Introduction: The future community retail terminal will only take one form: store + group. Author | Tian Jing Reviewer | Wang Qiang Layout | He Wen
In 2022, Keke Select became one of the few cases of counter-cyclical growth amid the pandemic turmoil. In 2023, Keke Select once again became a rare case of dual growth in both store count and sales in the community retail sector.
After two years of exploration, from a single-point group buying model to a group buying + convenience + discount model, Keke Select has continuously iterated, reversed its fortunes, and carved out a new integrated model under new retail.
Li Bin, founder of Keke Select Community Retail, has repeatedly emphasized: "We predict that group buying, convenience, and discount will definitely become the basic trends in retail development."
With an opening speed of 2-3 stores per week, Keke Select has now expanded to 50 stores.
Facts prove that the two years of accumulation have laid a solid foundation, and this integrated model has entered the stage of "rapid expansion."
bC Integration
When I met Mr. Li Bin again, it was at his first store, located in the Miansi community in Shijiazhuang. The 150-square-meter store saw a steady stream of community residents coming and going, each picking up a group-bought tomatoes and potatoes. As the staff checked out, they said, "It's this busy every day; it's the norm now."
During the conversation, Mr. Li Bin's phone and WeChat were constantly buzzing. He sighed, "I'm too busy now. Suppliers and partners are all coming to consult. Every step must be strictly controlled; we can't afford to be careless."
Amid the sighs, he couldn't hide his excitement.
Mr. Li Bin emphasized: "Many people may not understand our model. To be precise, we use the bC integration model to operate community retail integrated stores."
Teacher Liu Chunxiong once mentioned in an article that to do bC integration, from 0 to 1, focus on 2C; from 1 to 100, focus on 2b.
Let's analyze Keke Select's bC integrated community retail model.
0-1 Stage: 2C
In 2022, Keke Select focused on community group buying, integrating community group buying with physical stores, and online with offline, creating scenario-based deep operations.
For example, in the breakfast scenario, they first offered a group-buy of a hand-grabbed pancake at minimal profit to drive traffic and acquire customers online at low prices. Once a certain volume was reached, they introduced product combinations, such as the pancake paired with sauce and boxed eggs. Why boxed eggs? Because boxed eggs have higher profit margins than loose eggs, thus balancing profits invisibly.
The operational logic at this stage was to use single-product breakthroughs, single-point penetration, and vertical deep operations. In the constructed consumption scenarios, they used low-price online acquisition and high-price online profit models, built communities on the group buying channel, precisely reached C-end users, and carried out retail around community residents, generating fission momentum.
Clearly, Keke's model at that time was more deeply focused on C-end retail. This was the 0-1 stage, emphasizing 2C. Building the bC relationship meant finding C-end users through the b-end, then precise marketing. At this time, the b-end was Keke Select itself.
In the first half of 2022, despite the recurring pandemic uncertainties, Keke Select added 15 community group buying convenience stores in 6 months.
1-100 Stage: 2b
bC integrated promotion involves both 2b and 2C. 2C is about awareness, 2b is about distribution. Clearly, with 15 new stores in 6 months, Keke Select's 2C awareness had reached a certain scale.
At this point, the focus began to shift toward the b-end, which needed to expand horizontally.
As of June this year, Keke Select has developed to 50+ stores. Unlike 2022, this year's model has extended from group buying + convenience to group buying + convenience + discount, becoming an empowering retail store.
Who do they empower? Mom-and-pop stores.
Mr. Li Bin said that one-third of the new stores this year were converted from mom-and-pop stores, some integrated from well-located mom-and-pop stores, and some newly opened. Of course, our empowerment target is small and medium supermarkets.
As is well known, traditional formats are gradually losing ground. More than 6 million mom-and-pop stores nationwide are caught in internal competition, with outdated management, aging product structures, low operational capabilities, and blocked information, once in a state of barely surviving.
Keke Select integrates many mom-and-pop stores, moving them toward chain operation.
Why are they all willing to join Keke Select? Because the prices are low enough.
In Mr. Li Bin's words, Keke Select's logic is to bring the products and prices of large supermarkets to the community doorstep, and with discounts, the product lines are all first-tier brands with high consumer awareness, so sell-through is very fast.
For example, a certain first-tier soy sauce brand, with a unit price three points lower than supermarkets, sold out all 1,000 items on the day they were stocked.
How do they achieve such low discounts?
Joint procurement. As the saying goes, a single thread cannot make a rope, and a single tree cannot make a forest. Only by uniting can they gain the strongest bargaining power. Keke Select aims for sustainable, long-term business, uniting a hundred stores and supporting price comparison across the entire network.
Mr. Li Bin did a data analysis: Where is the largest volume in Chinese retail? It's in mom-and-pop stores. As the capital of Hebei Province, Shijiazhuang has a total of over 12,300 mom-and-pop stores, with more than 5,000 in communities and over 3,000 in urban areas, showing a very high population density. This is a foreseeable and very considerable future.
From an industry perspective, first, it's the trend of community business; second, integration; third, chain operation. Combining these three allows negotiation with suppliers to get the lowest prices.
From a development model perspective, first, group buying; second, convenience; third, discount, which can attract more mom-and-pop stores to participate.
Using Teacher Liu Chunxiong's bC integration system to interpret:
First stage, do the b work well. Without b, there is no foundation.
Second stage, reach C from b. Because manufacturers have strong relationships with b, and b has strong relationships with C, marketing actions can target the C-end.
Third stage, from C to b. Because the 2C new product awareness is complete, the b-end gains confidence, activating the b-end.
Fourth stage, from b to more b. This is the deep distribution work of increasing shelf presence, and also the volume-increasing action.
In the above four stages, 2b and 2C actions transform into each other, acting as levers for each other. Putting the two action systems together achieves the trinity of awareness, transaction, and relationship. At this point, bC integration forms a virtuous closed loop.
Now, Keke Select has entered the stage from b to more b. During the conversation, I asked Mr. Li Bin: "Are you worried about being imitated?"
Mr. Li Bin answered firmly: "No. Keke Select's strongest competitiveness is our operational model. We have the best and most professional operations team. On the basis of an excellent team, we evolve new species, adapt suppliers, and incubate suppliers."
Light Model, Regionalization
How to adapt and incubate?
This raises a question: Does Keke Select, with 50 stores, have its own suppliers? No.
Does it have its own logistics? No.
Light Model: Incubating Suppliers
Mr. Li Bin emphasized that Keke Select aims for a light model. The model must be light, not heavy. We only have our own operations team; we don't do supply chain or logistics. Therefore, suppliers are required to meet three points in adaptation and incubation:
1. Fulfillment capability; 2. Product breadth; 3. Product competitiveness.
In simple terms: supply speed must be fast, products must be abundant, and product quality must be good.
Currently, Keke Select cooperates with more than 800 suppliers nationwide, and all products can achieve the highest cost-performance ratio in the market.
Mr. Li Bin gave an example: One of this year's shrimp suppliers said, "Wow, you've grown so fast. At this time last year, you were picking up a dozen or so items each time, but now you're picking up hundreds of items. You're amazing!"
Indeed, as Keke grows and expands, it also gives suppliers higher channel profits, strengthening mutual stickiness.
Mr. Li Bin said, "Keke is grateful for the suppliers that have grown with it. Keke should use platform thinking to build a terminal platform and a chain platform. In the future, we will incubate more such suppliers and make this platform bigger and stronger."
So, without the shackles of heavy supply chain and logistics models, Mr. Li Bin places great importance on operations.
Operations: Overall Output
Unlike other traditional cooperation models, Keke has a hard indicator in operations: overall service output.
Because mom-and-pop stores have a problem: severe aging and severe fragmentation. Just helping them solve the stocking problem isn't enough; we also need to help them solve the selling problem. So we must provide continuous traffic and operations, a one-stop service from stocking, product selection, to product distribution.
Keke Select's operations team has four people responsible for 50 stores. Each store has a community group, meaning one person is responsible for more than a dozen groups.
Keke Select has three store types: 10-20 square meter small stores; 60-80 square meter medium stores; and 150 square meter large stores.
For the 10-20 square meter small stores, the product selection logic is to adjust daily based on the long-tail effect. For the 60-80 square meter and 150 square meter stores, in addition to daily supply, they select 3-6 products daily, post them in the community groups, and use group buying prices for explosive traffic. The explosive product logic is adjusted daily based on seasonal trends or special holidays.
For example, durian in April, watermelon in June, flowers for Mother's Day, etc. Now entering the high summer temperatures, fresh produce, cold drinks, and beverages need to be continuously increased, and seasonal products like crayfish should also be kept up.
We observed that Keke's product selection logic starts from the user's perspective: whatever consumers need, Keke sells.
So, its product selection logic is completely reversed. B2B distributors have a product mindset: they sell whatever is in the warehouse. Keke Select has a user mindset: from the user's perspective, they sell whatever the user needs.
From the C-end back to the b-end, forcing sell-through, and then from C-end sell-through to incubate more b-ends, this shifts to a C-end promotion-oriented bC integrated channel model.
Teacher Liu Chunxiong once mentioned: Currently, the industries with mature bC integration are, first, circle bC integration, because there are "strong relationships" between b and C; second, community bC integration, because there are "strong connections" between b and C.
Through this strong community connection, Keke Select's model is made light, and the platform is made large.
But one issue deserves attention: In 2022, due to the pandemic, Keke's online proportion was too high, reaching 70%-80%.
Mr. Li Bin said: "As a retail store, having too high an online proportion is a failure, indicating a failure to convert to offline. So this year, the online-offline ratio has been adjusted to 5:5. But offline inventory is limited, so we need to use online traffic for conversion."
Two Traffic Elevators: Public Domain to Private Domain
I once saw a story about traffic—the elevator story: In a huge elevator, some people are running, some are doing push-ups, all very hard. The elevator goes directly from the 1st floor to the 100th floor. People ask: "How did you get up?"
Some answer "I ran up," some answer "I did push-ups up." Everyone believes reaching the 100th floor is due to their own efforts, but no one answers: "I took the elevator."
Traffic is that elevator. But times have dividends, and there are also wolves hunting, and when dividends decline, how does Keke Select convert traffic between the wolves and the decline?
It has two "traffic elevators": one is online Douyin, the other is offline courier stations.
Online Traffic Conversion: Douyin
In March this year, Keke Select established a Douyin department and opened a Douyin account. In April, they tested the waters with Douyin group buying for durian. Unexpectedly, they did it continuously for a week, shipping 400-500 items daily, all from customers who saw the video on Douyin and came to the store to order.
How popular was it? Many durian suppliers proactively approached: "I have a batch of goods. What price do you think is suitable? I'll deliver it to you."
Clearly, through Douyin's nearby recommendation function, Keke successfully converted online traffic into in-store traffic.
Here's a key action: Douyin has no order entry. Why?
Because online prices are too transparent, low-price competition is not a long-term solution and can easily enter a vicious cycle. So online must be converted to offline.
Why do Douyin?
Douyin is public domain traffic, and community groups are private domain traffic. During the three years of the pandemic, Keke established a solid user community. On this foundation, they transfer Douyin public domain traffic into community private domain traffic, aiming to retain more younger groups.
"Douyin has 800 million daily active users; we must pay attention to this track," Mr. Li Bin sighed.
Offline Inventory Grab: Courier Stations
Earlier we mentioned that one-third of the 50 stores were converted from mom-and-pop stores. This year, a new store type was added—courier stations.
As is well known, competition among mom-and-pop stores has become intense.
In terms of foot traffic, mom-and-pop stores are not as good as courier stations. This is an indisputable fact.
According to the "2021 China Convenience Store Development Report," the average number of customers per convenience store in China was 332 in 2019, dropping to 287 in 2020; while a courier station sees up to 800 people per day.
In terms of visit frequency, courier station users have higher stickiness. Based on the 2021 national average of 76.7 parcels per person, each consumer sends or receives a parcel every less than 5 days. From this perspective, stations have obvious advantages in traffic and user stickiness, which are key factors for physical stores to achieve performance growth.
But in-store traffic seems to run counter to station revenue.
For example, a Cainiao station in Jiangsu has monthly courier business revenue of 20,000 yuan, just enough to break even. But the subsequent fresh produce business can bring monthly revenue of 80,000 yuan, thus generating 15,000 yuan in profit for the store. Laundry services can also bring some stations a monthly income of 1,000 yuan.
So, monetizing station traffic is urgent.
Since 2018, Keke Select has participated in and witnessed the continuous innovation and trial and error of the retail format, but the core has always been centered on community commerce, which can achieve 100% compatibility with stations.
If a 20-square-meter station is expanded to 60-80 square meters, half for the station and half for a convenience store; or if a 60-square-meter convenience store is opened next to a 20-square-meter station, the traffic diversion can be directly monetized.
After all, one major advantage of stations is that they make consumers come to the store without any effort. Ask yourself: How many reasons are there now that can make consumers voluntarily come downstairs?
"Picking up a package" is one of the most convincing.
Therefore, compared with other offline retail formats, stations have advantages in traffic, distance, and scale that physical retail enterprises do not have when laying out community commerce, which has become key to seizing the community commercial front.
Mr. Li Bin is very optimistic about the conversion capability of stations. "Since April, a well-known national chain station platform has begun to proactively cooperate with Keke, and specific details are still under discussion."
The traffic of stations plus the light model operation of Keke Select is a strong alliance.
In fact, Keke Select, which started from community group buying, has a strong group buying gene. But the traffic brought in through group buying, especially online group buying, is somewhat "puffy." The traffic is too large, and the consumption is also too large. Many traffic may disappear after one time.
"Traffic with internet genes is like a mirage, looming and confusing. So if Keke does traffic, it must do positive traffic. Online traffic should be converted to offline, offline traffic should be expanded, and it should settle down and strengthen stickiness," Mr. Li Bin mentioned.
This is also Keke Select's mission and vision: to create online-offline integrated stores, unite and empower, build a hundred community chains, centralize procurement, and be more vital; professional community group buying operations to help stores grow and make them more competitive.
Trend Interpretation:
Why Keke Select?
In Teacher Liu's community, a teacher described the community retail business like this:
In a community, a community group leader with offline store support will defeat a group leader without an offline store; an offline store that operates its customer group well will defeat an offline store that doesn't. So whether you do the store first or the group first, the future community retail terminal will only take one form: store + group.
I fully agree.
Keke Select is practicing this sample.
Mr. Li Bin described it like this: "Now is the best era for the stock market, but also the worst era. What does that mean?"
For traditional retail, it's the worst era; but for traditional community group buying, it's the best era. For Keke Select, it's also the best era. Because Keke has grasped the two major trend lifelines of the times.
- First, doing community retail
- Second, doing convenience discounts
Ask yourself: How often do you visit a supermarket? Nowadays, consumer shopping habits have changed. Either shop online or shop downstairs in the community. Everything can be solved with more, faster, better, and cheaper. Supermarket quality has moved into mom-and-pop stores. So, what is new retail? Any model centered around the user is new retail. But retail models are constantly iterating; new retail will become old retail, but the essence of retail remains unchanged: "user-centric."
The "last mile of the community" consumption circle is constantly being created and becoming more mature, giving rise to specialized community formats.
Even some in the industry describe it like this: "Win the community, win the world."
Perhaps this is happening. Mr. Li Bin said, "What is the fundamental reason for Keke Select's rapid development? It's the positioning of the community direction. The three-year pandemic has educated and changed consumer shopping habits. Future community retail will definitely be a chain trend."
Second, it's doing convenience discounts.
The discount here is not about near-expiry discounts. Currently, Keke has entered the third stage. The first stage was doing direct-operated stores, single direct-operated stores; the second stage was model white-label stores; the third stage is a hundred community stores. At this time, we need to do penetration, achieve high penetration, and unite a hundred stores to do brand discount stores.
Why do discount stores?
In the post-pandemic era, people's consumption inevitably becomes cautious. "Good quality and low price" has become a more mainstream consumption value. When economic growth slows, although consumption momentum is relatively not as strong, the demand for consumption upgrades still exists widely. High-quality, low-price products are still the rigid demand of Chinese consumers.
Moreover, discount stores are not a retail industry that only relies on low-price sales; they are an innovative format in supermarket development. According to the industry-recognized definition, discount stores refer to continuously providing low-priced goods to consumers. Therefore, the core of discount store format innovation is how to create a low-cost operating system and system.
Chen Liping, a professor at Capital University of Economics and Business, said that the sustainable development of discount stores is most importantly reflected in sustained competition. In the next few years or even ten years, discount stores will become a development trend in China's supermarket industry and even the entire retail industry.
It can be foreseen that Keke Select has huge imagination space in the future.
Mr. Li Bin has set a goal for himself: in the next few years, to become the largest community chain platform in Shijiazhuang's circulation channels.
Final Thoughts
There is a famous saying in the business world: "All industries are worth redoing once." Traditional retail is no exception. Community retail gives traditional retail a historical opportunity to be redone.
When others were doing community group buying, Keke Select was already doing the community group buying + convenience model. When others were doing the group buying + convenience model, Keke was doing the group buying + convenience + Douyin model.
Retail models are constantly iterating, and new retail will become old retail. What remains unchanged is the essence of retail—"user-centric."
Around this essence, doing offline chain community retail is to seize the biggest dividend of this era. Therefore, in the future, any business model centered around the community is a suitable target for Keke Select, especially courier stations. As the biggest controller of terminal traffic, besides traffic monetization, new battlefields must be opened. Whether for Keke Select or the station platform, it's a future of mutual benefit, and the future is promising!
Further Reading