---
title: "The Enemy of Time: Has Time Defeated Community Group Buying?"
description: "Community group buying, once a booming sector, is now facing its first major shakeout as major players like Shixianghui and Tongcheng Life have collapsed, and Shihui Tuan and Orange Heart优选 have significantly contracted. The model, which relies on low prices and subsidies, struggles with quality control, after-sales service, and rampant fraud, leading to questions about its long-term viability."
author: "薛机智x"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2021-09-15"
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---

# The Enemy of Time: Has Time Defeated Community Group Buying?

> Community group buying, once a booming sector, is now facing its first major shakeout as major players like Shixianghui and Tongcheng Life have collapsed, and Shihui Tuan and Orange Heart优选 have significantly contracted. The model, which relies on low prices and subsidies, struggles with quality control, after-sales service, and rampant fraud, leading to questions about its long-term viability.

**Click to read the original article for details**
Source: Lu Jiu Finance (ID: liujiucaijing69)
“
 _**Community group buying, like the previous sharing economy wave, is more of a tool for giants to attract traffic, and at a high cost.**_****
”
Recently, community group buying has frequently encountered problems: starting with the collapse of Shixianghui and Tongcheng Life, followed by the large-scale contraction of Shihui Tuan and Orange Heart优选, the once-sunrise industry is now experiencing its first wave of consolidation.
The main players still struggling are only a few, such as Meituan优选, Duoduo买菜, and Xing Sheng优选.
However, there are also players who are not afraid of death and are still entering. When all players are short on funds and trembling, Alibaba is still persisting. Hema Market has been renamed Taocaicai. If Shihui Tuan cannot hold on in the future, it is likely to be acquired by Alibaba. Currently, Shihui Tuan already has a traffic entrance on Taobao. **In fact, as early as last year, when Lu Jiu Finance communicated with several insiders in community group buying, we judged that this industry would eventually be very brutal, and it is highly likely that an independent business model would not hold, or would need significant adjustments. Ultimately, it might just be a traffic-generating business, making money is difficult.** The specific reasons are as follows. **First, quality control is very poor.** Community group buying has basically become a gathering place for defective products. You buy, and the next day they deliver it to you, one bag per person, no choice, and counterfeit goods are rampant.
In the lower-tier market, the "old iron" (a term for friends) lack everything but time. They can wait for online shopping, and strolling through the vegetable market is a pleasure. The model of vegetable market + online shopping provides a much better experience than community group buying, so the only thing community group buying can do is maintain low prices. Next, Lu Jiu Finance will analyze from these four directions. To better present our views, Lu Jiu Finance specially conducted a one-week test in Henan, with sampling targets being Meituan优选, Duoduo买菜, Orange Heart优选, Hema Market, Xing Sheng优选, and Shihui Tuan. An expert who has long observed the community group buying market, Li Zian (pseudonym), said: "The entire community group buying market may not be profitable, but as long as it can solve supply chain and quality control issues, it can still become a viable business in the lower-tier market, and overall sales data and scale will continue to rise."
## **Personal Test: A Big Comparison of Six Community Group Buying Platforms**
Lu Jiu Finance dispatched colleague Xiaoyu to conduct an actual test in Jiaozuo, Henan. Xiaoyu's experiment started on August 4 and lasted four days. He said: "The community group buying stations near my home are mostly linked to merchants in residential areas, such as courier stations, milk tea shops, snack shops, etc. After ordering the day before on your phone by choosing a suitable pickup station, you generally receive a reminder that the goods have arrived by 16:00 the next afternoon." **Xiaoyu placed orders for fresh food on Xing Sheng优选, Meituan优选, Duoduo买菜, Hema Market, Shihui Tuan, and Orange Heart优选, using a controlled variable approach, trying to select SKUs with the same or similar names on the platforms, and recorded the entire process in a detailed table.**
From the table, it can be seen that the products on these platforms more or less have quality issues.
Especially for non-standard products like fruits and vegetables, as well as fresh goods, there may be damage during procurement, storage, and transportation, or improper storage leading to poor freshness, making it difficult to achieve the quality assurance of one-on-one, buy-now-sell-now at the vegetable market. **After experiencing the pickup process, Xiaoyu found that the storage environments for community group buying vary greatly.** Stations relying on courier points often have dirty and messy storage environments, with goods placed on courier shelves, and some even have small insects flying around.
Stations like snack shops have relatively better environments, with dedicated storage areas for goods, and some group leaders even help put goods in the refrigerator. However, these are strongly related to the cooperative stations selected by the platform and the group leaders themselves, making it difficult for community group buying platforms to control.
### **Defect One: Who Manages Product Quality?**
**For product quality issues, the root cause for the platform may lie in product selection. A certain community group buying platform revealed to Lu Jiu Finance the relevant process for product selection. When selecting products, community group buying platforms mainly focus on two aspects: quality and cost-effectiveness.** First, suppliers need to have relevant qualification certificates for fresh products, such as meat needing to meet national quarantine standards. Second, they compare prices; products with good quality and high cost-effectiveness are often selected for listing.
The platform also regularly reviews suppliers. Once recorded, if problems arise later, or if there are many refunds within a certain period, they are generally eliminated. They also said: "This is basically an industry rule." It can be seen that the platform's product selection process does not prioritize quality but also considers cost-effectiveness. Quality requirements only need to meet relevant standards, and after problems occur, they actively intervene to control product quality issues.
But the fact is, without strict product selection standards for pre-screening, it is difficult to guarantee high-quality and stable product supply. A user who frequently orders from community group buying, Muzi, said: "I feel that buying from community group buying depends on luck. Sometimes you get very fresh vegetables; sometimes if a product isn't selling well and I happen to buy it, then what I get isn't fresh. It's hard to have all products in one order be satisfactory. But because the price is already low, plus some red packet discounts, I'm purely trying my luck to get a bargain, so I don't bother contacting the group leader or customer service for after-sales." You get what you pay for; the low price of community group buying comes at the cost of unguaranteed product quality.
There seem to be many bargains to be had on the platform, but if you unfortunately buy stale vegetables or fruits, many users often choose to swallow their losses, after all, they don't have high expectations. The worst result is just not using the platform or buying that product again in the future. At that point, the purpose of community group buying is achieved—it has both traffic and transaction volume, and the bargain hunters have been taken advantage of in return.
Even if the platform guarantees quick after-sales refunds, who is responsible for the time cost lost by users in the series of steps from ordering, pickup, and after-sales negotiation? **Are the "old iron" in the lower-tier market willingly paying an IQ tax? Who should manage community group buying? Should the "old iron" be reduced to being harvested like leeks?** It can be seen that from the end of 2020 to now, national regulation of community group buying has been continuously strengthened. In December 2020, the State Administration for Market Regulation proposed "nine prohibitions" at an administrative guidance meeting, mainly focusing on low-price dumping, big data price discrimination, product quality control, and other aspects, emphasizing that internet platform companies must strictly regulate community group buying operations. In March this year, the State Administration for Market Regulation imposed maximum fines on companies behind Orange Heart优选, Duoduo买菜, Meituan优选, Shihui Tuan, and Shixianghui for improper pricing behavior, totaling 6.5 million yuan. On May 27, due to improper pricing behavior, the State Administration for Market Regulation imposed another administrative penalty on Shihui Tuan, fining 1.5 million yuan and ordering the "Shihui Tuan" platform to suspend operations in Jiangsu for three days for rectification. On May 28, 12 departments including the Ministry of Commerce issued another document, supporting convenience stores, fresh food supermarkets, etc., to enter communities, and establishing and improving community group buying access rules. **These actions demonstrate the country's determination to rectify unfair competition in community group buying and other business formats, help establish a fair and competitive market, and prevent disorderly expansion of capital.****
The subsidy war has been halted, and low-price promotional activities have had to stop. Platforms accustomed to "burning money" for traffic must find a new balance between expanding markets and increasing revenue. The story of community group buying, in the future, must be told differently.**
## **Defect Two: Unspeakable After-Sales Service**
During the after-sales process, Xiaoyu found that for Xing Sheng优选, Hema Market, Shihui Tuan, and Duoduo买菜, if there were after-sales issues, they needed to contact the group leader at the pickup station; there was no online after-sales customer service. Orange Heart优选 and Meituan优选 could contact customer service online to negotiate refunds. A certain Orange Heart优选 group leader said: "If what you bought isn't suitable, you can tell me, and I'll contact the higher-ups to help with after-sales. That's possible." A Zhongtong Express group leader (for Duoduo买菜, Hema Market, Shihui Tuan) said: "If there's a problem with your product, contact me, and I'll report it and handle it promptly." **On August 16, Xiaoyu reported to Meituan优选's online customer service that the durian mille crepe cake was sour. The customer service said: "The cake you bought has passed the after-sales period. For fresh products, if there's a problem, you need to contact customer service within three days. This order has exceeded the refund application deadline, so we cannot help you apply for a refund."** The durian mille crepe cake's outer packaging indicated a 180-day shelf life if frozen. Why is it still classified as a fresh product?
"It was such a big cake. When I received it, it was still frozen. At the time, I didn't really want to eat it, so I froze it. Later, when I remembered to eat it, there was a quality issue." Xiaoyu said he couldn't get after-sales service and had to swallow his losses. Three days later, on August 19, Meituan优选 customer service called Xiaoyu: "The online customer service said it was past the after-sales period, but when we were reviewing, we saw that you had uploaded relevant product evidence. After discovering this issue, we also reported it. Sorry for the trouble. The online customer service may not have handled this flexibly, so I'm calling to apologize. I'll process a refund for your order shortly." **Regarding the definition of fresh products, Xiaoyu also expressed his doubt: "The durian mille crepe cake says it can be frozen for months, so why is it classified as fresh, and why must I do after-sales within three days?"** The customer service responded: "Preferred orders have an after-sales processing period. Because it's hard to determine how fresh products are stored within three days, we have some time limits for this. But I saw that this product says frozen. Maybe the customer service agent was too rigid. After all, this kind of cake can be affected by weather and transportation, which might cause the cream to turn sour and affect taste. So when we reviewed your issue, we called you at around 9 p.m. to apologize and explain the situation." Although Xiaoyu's issue was ultimately resolved properly by Meituan优选, for platforms like Xing Sheng优选, Hema Market, Shihui Tuan, and Duoduo买菜, where online after-sales customer service is not available, if individuals are not sensitive to the price of defective products, they may choose to bear the consequences of product quality issues rather than contact the group leader offline to protect their rights, as offline after-sales has higher time and communication costs compared to online.
**Defect Three: Serious Fake Orders and Corruption**
In the community e-commerce industry, fake orders have a beautiful name: bulk commodity procurement. Participants include platforms, regional managers, and suppliers. Platforms need to show beautiful GMV to investors, regional managers need to complete their tasks, and suppliers need to make money.
Currently, fake orders in community e-commerce have gone through two eras, and the methods have been upgraded.
First, the first era was very crude, and the data was obviously fake.
Lu Jiu Finance previously saw some backend data through some community group buying group leader backends. Many products showed obvious signs of fake orders, with data fluctuating strangely. One hour there would be no sales, then suddenly data would explode in a certain time period, and there were many bulk orders.
Later, after understanding, we realized the mystery.
**First, the ones doing fake orders are definitely suppliers, using To B bulk product procurement. These products are generally white sugar, food, and fresh items. Suppliers would create their own group leader account, then after the product is listed, the supply price is 1 yuan, the sales price is 0.8 yuan, extracting a 0.2 yuan subsidy from the platform. Finally, they would falsely supply and falsely ship, not actually delivering goods.**
A former executive who left a community e-commerce company revealed to Lu Jiu Finance that in the community group buying industry, fake orders are almost the only means for companies to raise funds. Several startups do this, and they have an unspoken understanding not to expose each other's behavior, making it an industry norm, an unwritten rule.
"Even investors know they are doing fake orders, but they don't care and still invest, because this is the trend, and more people will come in later, as long as they are not the last to hold the bag. Moreover, people might think that the model will work out as they burn money, and fake orders don't matter; it's an e-commerce industry convention," this person, who wished to remain anonymous, told Lu Jiu Finance.
**Now fake orders have entered the advanced version, and the backend data looks normal.**
First, after bulk products are listed, the system automatically generates a series of virtual group leaders. For example, for a ton of sugar, it will generate a hundred group leaders to purchase. The backend looks very real, no problem at all, but in essence, it's still fake orders, falsely supplying and shipping.
Suppliers are actually very willing to cooperate with regional managers and platforms in fake orders because they can make money without shipping goods.
"In the end, maybe the founder or executives knew from the beginning that this business was unreliable, so they started making fake data to raise funds, blowing up the balloon bigger and bigger. It looks beautiful, but it will eventually explode. That's why you've been seeing community group buying blowups frequently recently. It's not that a certain company has poor financials or management; it's that this business has fundamental problems, so everyone up and down is making money and cashing out," another industry insider who has long observed community group buying told Lu Jiu Finance.
In addition, according to relevant sources, corruption is also very serious in community group buying, especially in the supply chain. Many procurement personnel take bribes from both ends: they take money from suppliers below and company subsidies above, ultimately leading to losses in quality control and pricing, and worsening the reputation.
"Especially city procurement managers. They decide what products go on the shelves. If you want your product listed, you have to pay me, and even for a slot, you have to pay. This means truly good products can't get in. Community group buying, in the final analysis, has big problems in management and original intent. Several startups never really intended to do the business well; we just cooperated to put on a show," a supplier who once supplied to community group buying lamented.
**Defect Four: Aftermath of the Pandemic Product**
If it weren't for the pandemic, community group buying would have been hard to become popular. The initiator of all this was Xing Sheng优选.
During the pandemic, Xing Sheng优选's rapid development in communities made all e-commerce giants see hope in the lower-tier market. So giants like Alibaba, JD.com, Meituan, Pinduoduo, and Didi all entered the market directly or indirectly.
With the continuous influx of capital and giants, SKUs expanded from fresh products to all categories, delighting bargain-hunting users: 1 cent for 6 packs of tissues, 2 yuan for 1 jin of eggs, and even 49 yuan for a counterfeit Dior foundation sample.
As the "Hundred Regiments War" became increasingly fierce, everyone was frantically seizing high ground, and the battle had extended to the lower-tier market, even spreading to more remote towns and villages.
**But is this sales model born during the pandemic really suitable for the lower-tier market?**
**First, does community e-commerce improve business efficiency?** Based on Lu Jiu Finance's current research, users of community group buying are basically there to get bargains. Most of the time, these users prefer to go to the vegetable market to buy fresh products. In the lower-tier market, the "old iron" lack nothing but time. Strolling through the vegetable market is a way to enjoy life, and you can also pick products to ensure freshness.
Lu Jiu Finance also asked some consumers about their views on community group buying. Ms. Li said: "Many times I order because I find the price is relatively affordable and I want to take advantage of new user benefits. I have a rough expectation of the products. Sometimes I'm pleasantly surprised, sometimes it's just 'normal performance.' It's all a matter of probability. When I really need to buy a lot of vegetables and fruits, I still prefer to go to the supermarket and pick them on-site for peace of mind."
**Second, what about user experience?** Some might say community e-commerce can help the "old iron" buy more branded products, but in essence, for some strange SKUs, the "old iron" in the lower-tier market can also directly choose to shop on traditional e-commerce channels, where prices and quality are more guaranteed.
Now logistics can deliver to every village, and community e-commerce doesn't provide any special value. Rather than helping the "old iron," community e-commerce is deceiving them. Counterfeit Dior and La Mer products are flooding community e-commerce channels.
**Third, does it save costs?** From the current perspective, compared to the vegetable market + online shopping model, community group buying does not save costs. It just allows some products to achieve next-day delivery in rural areas.
But there is also a problem: this next-day delivery is often based on low quality, and in this low-margin business logic, the terminal group leaders can't make money.
A Xing Sheng优选 group leader in Henan said: "I've been doing this for over half a year, and I haven't made much money from it. From March to now, I've only withdrawn a little over 100 yuan in commission. There are many other stations nearby, and many people don't know about Xing Sheng优选. I keep this because I sometimes order from it myself. I'm not doing it to make money; it can bring me traffic. When people come to pick up their orders, they'll find that my shop sells duck products, which complements my business."
**From the group leader's perspective, the commission level in community group buying may be a false need for them. Especially since the era of burning money to attract group leaders has passed, they care more about what benefits becoming a group leader can bring to their existing business.**
In summary, in the post-pandemic era, as people's lives return to normal, the community group buying model is becoming increasingly problematic. In a sense, it's somewhat against human nature, making slow-paced rural people accept the so-called convenience of urban life.
## **Conclusion: Those Leaving May Be the Most Calm**
Community group buying, which originated in third-, fourth-, and fifth-tier cities, was once considered the last battle of mobile internet.
Its flames even showed signs of spreading to first- and second-tier cities. Many giants entered through subsidies. Due to intensified competition, community group buying was once seen by the media as competing with small vendors, leaving traditional offline merchants with no way to survive.
But does community group buying itself have a way to survive? Can its business model exist independently? It should be noted that in third-, fourth-, and fifth-tier cities, consumers lack nothing but time. And the biggest enemy of community group buying is also time.
As money burning continues, community group buying performs poorly in product quality, price, delivery time, after-sales service, and other dimensions, while consumers have more choices: traditional vegetable markets, supermarkets, convenience stores, street stalls, etc., are all competitors to community group buying.
Community group buying is not a business model that can exist independently by burning money.
**After a period of tug-of-war competition, community group buying is not a friend of time, but an enemy of time.**
From its popularity during the pandemic to becoming the last traffic entrance for big platforms, and now to its current awkward situation, community group buying deserves reflection from all practitioners.
Perhaps the players who are now leaving have truly calmed down, while those still struggling may still believe that time and money can burn out a future.
**Are you "watching" me?**


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