---
title: "The 'Golden Age' of Community Group Buying Comes to an End"
description: "The golden age of community group buying has officially ended this year, as small and batch-purchase platforms see significant declines while large platforms remain stable. The market is now dominated by giants like Meituan and Pinduoduo, forcing local platforms to transform and seek new strategies."
author: "十里"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2023-10-24"
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# The 'Golden Age' of Community Group Buying Comes to an End

> The golden age of community group buying has officially ended this year, as small and batch-purchase platforms see significant declines while large platforms remain stable. The market is now dominated by giants like Meituan and Pinduoduo, forcing local platforms to transform and seek new strategies.

**Source** | Lingshou

"The golden age of community group buying has officially come to an end this year." A entrepreneur deeply involved in local community group buying told Lingshou that while large-scale group buying platforms remain relatively stable, with some even showing slight growth compared to the same period last year, small and batch-purchase platforms have seen significant declines.

**Looking back, in less than three years, community group buying has gone from a capital boom to the successive failures of major brands such as Shihuotuan and Niwomin.** Especially in 2020, thanks to the special "window of opportunity" brought by the pandemic, community group buying triggered the most intense "subsidy war" in internet history.

However, this year, the market has been almost completely monopolized by large platforms, and it is rare to hear of new partnerships between community group buying startups and capital.

Xingsheng Youxuan, the veteran of community group buying, has launched its group store business, directly challenging Meituan's Tomorrow-Da Supermarket. Zhihuazhiguo, which has been deeply rooted in Hunan for 7 years, continues to build a business model combining community group buying, single-product development, and stall wholesale, planning to expand into neighboring provinces such as Hubei and Jiangxi.

At the same time, e-commerce giants Taobao and JD.com are also actively preparing, showing their determination to re-enter the community group buying market. Duoduo Maicai and Meituan Youxuan continue their duopoly, and according to data from the first half of 2022, the two together hold over 80% of the market share.

**Community group buying is like a besieged city: old players inside are struggling to hold on, while those outside are eager to get a piece of the pie.**

**Giants 'Hold the Fort'**

"It's obvious that Duoduo and Meituan are gradually differentiating their models and positioning," said the entrepreneur above. Especially in product selection, Duoduo Maicai focuses more on price; even if the products sometimes do not match the description, most users still accept them due to the price advantage.

Meanwhile, Meituan focuses more on local retail. In the second half of last year, Meituan launched the "Tomorrow-Da Supermarket" service. Then, in early June, the platform further advanced the delivery time for next-day delivery to noon, clearly accelerating competition with Duoduo Maicai and differentiating itself.

Three years ago, community group buying became a battleground for all companies. The core logic was that high-frequency, low-priced shopping could not only help companies acquire more users and expand into lower-tier markets but also build stronger user barriers and drive growth in other business areas.

However, after a "burning money war" of tens of billions, since the second half of last year, both Meituan and Duoduo Maicai have adjusted their strategic direction, shifting from pure growth to positive gross margin development.

Therefore, both sides are constantly adjusting their strategies. Duoduo Maicai claims to pay more attention to product quality and operational management, while Meituan continues to optimize its business model and user experience. However, this means Meituan needs to invest more in supply chain management, involving warehouse construction, cold-chain logistics, and comprehensive quality control.

Beyond these differences, **the two platforms also differ significantly in their treatment of group leaders.**

Group leaders have two main sources of income: first, when group members place orders independently and choose to pick up at the group leader's pickup point, the group leader receives a certain percentage commission; second, when group purchases are made through links shared by the group leader, once the required number of participants is reached, the group leader receives additional cash rewards, typically ranging from a few yuan to dozens of yuan.

"In the initial market share competition era, due to large-scale capital subsidies, Meituan's commission was as high as 10%, and Duoduo Maicai was between 5% and 6%. Plus referral rewards, at that time, just by attracting friends, family, and in-store customers, monthly income could reach around 4,000 yuan," a group leader from a provincial capital city told Lingshou.

However, as the market landscape became clearer and capital subsidies decreased, commissions and rewards on both platforms have significantly declined. Now, Meituan Youxuan's commission has dropped to 3%, and Duoduo Maicai is only 1%. Similarly, group purchase rewards have been greatly reduced, and now group leaders can only earn a few hundred yuan in extra income per month.

This undoubtedly increases pressure on group leaders, as with reduced income, the number of orders they need to handle has not significantly decreased. Compared to the initial stage, the extra income is now negligible for group leaders.

"Now, group leaders can only earn enough to make a living, far from the dozens or even hundreds of yuan they could earn when the product was first launched," said the group leader from the provincial capital city.

**Local Groups Accelerate Transformation**

After Duoduo Maicai and Meituan Youxuan entered the market with aggressive strategies, local group buying platforms have been clearly suppressed, and their days are not as good as before.

"This year, local group buying platforms have seen significant declines in data, some even only reaching 30% of their past business volume, and more and more platforms are closing down," said the entrepreneur above. This has led many small platforms to transform, from traditional physical stores to group-buying stores.

According to media reports, Hunan's community group buying platform "Zhihuazhiguo" and Fujian's "Diao Daojia" currently have business scales of 5-8 billion yuan. Zhihuazhiguo not only has extensive business in Hunan but has also expanded to Hubei, Jiangxi, and other places, and is expected to exceed 1 billion yuan in revenue this year.

However, industry insiders reveal that regional community group buying brands like Zhihuazhiguo and Jiubai Street have not achieved significant success when attempting cross-regional expansion.

The reasons are not only the competitive pressure from large platforms like Duoduo Maicai and Meituan Youxuan. There are also other external factors. For example, the overall consumer environment has been sluggish this year. Additionally, after the pandemic, a large number of offline physical retail stores have opened. These stores have also actively entered the group buying market and attracted users with low-price strategies, further diverting customers from community group buying platforms.

**"Therefore, the community group buying market is gradually maturing, and there is an urgent need for more innovation and iteration. Although community group buying has quickly emerged in the past few years, facing such a huge retail market, the current model alone is far from sufficient,"** said the entrepreneur above.

For enterprises in the batch purchase business, a feasible strategy is to open community stores.

In the current market environment, group leaders hold more initiative, and many batch purchase platforms are "kidnapped" by group leaders, who have full control over which products can be sold and which cannot, leaving the batch purchase platforms in a passive position. This is mainly because batch purchase platforms cannot directly reach C-end consumers.

Therefore, batch purchase platforms can consider using the community store model to alleviate this problem, leveraging their advantages in supply chain and operations to regain market initiative.

Secondly, entering the wholesale market is also a direction worth considering. Although the threshold for such a layout is relatively high, requiring strong capabilities in product selection, capital, and other aspects, the wholesale market has its inherent advantages. Many small retailers prefer the wholesale market as their source of goods, which provides batch purchase platforms with an opportunity to reach a large amount of precise B-end traffic, while also opening up markets for their own products.

Equally important is the development of lower-tier markets. Currently, group buying and batch purchasing are mainly concentrated in provincial capitals and large cities, while lower-tier markets have not received sufficient attention. For this part of the market, simplifying the business model and using direct operation, empowering local markets through stations or community stores, can be considered.

Community group buying and batch purchase businesses, facing multiple pressures, need to consider their development direction and strategies more comprehensively and flexibly to adapt to changing market demands. **This not only requires innovation and iteration of existing business models but also full utilization of various resources and advantages to adapt to market volatility and competition.**

**What Does the Future Hold?**

In the second half of this year, the heat of the community group buying market has risen again, with Alibaba and JD.com preparing to re-enter this arena.

Recently, recruitment information shows that Taobao Maicai is heavily recruiting business development (BD) personnel in Shanghai's Jiading District, aiming to comprehensively promote Taobao Maicai and achieve predetermined sales and user growth targets.

For Alibaba, this is by no means an accidental move. Strategic actions include integrating the two business lines, Taocaicai and Taoxianda, to build the "Taobao Maicai" brand. In addition, it claims to expand aggressively, not only in Shanghai but also continuing to penetrate the East China market, demonstrating Alibaba's determination to make another push into community group buying.

JD.com has also renamed "Jingxi Pinpin" to "JD Pinpin" and has made significant efforts in organizational structure and team building. First, JD Pinpin was incorporated into the newly established innovative retail department, and then it recruited key positions such as business development and product managers in multiple cities to optimize the business process and resource integration of community group buying.

Both Alibaba and JD.com hope to enter or reposition themselves in the community group buying market through low-price strategies. Their purpose is clear: **to find new development opportunities through low-price advantages.**

However, achieving this goal is not easy, especially when existing market leaders like Meituan and Pinduoduo still face profitability challenges. According to financial report data, Meituan's new business still lost money last year. Pinduoduo's Duoduo Maicai, despite a long period of market competition, has only achieved "positive gross margin" in a few provinces so far.

**This situation has led participants in the entire community group buying market, whether platform operators, group leaders, or ordinary users, to gradually lose interest in these market models that have already been "played out."**

Especially group leaders, as key roles in community group buying, are experiencing large-scale attrition. "The remaining group leaders mostly value low purchase prices; many physical store owners will purchase goods on the platform and then resell them," said the group leader from the provincial capital city, using the platform's low-priced products to obtain higher profits.

In response, Meituan and Pinduoduo have begun to implement some control measures. For example, Meituan imposes sales restrictions on specific accounts, while Pinduoduo may directly cancel orders in the backend. Nevertheless, the number of full-time group leaders in the industry is decreasing, and previously active part-time group leaders are gradually withdrawing due to the complexity of operations.

As the number of group leaders decreases, the frequency of user usage also declines, thereby increasing operational pressure on major platforms. This is how platforms that once attracted a large number of users and group leaders with low prices and high commissions are gradually exposing their shortcomings due to internal friction.

"The number of full-time group leaders in the industry is decreasing, and previously active part-time group leaders are gradually withdrawing because they find the operations cumbersome," said the group leader from the provincial capital city.

It is also for this reason that local groups have "disappeared," and their business models are difficult to replicate on a large scale in third- and fourth-tier cities and rural markets. Capital groups are also "scarred" and have not yet found a breakthrough in profitability, relying only on special financial settlement methods and reducing commissions to narrow losses.

Perhaps the business model of community group buying is still operating steadily, but **under the intertwined influence of uncertainty and multiple expectations, this field is destined to continue undergoing profound changes and fierce market competition.**


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