Group buying leaders and group buying have become popular during the recent pandemic. Some joke that life in Shanghai depends on "group buying leaders." The confidence of venture capital queen Xu Xin, who invested in兴盛优选, in buying milk and bread through community groups, further popularized the term.
What kind of organization is a "group buying leader"? It is a new type of organization in the internet era: a unit organization.
The first wave of "group buying leaders" was linked to the rise and fall of community group buying in recent years; this is the second wave.
There are many other unit organizations, such as livestreaming influencers. They are sometimes collectively called "super individuals."
During the pandemic, group buying leaders were temporary organizations that will disappear after the pandemic ends. However, a stable unit organization has been brewing in the business system and is becoming a new channel hub.
Relational power, influence, and connective power are the keys to the contrast between the small size and large role of unit organizations.
Unit Organizations: Super Individuals
Seeing changes in technology and methods only shows the surface; seeing changes in organizational systems reveals deeper, even essential, changes.
Without the support of an organizational system, technology and methods cannot be automatically implemented.
Changes in organizational systems are enough to define eras. Because changes in organizational systems alter people's lifestyles and survival patterns.
Innovation first appears in the form of technology and is solidified through organizational innovation.
Unit organizations have emerged in the internet era. For example, "super individual" livestreaming influencers who rely on traffic and technology platforms, active on platforms; "group buying leaders" in community group buying who rely on technology platforms and personal networks, active at the intersection of online and offline; and "three-person groups" on e-commerce platforms.
These organizations are sometimes called super individuals. Because they are new organizations supported by technology and leveraging the influence, connectivity, and relational power of individuals (or a few people). Early on, they were called small organizations; now they are called unit organizations.
Three Major Evolutions in Organizational Forms
The basic unit in agricultural society was the family, with each household as a unit of agricultural production. The household contract responsibility system was merely a return to the family as the operational unit. In the absence of management capabilities, the family was the best operational unit. However, using the family as the production and operation unit cannot evolve into large-scale agricultural production.
Industrial society's large-scale industrial production required not only machines but also large organizations, aggregating more people into new organizations.
The First and Second Industrial Revolutions began with machine innovation, but they were not named the "Machine Age" because they were named after large-scale industrial production, hence the term "Industrial Civilization" (Industrial Age).
The Machine Age is named after technological means; large-scale industrial production is named after organizational methods.
Modern management has two supporting theoretical systems: one is the scientific management theory proposed by the "Father of Scientific Management"; the other is the modern organizational theory proposed by Weber, the "Father of Organizational Theory."
Large-scale industrial production required organizing more people to improve efficiency. Weber's modern organizational theory solved this problem by aggregating more people through modern organizations, i.e., the bureaucratic system. Modern organizations can now reach hundreds of thousands of people.
Typical organizations in the internet era are: first, ultra-large platforms, which are primarily supported by technology; second, unit organizations that rely on platforms. Unit organizations are small organizations that operate on platforms and cannot survive independently without them. The two are interdependent.
Therefore, from agricultural society to industrial society to information society, organizational evolution can be divided into three steps: family-based organizations, enterprise (company)-based organizations, and platform + unit organizations.
Three Major Unit Organizations
The characteristics of unit organizations are: few members, even primarily individuals. But they connect many people (or organizations) and have great energy. The core is influence, connectivity, and relational power.
Tuobuhua, CEO of Logic Thinking, said that internet society has two penetrating forces: one is technology penetrating all barriers. All monopoly barriers cannot stop the penetration of new technology; the other is individual penetration, where individual power can surpass organizations.
New organizations led by individuals (or a few individuals) are unit organizations. But they are completely different from the traditional self-employed, who are still traditional organizations.
In the internet era, new organizational forms have emerged, such as the early "three-person groups" of Handu Yishe, the "super individual" livestreaming influencers now popular on the internet, and the offline unit organizations that are forming a major trend. These are the three major forms of unit organizations currently present.
Handu Yishe's "three-person groups" differ from Haier's "xiaoweizhu" (small micro-owners). "Xiaoweizhu" are organizations formed by amoeba within the traditional organizational system, while "three-person groups" are independent operating organizations relying on Handu Yishe's brand, capital, and channels.
The characteristics of "three-person groups" are: first, reliance on large platforms, such as traffic relying on Alibaba; second, reliance on secondary platforms, such as brand and capital relying on Handu Yishe; third, reliance on the supply chain system, such as design and production relying on outsourcing.
The three systems that "three-person groups" rely on are the culmination of industrial and information societies.
The prototype of "super individuals" appeared as early as the WeChat business era. In the livestreaming era, super influencers were born. Now they have become a major source of e-commerce traffic.
However, "super individuals" are also dangerous. Many have been banned, and their rise and fall are both rapid. Therefore, "super individuals" are generally unstable unit organizations, fitting fashion and trend patterns.
Marketing guru Kotler defined fashion as "unpredictable, short-lived, and without social, economic, or political significance."
Unit Organizations: New Channel Hub
A hub is a key link in interconnections, or an important place or key point. Unit organizations currently have the tendency to serve as new hubs.
As an organizational system, they enjoy a status in the channel comparable to distributors, sub-distributors, and KA, thus becoming a new variable affecting the channel. This is the core message of this article.
"Three-person groups" and livestreaming influencers are unit organizations formed on platforms. Since they rely on platforms and secondary platforms, they are subject to platform constraints. Platforms can cut off the connection between "super individuals" and users at any time. As the center of a centralized organization, "super individuals" cannot have strong relationships with users, so the gathering and dispersal of fans are not entirely under their control.
There are many types of offline unit organizations. For example, early WeChat business leaders used technological tools and formed multi-level organizational systems, but as long as there are too many levels, the relationships are weak. Multi-level weak-relationship unit organizations gather and disperse quickly, making them uncontrollable.
In the early days of community group buying, both store owners and mothers were involved, and mothers gathered people faster because many had WeChat business experience. However, during operations, it becomes clear that the relationship systems formed by store owners through long-term offline operations are more important.
In true community group buying (such as兴盛优选), a platform without group buying leaders has no value. It is the group buying leaders who serve as the new bridge between the platform and users. Order formation and delivery mainly rely on the organizational power of the group buying leaders.
Unit organizations as new channel hubs are key in connecting users, serving as the hub from B-end to C-end. Only when the bC hub is opened can the entire channel chain be truly connected.
Can channel unit organizations play such an important role? It depends on our definition of unit organizations: influence, connectivity, and relational power.
The power of livestreaming influencers is influence and connectivity; the power of group buying leaders is relational power and connectivity; the power of "three-person groups" is supply chain connectivity.
The core power is connectivity. Because connectivity amplifies the power of super individuals.
New Channel Variable: New Ecosystem of Terminal Organizations
Traditional channels have three major variables: distributors, sub-distributors (second-tier wholesalers), and retailers. The value of these three variables has been fully exploited by the deep distribution system, leaving little room for further gains.
The combination of the internet and channels has created new variables. That is, the combination of terminal stores and users through technology platforms forms new channel organizations. In the community group buying system, this organization is called "group buying leader." In 2020, in our "three-dimensional connection" system, we called it "new store merchant."
Stores, especially small ones, were previously seen merely as places for sales. When stores and users form an organizational system through technology platforms, they gain the power to actively mobilize, influence, and activate community users. We can then consider them as a level of organizational system.
As an organizational system, its value lies not in the store itself but in the value of the organizational system.
In the past, the value of channels was in reaching terminals. After reaching terminals, channels were uncontrollable. The emergence of new organizational systems has formed an organizational system that reaches users on a large scale.
In the past, there were roughly two systems for reaching users: one was media, including traditional media (such as the four traditional media) and new internet media, which is large-scale indirect contact; the other was offline contact, such as immersive experiences.
The emergence of new store organizations provides a third way to reach users: large-scale channel-based user contact. The value of the new channel variable lies precisely here.
Three Major Tools of Unit Organizations
For example, in the past, we evaluated the value of distributors based on four indicators: number of agency brands, number of distribution staff, number of vehicles (now no longer considered), and terminal coverage. This is the power of a channel organization.
Similarly, when new channel organizations emerge, we need a set of criteria to judge their value. The emergence of this organizational system is enough to change the power structure of channels.
The three major tools of unit organizations are: strong offline user relationships, strong WeChat interaction with community users, and convenient transactions via mini-programs.
The smaller the store, the easier it is to form strong relationships with the community. Large stores have high employee turnover, and owners are not present, making it difficult to form strong relationships with a large number of users; at best, it's a one-way membership relationship.
Small stores are often in communities, and owners stand in the store every day. Coupled with China's lifestyle, where living radius overlaps with business radius, acquaintances meet in person, and familiar customers enter the store. Over time, strong community relationships form.
Strong community relationships exist whether or not they are utilized; this is the offline relationship. But the emergence of WeChat has changed the relationship between store owners and users, adding strong WeChat interaction.
In addition to face-to-face interaction, WeChat interaction is more convenient, forming community relationships. When mini-programs became popular, it became convenient to add mini-programs via WeChat, and online ordering became easy. Thus, online relationships also formed.
Unit organizations are virtual relationships formed with users based on the three-dimensional space of offline, community, and network. This virtual relationship is the unit organization, i.e., a new organization formed around individuals.
The core of channel unit organizations is strong offline relationships. Without offline relationships, the value of community and network relationships is greatly diminished. Therefore, we call them offline unit organizations.
Unit Organizations: bC Integration
Channel power includes wholesalers, sub-distributors (second-tier wholesalers), and KA stores. Street-side small stores are also valued as sales venues, but they basically lack leverage and are often handed over to sub-distributors for operation. Small stores are usually seen as sales points, not as forces influencing the channel. They are too small and numerous to exert force.
As individuals, small store owners are not important in the channel. A single small store as a sales venue has little impact on sales. But when owners form an organizational system with users through the three-dimensional space, they become an important force influencing the channel, enough to change channel power.
For a long time, we have called channel power channel push , with the focus starting from the manufacturer and extending through wholesalers, sub-distributors, and terminal merchants.
The power of channel unit organizations lies in influencing community business circles. If we look at the number of users of a single unit organization, it may not be many, but when user numbers form density in the community, the influence becomes significant.
Through channel unit organizations, users can be mobilized and activated, including activities like experiences and orders. In the channel system, this is an organizational system capable of matching the strategy of "encircling cities from rural areas."
Channel unit organizations, because they aggregate users to form channel power, are called channel pull. Because unit organizations are led by terminals (b-end) and influence users (C-end), they are also called bC integration.
bC integration is not about grasping both b and C; b and C in one unit organization is bC integration. The unit organization of bC integration becomes the bridge between the channel and users, so it is the new hub of the channel.
Source: Teacher Liu's Digital New Marketing (ID: liuchunxiong1964) Author: Liu Chunxiong
Are you "watching" me?