---
title: "New Book Launch | Community Group Buying: Trend or Fad?"
description: "Amid the pandemic, while traditional brick-and-mortar businesses face unprecedented crises, two new retail tracks stand out: livestream e-commerce and community group buying. Community group buying, a new retail model that has spread from second- and third-tier markets to the whole country, is not a fad designed by internet circles but a new community retail business form discovered by traditional retailers through trial and error in the internet era. In our view, it is not a capital-driven fad but a 'third retail revolution' emerging from the grassroots, with the potential to transform China's retail industry."
author: "陈海超 杨顶刚"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2021-01-21"
language: "en"
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original_source: "https://mp.weixin.qq.com/s/YX-uK3hIQlYFvhuBLSKugw"
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# New Book Launch | Community Group Buying: Trend or Fad?

> Amid the pandemic, while traditional brick-and-mortar businesses face unprecedented crises, two new retail tracks stand out: livestream e-commerce and community group buying. Community group buying, a new retail model that has spread from second- and third-tier markets to the whole country, is not a fad designed by internet circles but a new community retail business form discovered by traditional retailers through trial and error in the internet era. In our view, it is not a capital-driven fad but a 'third retail revolution' emerging from the grassroots, with the potential to transform China's retail industry.

Amid the pandemic, while traditional brick-and-mortar businesses face unprecedented crises, two new retail tracks stand out: livestream e-commerce and community group buying.
Community group buying is one of the few new retail models that, in the past two years, has spread from second- and third-tier markets to the whole country. Its birth was not a fad designed by internet circles but a new community retail business form discovered by traditional retailers through trial and error in the internet era.
In our view, community group buying is not a fad hyped by capital but a 'third retail revolution' emerging from the grassroots. Like the 'household contract responsibility system' tried by a dozen farmers in Xiaogang Village, Fengyang, decades ago, it comes from the daily lives of urban residents and is bound to trigger a not-so-glamorous retail revolution that will turn China's retail industry upside down.
**Community group buying is a trend, not a fad**
**1. Why can't community group buying be defined as a fad?**
The 'fad theory' has a strong opportunistic flavor. Everyone is waiting for the wind to come, but few know when it will; everyone wants to be the 'flying pig,' but they worry that without wings, they might fall and become a 'dead pig' when the wind stops. For many traditional enterprises, fads are both desirable and not very hopeful. For them, opportunities they cannot grasp are not opportunities at all, but rather magnificent pitfalls wrapped in concepts.
Community group buying is a form of new retail that connects through semi-acquaintance social relationships among neighbors, applying both 'online logic' and 'physical logic.' The logic of 'supplier (manufacturer) – platform – group leader (pickup point) – community user' is extremely simple. Whether it's attracting fans from physical stores to order online, or from online platforms to community distribution and self-pickup, the integration of 'community O2O' is achieved through 'community + tools.' These touchpoints are not difficult to understand or operate, and everyone in the chain feels they are on solid ground, much more reassuring than waiting to be blown into the air.
**2. Why is community group buying a trend?**
First, community group buying is not a simple channel innovation; it is a change in business logic and a reversal of consumer sovereignty. Traditional distribution follows the logic of enterprise – channel – consumer (push), while community group buying follows the logic of consumer – platform collective purchase – enterprise order (pull). Consumers vote with their money, determining whether a company's products are right. This naturally realizes the new retail principle of 'user experience first, product is king.'
Second, community group buying reconstructs a warm consumption scenario. Trust agency and word-of-mouth sharing among neighbors, picking up goods on the way home, greeting each other, saving time by avoiding supermarket queues, and enjoying safer, more convenient, and more affordable services. Even if the transaction is not for socializing, it inherently has social attributes.
Finally, building communities based on residential areas, linking platforms, group leaders, and users, creates a three-dimensional space of 'online + physical + community.' As the operation of community platforms deepens, the stickiness from transaction to relationship will strengthen, and multiple indicators from order numbers to user activity will improve.
**3. What value does community group buying bring to enterprises?**
How to transform to 'new retail'? Many enterprises don't know how, and even those with complete marketing systems feel confused about transformation, with high risks and costs of exploration. As a form of new retail, community group buying follows the same business logic of 'higher efficiency, better experience.' It may seem to run on the ground, but it is a high-speed train, solid and fast for enterprises transforming to new retail. It can be said that community group buying is the most down-to-earth form of new retail, the easiest to integrate with existing retail formats, and the most beneficial to both enterprises and users.
**4. Are there risks for enterprises doing community group buying?**
Competition among community group buying platforms is intensifying with capital, but that's a matter between platforms. Fortunately, competition to some extent helps enterprises negotiate with platforms on fairer and more transparent terms. Eventually, leading platforms will emerge, but this has little impact on enterprises' current choices. The reasons are:
1) All community group buying platforms are currently in a market race stage, so entering now does not involve the high entry fees, barcode fees, or display fees of traditional supermarkets, nor the high entry barriers of Tmall or JD.com.
2) There is no long settlement period as in traditional channels, so cash flow is faster, and enterprises do not bear excessive operational pressure.
3) Enterprises fear the cost of burning money to acquire traffic and fans, but platforms and group leaders solve the traffic problem, making promotion and operation costs controllable.
4) There is no need to deploy in-store promoters or full-time customer service; group leaders proactively maintain relationships with group members, saving labor.
New retail often mentions content, traffic, fans, community, IP, etc., which traditional enterprises must spend time and effort to learn. Community group buying solves problems enterprises are not good at, without overbearing clauses, essentially giving them a high-speed rail ticket to new retail. So why worry?
**5. What dividends can enterprises reap from community group buying?**
When talking about dividends, most people think of 'hot sales' and 'harvesting,' which misinterprets community group buying as a 'new channel.' The hardest part of transforming to new retail is deeply understanding the reconstruction of 'people, goods, and places'; otherwise, enterprises will fall back into traditional sales methods like expanding channels, setting policies, and price wars.
With users first, dividends take on new meaning:
First, manufacturer brands directly reach consumers through community group buying platforms. In the past, enterprises only reached B-end distributors, and who bought the products and their feedback were vague, lacking a basis for 'meeting user needs.'
Second, let product strength speak and accept user testing. Community group buying users mostly purchase daily household consumer goods, with common category needs. Whether a product is popular is directly reflected in order data. If sales are low, enterprises won't suffer heavy losses from large inventory or high investment.
Third, community group buying is localized, providing enterprises with opportunities for small-scale testing and iteration. If a product sells poorly on a city platform, enterprises won't blindly expand to more cities; they will study the reasons and quickly optimize products or tactics based on feedback. If it is popular in a regional market, the chance of success in expanding to other markets is greater. Rapid iteration and continuous improvement deepen the fit between enterprises and the market, and between products and users.
Fourth, the most attractive dividend for traditional enterprises is helping them achieve 'C2F' and 'brand-effect unity.' In the community group buying scenario, consumers hold sovereignty and release their needs to the platform, allowing enterprises to customize products for consumers. The e-commerce wave created a batch of 'Taobao brands.' Similarly, enterprises that focus on community users and provide well-targeted products and services have the opportunity to become 'community brands' first. When product experience is excellent, sales naturally lead to brand. In the community group buying model, 'brand-effect unity' provides traditional manufacturers with a relatively fair new starting point.
In summary, risks are low, dividends are multiple, and small-scale trial and error is allowed. Once successful, it can leverage vast market space. By attempting under the principle of 'antifragility,' risks are controllable.
Tips will be paid 400-2000 yuan upon adoption.


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