At the end of 2020, community group buying became the hottest trend. Giants have entered the fray, fighting fiercely over the vegetable baskets of ordinary people. The most heated topic is the impact of community group buying on supermarkets and convenience stores. Ye Guofu, founder of Miniso, even said, "If community group buying continues for another year or two, supermarkets over 500 square meters will basically have no future." People debate whether community group buying will truly revolutionize supermarkets, with some agreeing and others disagreeing, citing various positive and negative examples. However, few have truly focused on the supermarket owners themselves. They are the center of public opinion, yet strangely voiceless in this war of words. Today, let's approach this group and see what they really think about community group buying. -01- Physical stores have been struggling anyway; community group buying is just one of the reasons. Xiao Wang is a small supermarket owner in Beijing. He usually likes to share his daily life on short video platforms. As a store owner, he always enthusiastically reveals supermarket "secrets" in his videos—which herbal tea is the most authentic? How to test the authenticity of cigarettes? It's clear that he loves running a supermarket. However, when fans ask Xiao Wang about entering the supermarket business, he earnestly advises everyone not to open a store. This is because the life of a supermarket owner is now extremely difficult, full of bitterness and anxiety. First, the supermarket industry is saturated, competition is fierce, and survival is tough. Take Xiao Wang's experience: there are 20 supermarkets around him. Consumers can encounter one every few dozen meters. This is just within one residential area. In the course of business, competition and games are inevitable—when nearby supermarkets start cutting prices and offering specials, Xiao Wang's customer traffic decreases. He has no choice but to follow suit with discounts. The result is often mutual destruction. Second, supermarkets have always earned meager profits, barely enough for owners to make a living. Xiao Wang revealed that his supermarket's gross profit margin is only 20%. That means for a product priced at 10 yuan, he only earns 2 yuan. In supermarkets, FMCG products like milk and yogurt have gross margins as low as 10%. Daily chemical products have slightly higher margins, but only niche brands have high markups; popular brands have low profits. Everyone thinks cigarettes are highly profitable, but the gross margin is only 10%. This is because the profit on whole packs is not as high as imagined. Furthermore, Xiao Wang clearly feels that e-commerce has had a huge impact on physical stores. Nowadays, consumers only come to supermarkets for urgent FMCG items like cornstarch or soy sauce. At other times, they choose to order online with one click. In addition, food delivery platforms and new retail supermarkets are also eating into supermarket business. Recently, the arrival of community group buying giants has made things even worse. Community group buying sells daily necessities cheaper than supermarkets, including urgent items like cornstarch and soy sauce. Many consumers have switched to ordering through community group buying. As a result, supermarket business has become even more dismal. -02- After being recruited as a group leader by a giant, my life got even worse! Facing the surging wave of community group buying, Xiao Wang felt panicked. He feared his business would be taken away by the giants. Helpless, he decided to proactively cooperate with a giant and become a group leader. He already had a customer group of 300 people. After registering as a group leader on the platform, he began sending group-buying links regularly to earn commissions. However, after becoming a group leader, Xiao Wang sensed something was wrong. Take instant noodles as an example: the purchase price is 20 yuan, the selling price is 24 yuan, but the community group buying platform sells them for only 22 yuan. With only 2 yuan of profit, the giant still has to pay commissions to group leaders and wages to delivery drivers. Not only do they not make money, but they even lose money. This simply doesn't align with normal business logic. Moreover, as a group leader, Xiao Wang can only earn a maximum of 10% commission, and many special-priced items have no commission at all, leaving him with meager profits. After a day, Xiao Wang is lucky to earn 100 yuan, which is less than what he makes at the supermarket. Xiao Wang also discovered that some suppliers, for their own benefit, often provide community group buying platforms with products nearing expiration. For example, milk with two months left before expiration, which should have been recalled by the supplier, is instead sold on community group buying platforms. Consumers think they're getting a bargain, but they're actually the ones at a loss. The worst part is that Xiao Wang initially thought being a group leader would be a leisurely job—just waiting for customers to pick up their orders. Maybe it would even attract some foot traffic and boost supermarket sales. Imagination is beautiful, but reality is cruel. Xiao Wang now has to handle not only supermarket sales but also community group buying work—receiving goods, sorting, distributing, checking, picking up, and after-sales service. Some platforms assign a different delivery driver each time. They take a long time just to find Xiao Wang's supermarket, so they are often late. They also forget the replenishment and shortage issues he reminds them about. Some platforms are careless, piling goods in a mess—many eggs are broken, vegetables are wilted, and bananas are squashed, leaving Xiao Wang unable to explain to customers. Customers also pick up goods at irregular times. Elderly people prefer to pick up after morning exercise, while office workers prefer after work in the evening. This means Xiao Wang has to be busy from morning to night. Consumers who come to pick up goods are often in a hurry and have no interest in visiting the supermarket. Some customers, upon finding defects in the goods, will argue with Xiao Wang. Moreover, due to lack of operational skills, Xiao Wang's originally active WeChat group gradually became silent after becoming a community group buying group. Customers not interested in community group buying left the group one by one, and the resources Xiao Wang had painstakingly accumulated vanished. After a month, Xiao Wang not only earned little money but also became overwhelmed by community group buying, unable to attend to his supermarket business. "Whoever wants to do it can do it; I'm done!" Xiao Wang tore down the bright "XX Preferred Pickup Point" sign at the supermarket entrance and threw it to the ground. -03- What should community group buying giants do? In fact, the reason community group buying is being criticized this time is mainly because these giants are still using the internet model to harvest traffic, thereby disrupting and destroying the real economy. Xiao Wang's experience is the best proof. Whether he participates actively or passively, he cannot escape the fate of becoming cannon fodder. Of course, community group buying is not without merits. On one hand, it achieves inventory reduction through pre-sales. On the other hand, it can greatly transform the lower-tier market, bringing new vitality to this barren retail industry. What internet giants truly need to do is empower the entire industry chain, use their technology to improve industry efficiency, and truly benefit the people. For example, comprehensively improve user experience, bring consumers truly high-quality fresh produce, and provide affordable prices and convenient purchasing channels. For example, use big data to analyze regional consumption preferences, help supermarkets improve their retail efficiency, and achieve win-win cooperation. Another example is empowering the upstream industry chain, achieving refined operations, vigorously building warehousing and logistics, and truly reducing inventory losses for vegetable vendors. Only when giants truly provide social value will they not be condemned by everyone. In this community group buying melee, physical stores will not disappear, but a significant reduction in traffic is inevitable. As the tide of the times rolls forward and the giants' wars rage, we only hope that the world can give supermarket owners like Xiao Wang a chance to continue their businesses full of life's warmth. After all, that small supermarket is their whole life's sustenance. As the New Year approaches, Xiao Wang's supermarket has stocked a batch of oranges. The golden oranges are neatly arranged on the shelves, looking plump and delicious. He waves to passersby: "Want a couple of bags? Fresh oranges, very sweet." Source: E-commerce News (ID: kandianshang) Author: E-commerce Jun Tips will be paid 400-2000 yuan upon adoption.