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"Within a short time of its rise, community group buying has become well-known throughout the FMCG industry, from executives to sales staff. However, only by doing it do you realize how much remains unknown: How should community group buying be done? How should product strategies be set? How should organizational structures be designed? What partners should be chosen? How should resources be allocated? A series of questions follow one after another."

On the afternoon of June 25, the thematic salon seminar "Community Group Buying Is Coming on Strong: Brand Owners' Response Strategies" hosted by New Distribution was successfully held in Shanghai!

At the event, New Distribution invited over 40 enterprises, including leading community group buying platforms, top operators, and domestic and international FMCG brand owners, to exchange and discuss topics spanning dairy, snacks, paper products, beverages, beer, personal care, and baby products. After the seminar began, Wendy, senior analyst at New Distribution's research and consulting division, first interpreted New Distribution's three "Community Group Buying Industry Research Reports," sharing insights from New Distribution's research and thinking with the guests.

(Wendy, senior analyst at New Distribution's research and consulting division, speaking on stage)

Wendy shared the overall current state of community group buying development from the perspectives of industry trends and various value chain links—including brand owners, distributors, consumers, platforms, and even group leaders and small stores—as well as specific ways and execution strategies for brand owners to cooperate with community group buying in the future. She said: "How do we do community group buying and do it well? It's like building a house: we need pillars, goals, and a foundation.

First, we need clear goals and a clear strategic positioning. Second, how do we handle the three pillars of product selection, pricing, and partner selection?

Then, how do we build our warehousing and distribution logistics, and where do we invest our marketing and resources? This marketing includes full-ecosystem marketing, including group leader ground promotion.

Finally, our organizational structure, as the underlying architecture—how do we build it?"

After the report sharing, the brand owner sharing session began. New Distribution invited two executives from leading FMCG brands with deep cooperation experience with community group buying platforms to share practical cases and thoughts on cooperation with community group buying platforms, under the theme "Take the essence, discard the dross":

"Brand owners are now doing two things at once: on one hand, empowering their distributors to enter the new track; on the other hand, going direct themselves.

But traditional enterprises doing community group buying are bound to carry heavy burdens, falling into an ice-and-fire situation of discomfort and profit, but discomfort is definitely greater than profit. It's like the distributors who grew with the company were brothers, and now the relationship has suddenly become delicate. Overall, from the current perspective, community group buying will more likely serve as a supplement."

"Whether brand owners should cooperate with community group buying depends more on each brand's own positioning and business considerations. You can choose not to emphasize this channel, but please don't reject it, because even if you don't cooperate, community group buying can still get your products through various channels, making you a victim of price. It's better to cooperate proactively than to be forced in.

Moreover, don't worry about long-term viability now, because the current community group buying model is definitely not the final one; it is still evolving rapidly."

(Mr. Derui, partner of Maichun E-commerce, a leading TP company in China, speaking on stage)

Next, New Distribution specially invited Mr. Derui, partner of Maichun E-commerce, a leading TP company in China. From a third-party perspective outside community group buying platforms and suppliers, Derui provided an in-depth interpretation of the supply chain models of seven major community e-commerce platforms, including Meituan, Duoduo, Xingsheng, Chengxin, Shihuituan, and Hema. He also shared practical cases of cooperation between Maichun E-commerce, brand owners, and community group buying platforms, and discussed why community e-commerce, a trillion-yuan market newcomer, is rising despite traditional e-commerce traffic peaking.

"From around 2000 to 2010 was the peak era of hypermarkets; from 2010 to 2013 was the era of PC-based traditional e-commerce, with Taobao and JD; then from 2013 to 2017 was the era of mobile e-commerce with mixed competition. Now, why is community e-commerce so hot? We can see that last year, traditional e-commerce, including Alibaba, JD, and Suning, accounted for less than 25% of total online social retail sales nationwide.

In recent years, it's been obvious that traditional e-commerce faces high customer acquisition costs, traffic peaking, and intensifying competition. The core issue is the financial reports of listed companies; they drive the need to continuously find growth points. Then they discover that some categories have huge market space that traditional e-commerce cannot cover—fresh produce, a high-frequency, rigid-demand category involving a market of several trillion yuan. So community group buying needs to prioritize fresh produce, using high-frequency items to drive low-frequency or high-margin items in the future. That's the strategy of the giants.

What value do they bring? Empowering idle social resources. For example, mom-and-pop stores could only sell standard products, not fresh fruits and vegetables, or fruit sellers at the community gate couldn't sell standard products. Now they bring incremental value to idle resources, creating additional income opportunities."

In the final session, New Distribution set up a roundtable discussion, dividing guests into five groups. Led by Jasmine, partner of New Distribution's research and consulting division, each group selected one topic from the following eight for discussion and interaction, with each group leader presenting the results on stage.

1. Attitude orientation—embrace, reject, or balance? 2. Marketing strategy—How to differentiate products, set prices, and run promotions? 3. Organizational strategy—How to structure, set performance metrics, and divide roles? 4. Channel positioning—What role and function in the existing channel module? 5. Operational strategy—Are there differences in operational strategies across markets and regions? 6. Partners—What kind of partners to choose: local distributors, designated distributors, or platform TP companies? 7. Focus direction—What are your views on national community group buying platforms weakening group leaders and evolving toward 'platform-style e-commerce'? 8. Investment strategy—What are the current types and proportions of investment? Are they meeting expectations? Will investment continue to increase in the future?

With this, the New Distribution community group buying thematic salon seminar concluded successfully. New Distribution will continue to organize more similar thematic activities in the future, linking more FMCG industry resources to discuss industry development. We welcome everyone to stay tuned.

Review: Asher

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