---
title: "Supermarkets, Don't Panic! Is Community Group Buying Really Cheaper?"
description: "Low prices have become synonymous with community group buying, but is it truly cheaper than offline retail? This article analyzes the logic behind the 'cheap' label, reveals the real cost structure, and offers strategic advice for supermarkets to defend their market share."
author: "李彬  何年"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2021-05-17"
language: "en"
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---

# Supermarkets, Don't Panic! Is Community Group Buying Really Cheaper?

> Low prices have become synonymous with community group buying, but is it truly cheaper than offline retail? This article analyzes the logic behind the 'cheap' label, reveals the real cost structure, and offers strategic advice for supermarkets to defend their market share.

At some point, low prices became synonymous with community group buying, and in consumers' minds, 'cheap' has been equated with community group buying. 
At most, community group buying has been on the rise for only a year. What has caused it to occupy the concept of low prices in such a short time? And how should offline physical stores respond?
**-01-**
**Is community group buying necessarily cheaper than offline?**
**1. Where did the concept of cheap community group buying come from?**
When ordering takeout, as long as you open Meituan, Meituan Select lingers before your eyes like a spell. Even for young people living in first-tier cities who rarely cook and are extremely price-insensitive, faced with the full screen of 'absurd' prices on the online shelves, at this moment, they are still tempted.
Take Meituan Select as an example. After opening the platform, from top to bottom, **full refund → new user exclusive → flash sale → limited-time flash sale → special price vegetable market → full refund, promotional methods are dizzying.**
The other major platforms are similar, just a change in form but not in substance. What people encounter more are 0.01 yuan vegetables, 0.99 yuan eggs, and 1.99 yuan fruits. All the characters and images are conveying one message to consumers—cheap.
In addition, in everyone's traditional understanding, community group buying, as a new model, is a fusion of online and offline. The chain of community group buying is 'origin → platform → pickup point ← consumer'. Goods transition from the place of origin through the platform to the store, and consumers pick up in reverse. Compared with the traditional chain of origin → distributor → wholesaler → store → consumer, it virtually greatly reduces circulation links and significantly compresses costs.
But is that the truth?
**2. Is community group buying really cheaper than offline?**
During the May Day holiday, I specifically visited several large supermarkets and compared them with local community group buying platforms. The survey found that as long as it is a product on promotion in offline supermarkets, it is basically cheaper than the price on community group buying platforms.
Shuanghui ham sausage 50g*10 specification: supermarket stack display sells for 14.9 yuan per bag, while the platform sells for 15.9 yuan per bag.
Ariel laundry detergent 3kg+1.5kg specification: supermarket stack display sells for 49.9 yuan per set, calculated at 1.1 yuan per 100g in the large supermarket, while the platform sells 700g/bottle for 13.99 yuan, at 1.99 yuan per 100g.
Arowana rice 4kg specification: supermarket stack display sells for 19.9 yuan per bag, calculated at 4.97 yuan/kg, while the platform sells 5kg for 26.9 yuan per bag, at 5.38 yuan/kg.
Telunsu 250ml*12 specification: supermarket stack display sells for 88 yuan with buy one get one free, while the platform sells for 49.9 yuan per carton.
Why does this happen? An interview with internal staff of a local large supermarket explained, "**'Compressing the chain and saving costs' in community group buying is a false proposition. Only in actual operation do you realize that the chain of 'origin → platform → pickup point ← consumer' is impossible to achieve.** The circle is so small; everyone knows that most of the platform's goods are transferred from local first-tier distributors.
Direct sourcing from the place of origin is not impossible, but it accounts for only a minority. On one hand, the platform does not have such energy; on the other hand, direct sourcing will inevitably generate additional warehousing and logistics costs, making it not worth the loss.
So the real community group buying chain is often: origin → supplier → platform central warehouse → grid warehouse → pickup point ← consumer. In actual operation, these links may even increase, not decrease."
Take fresh produce, which has always been hot in the community group buying track, as an example. **In the community group buying process, there is a very fatal step: packaging non-standard fresh produce into 'standard products'.**
When I worked in a supermarket, I specifically timed the fresh produce section to see how long it takes to package a vegetable. From taking the vegetable to weighing, bagging, and labeling, the fastest employee can do it in 30 seconds, and normally it takes 45 seconds.
Assuming the fastest speed of packaging two portions per minute, we can calculate: an employee works 8 hours a day * 60 = 480 minutes, 480 minutes * 2 = 960 portions. If an employee's daily cost is 150 yuan, then the labor cost for packaging one portion of vegetables is nearly 0.2 yuan.
In addition, considering losses, water, electricity, gas, venue, and other costs, a portion of vegetables, even without making a profit, must be marked up by 1 yuan on the original cost. Moreover, this is only the step of goods arriving at the community group buying warehouse; afterwards, the goods need to be sorted and counted in different warehouses at various stages.
**-02-**
**The logic behind the establishment of the 'false proposition'**
So, how does the false proposition that community group buying is cheap actually hold up?
**1. Real-time reach vs. staged reach**
**We have always emphasized the planned goods of large supermarkets. Similarly, consumers go to large supermarkets with planned consumption.** The older generation, when going to supermarkets, habitually makes a shopping list. After arriving at the supermarket, they shop while browsing, and after a full circle, they purchase all the items on the list.
What problem does this face? Even if the large supermarket has stack displays and promotions, these products are not on my planned list. If I buy them, they may not be useful. Even if the price is very low, consumers still won't buy them, "because these products are not my 'cup of tea'. If I blindly pursue cheapness, even if I buy myself poor, I can't finish buying all the cheap things in the large supermarket."
But the items on my list, even if there are no promotions, or even if prices rise, I still need to buy them all in one stop, because I have already paid the sunk costs of time, transportation, and labor for this trip.
Looking back at community group buying, they open a group for 0.99 yuan or a box of milk that is 1-2 yuan lower than the market price, and try to make it known to everyone. Through community groups, Moments fission, message pushes, and other methods, they reach consumers in real time online, and then users directly place orders.
**At this point, you will find that the discounts of community group buying can reach consumers in real time. Compared with the online reach of community group buying, the traditional promotional methods of large supermarkets, such as leaflet distribution and car radio advertising, although they can play a certain role, can only reach consumers in stages, and the communication efficiency is too low.**
**2. No standards vs. strict thresholds**
Is community group buying really cheap? It is cheap, and it is not cheap.
**What is the first consideration for consumers when shopping offline—price, quality, appearance? But on community group buying platforms, they only need to consider one element: 'price', because community group buying has no standards; the only standard is price.**
If you hang around wholesale markets for a long time, you know that dishwashing liquid from the same manufacturer, with the same packaging specifications, can be sold at various prices such as 4.9, 5.9, 6.9 yuan, the only difference being the amount of active ingredients.
As for non-standard products, such as the '10 yuan for 5 dragon fruits' that community group buying shouts about every day, during the short holiday I specifically went offline to look at dragon fruits. An average dragon fruit weighs 6 liang (300g). 10 yuan for 5? As for secondary fruits weighing 2-3 liang (100-150g) each, the difference from first-grade fruits weighing 6 liang (300g) is not just a little.
But offline, this is not possible. Offline has strict testing standards. Some white-label products sold on online platforms cannot even enter offline supermarkets. As for cutting corners on product ingredients, offline is also subject to random inspections by the Market Supervision Administration at any time.
A simple example: products sold on community group buying all have a tolerance of 500g±50g, but in supermarkets, the Municipal Metrology Office does not allow this situation. 500g is 500g; no increase or decrease is allowed.
**3. Traffic vs. business**
The community group buying war has been going on for nearly a year, and the major platforms have invested real money in their billion-yuan subsidies. Looking back at the past, the thousand-group war, e-commerce war, food delivery war, ride-hailing war, etc., among many money-burning wars, only the community group buying war was explicitly prohibited by government documents. This shows the intensity of the subsidies from the giants in this community group buying war.
The major platforms are burning money on subsidies, fighting for the traffic of the sinking market. In March this year, the news of '41-year-old Huang Zheng retiring after achieving success' swept through Moments. Behind this retirement is Pinduoduo's impressive performance of nearly 800 million active users in its financial report.
800 million users, even in the face of the latest census data of 1.4 billion people, is still a terrifying number. **The interpretation behind this is that the ultimate goal of internet giants entering community group buying is to return to traffic.**
So, the entry of Meituan, Didi, and Duoduo is destined to be like a sharp knife stabbing into the sinking market, eager to develop new users and seize traffic. However, **what supermarkets want is not the beautiful data reported to investors; what supermarkets want is to break the circle, break the status quo, survive, and achieve GMV.**
One is traffic thinking, the other is business consideration.
**-03-**
**What should large supermarkets do?**
**Store + pickup point + home delivery + live streaming and short video**
Overall, the so-called low prices in community group buying to exchange for traffic are only relative to the prices of home delivery services and convenience stores. The real price system will not offer universal discounts across all categories, and may even be less cheap than supermarket promotions at stack displays.
From this perspective, **community group buying uses the same old marketing methods and traffic diversion methods that large supermarkets have always used, such as 'fresh produce to attract popularity, eggs as missiles'.**
**But when truly facing community group buying, how can large supermarkets effectively defend themselves?**
**First, pickup point (next-day delivery + local life)**
Develop a community group buying business segment. As the saying goes, know yourself and know your enemy, and you will never be defeated. Moreover, the community group buying business seems tailor-made for large supermarkets. **Large supermarket stores act as grid warehouses, then develop community stores as network points within a 3-5 km radius centered on the store, and then develop multiple group leaders from the network points.**
Large supermarkets directly perform sorting and distribution functions. It is equivalent to having the goods in the grid warehouse. Move the stacked goods in the large supermarket to the community group buying platform, and finally distribute them to community stores, where users pick up at the point.
Use high-frequency fresh produce to drive promotions of original store goods, and link pickup points and group leaders in the store area to bring goods closer to consumers.
**Then, through the community group buying business, accumulate loyal user fans, and empower local life businesses such as catering, surrounding tourism, beauty and hairdressing, physical examinations and oral care, health care, etc., covering food, drink, entertainment, and more.**
**Second, store (community group buying)**
In fact, in addition to entering the community group buying track, some large supermarkets were already vigilant when community group buying first entered their local cities, and tried to use community groups to do group buying business. Because the offline stores of large supermarkets generate a steady stream of traffic resources, and most of this traffic is precise user groups within the Third Ring Road. In this way, as long as a relay is initiated in the community group, group buying can be easily achieved.
Previously, I lurked in several large supermarket community groups. On March 8th Women's Day, a mask relay created nearly 300,000 yuan in revenue for a single product. **In the community group, with the support of manufacturer policies, the price is pushed to the extreme. After users place orders, they pick up at the large supermarket store, and online traffic feeds back offline.**
**Third, home delivery (same-day delivery, drop shipping)**
To cater to consumers' multi-scenario needs beyond planned goods, increase the timely consumption scenario of O2O home delivery business. In addition to store pickup, the community group buying also includes drop shipping business. Everything revolves around consumer-centric consumption scenarios, enhancing consumer stickiness to the platform and increasing user activity.
**Fourth, live streaming and short video (low frequency, high value, novel and special)**
Content e-commerce (short video): Consumer-centric, making consumers more dependent on and retained by the supermarket's own platform. Short video uploads: food making, housekeeping tips, new product promotions, user participation and enjoyment.
Live streaming e-commerce (scenario live streaming): Live streaming is both a product communication tool and has interactive participation functions. It can go into production areas to help sell agricultural products, go into factories to let consumers understand the production process, and also serve as a regional omni-channel promotion and brand publicity channel for brand owners.
Overall, it is about leveraging the supermarket's brand accumulation, supply chain, and store network resources to quickly expand pickup points and group leaders, build a community group buying platform, and through group leaders promote platform development to form a private domain user traffic pool.
**On the basis of private domain accumulation, with community group buying next-day delivery, supplemented by local life + short video + live streaming + home delivery business, build a perfect community e-commerce architecture.**
**Li Bin:** Currently provides community group buying technical services to national top 100 chain regional leading supermarket chains. Former co-founder of a regional community group buying platform with annual GMV of 200 million yuan, leading distributor digital transformation, with rich practical experience.
**Add WeChat to enter Teacher Li Bin's exchange group (large supermarkets from 0 to 1 doing community group buying)**
Once the tip is adopted, 400-2000 yuan will be paid.


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