push each hour, and how to handle after-sales. These are all crucial. Many platforms now go to the production area in the morning, shoot materials in the afternoon, and list on the platform in the evening. There is no standardized listing time. In fact, this makes it hard for users to remember. You must strengthen user memory points: when your platform updates is very important. Without standardization, group leaders don't know when products are updated, and users don't know if there are new products, which will have a huge impact on you.
**Internal Management Process**
Many companies are doing "firefighting" now. What is firefighting? Doing urgent and important things every day. Our company does not allow this. Our company's work must be done in advance. Procurement must do things three days ahead. Design must finish tomorrow's work today. Product listing personnel must complete listings before tomorrow's listing time. You can't do today's work today. Doing this for two days is okay, but for several months it won't work. So these are all crucial, including art design, listing modification times, daily push article times, and warehouse acceptance standards.
Many companies are casual and arbitrary about after-sales standards, but after-sales must have standards. At the same time, KPI setting is very important for internal management. There is also business goal management, which refers to how to make your employees partners, how to make your business development team more proactive, and whether the procurement team's daily business flow is linked to their performance. I advocate for standardization of goals. If you don't have sound systems and SOPs, it will be very difficult.
**Data Awareness**
We require all teams to have data awareness. Our business development team must be responsible for all the group leaders they recruit. I always emphasize that BD, operations, procurement, and group leaders must have data awareness. Data tells us what to do and optimizes our work.
Data from a leading platform
Data from a leading platform
Everything we do is data-driven. We regularly analyze data from leading platforms. We must learn from them because they are excellent. We need to know how many categories they list, what their average order value proportion is. We analyze all this. Every month, I spend a week tracking 3 to 5 platforms, doing data analysis to learn from them, analyzing their product structure proportions, the proportion of listed products in each category, etc. Only by continuously learning from your business partners can you improve.


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