-01- Brief Review of Each Platform's Gains and Losses in 2020 Meituan and Duoduo achieved a breakthrough from 0 to 20 million orders per day in 2020, entering about 2,000 cities (including counties), and increasing their user base by tens of millions. It can be said that they have achieved fruitful results. However, behind the encouraging numbers lie less encouraging facts (data in this article comes from platform founders' conference calls, internal platform sources, industry consensus, and senior experts; some data are reasonable estimates based on the above). 1. Scale Advantages of Each Platform At the end of 2020 (early 2021), community group buying platforms reached their historical peak, with the largest scale reaching about 30 million orders per day. Due to the Spring Festival decline, the current maximum scale is about 20 million orders per day, roughly equivalent to the situation in December 2020. From the current situation, the scale distribution of platforms is roughly: the first tier includes Meituan and Duoduo at 20 million orders per day; the second tier includes Xingsheng, Chengxin, and Shihuituan at about 10-15 million orders per day; the third tier includes Alibaba's Hema/BuyBuyCai and Jingxi at a few million, negligible. Although the scale differences between tiers are huge, about 10 million orders per day, there is essentially no major impact. Because when breaking down the scale of each tier by province, we find that the difference between the first and second tiers is very small, with only a few regions showing significant differences: In most provinces, the first tier has a scale of about 500,000 orders per day, while the second tier has about 250,000 orders per day. Although the former is double the latter, from a business impact perspective, there is no obvious difference, and it does not significantly affect the supply chain or warehousing and distribution. 250,000 orders per day corresponds to an annual scale of about 500 million, with about 250 SKUs, each SKU about 1,000 orders per day. 500,000 orders per day corresponds to an annual scale of about 1 billion, with about 450 SKUs, each SKU about 1,100 orders per day. Combined, this scale is similar to opening 1-2 large vegetable markets in each province. If spread across provincial capitals, prefecture-level cities, counties, and townships, it is like opening several stalls selling vegetables and groceries in each administrative region. Compared to subverting offline stores and vegetable markets, it is better than nothing. Compared to competitors, it is just a matter of six of one, half a dozen of the other. 2. Supply Chains of Each Platform Assuming a platform has 20 million orders per day, it means that 95% of provinces have less than 2 million orders per day. In most provinces, suppliers' average daily net profit is about a few hundred yuan. A first-tier wholesaler in a province, engaged in traditional wholesale business, has annual turnover of tens of millions to hundreds of millions, with annual net profit of over one million. Coming to supply community group buying, they work from dawn to dusk, completing delivery, product selection, pricing, operations, etc., with doubled operational difficulty, and finally earn a few hundred yuan a day, 100,000 yuan a year. It is really chicken ribs—tasteless to eat, but a pity to discard. In fact, except for a few suppliers in large provinces (less than 10% of the total), most suppliers do not make money and do not have volume. Except for Xingsheng, the infrastructure for processing warehouses/shared warehouses in the supply chain is basically zero for other platforms. Suppliers have neither volume nor profit, and the key link in the supply chain—processing—is missing. How can the platform's supply chain advantage and stability be discussed? 3. Warehousing and Distribution of Each Platform In the warehousing and distribution link, some platforms' central warehouses are distributed across multiple cities, and shared warehouses and central warehouses are not in the same park. These unfavorable factors' costs are either added to the price by suppliers, or suppliers absorb them and cannot continue, affecting supply chain stability, or the platform subsidizes them. Grid warehouses, due to low group efficiency and order density, are mostly still in a loss-making state, and most do not meet the 12 o'clock delivery time, with costs generally above 0.6 yuan. This single node accounts for 8.6% of order revenue. In general, the warehousing and distribution link has only achieved the ability to cope and reduce errors, far from being timely, economical, and profitable. 4. Comprehensive Evaluation of Each Platform Therefore, in 2020, Meituan, Duoduo, and Chengxin only gained national scale, but were weak in every region. From the perspective of each business link, they were either just established and urgently need optimization, or completely absent. Compared to Meituan and Duoduo, Xingsheng, although not advantageous in national scale, is complete in business links and focuses on a few regions in Hunan and Hubei, where it is the king. With regional advantages, Xingsheng has its own foundation. If only four provinces were available for expansion—Hunan (representing Xingsheng), Jiangxi (representing Duoduo), Sichuan (representing Chengxin), and Guangdong (representing Meituan)—and without considering Xingsheng's capital and alliances, I believe Hunan would not be the first target of attack, and might even be the last. This proves that the achievements of Meituan, Duoduo, and Chengxin are not solid, while Xingsheng's achievements are more solid. This characteristic is very important in 2021-2023. Xingsheng's only obvious problem is that it has only one base, with no room for maneuver. Not only do I affirm Xingsheng Youxuan, but suppliers and brand owners in the industry also think so. The following is a survey feedback from brand owners and distributors conducted by New Distribution: Chengxin and Shihuituan are between Meituan, Duoduo, and Xingsheng, not clearly on either side. Alibaba and JD.com are latecomers, lacking in speed, scale, quality, and stability of results. If I must summarize the achievements of 2020, I think Meituan and Duoduo ≥ Xingsheng > Chengxin and Shihuituan > Alibaba and Jingxi. If I must summarize the strategies of 2020, I think Meituan, Duoduo, and Chengxin adopted a blitzkrieg strategy seeking speed and national scale, while Xingsheng adopted a regional strategy seeking quality and regional scale. The advantages and disadvantages of the blitzkrieg are that it quickly set up a national footprint, but most regions were not digested, quality is poor, and there are unstable factors. The advantages and disadvantages of the regional strategy are that it established certain barriers in regional markets, preserved achievements, and built a high-quality business closed loop, but faces difficulties in breaking into other regions. -02- The Situation and Characteristics of Community Group Buying from 2021 to 2023 I believe the community group buying war is divided into three stages: market expansion in 2021, confrontation and attrition in 2022-2023, and strategic offensive from 2024 onwards. The main feature of the market expansion stage is that there is huge room for growth, and all parties can achieve several-fold growth without intense confrontation and attrition. There is some confrontation and attrition, but it is local, phased, and low-intensity. Jointly developing undeveloped markets is the theme. In the market expansion stage, due to the need to respond to competition, it is necessary to implement a regional segmentation strategy, and through "developing key regions" + "acquisitions," eventually form regional segmented markets in some provinces. If regional segmentation is not formed, 2022 will be difficult. The main feature of the confrontation and attrition stage is that market space shrinks rapidly, and all parties increasingly rely on seizing each other's share for growth, which becomes the dominant growth logic. Jointly developing undeveloped markets will become a local, non-dominant growth logic. In the confrontation and attrition stage, regional segmentation will become the most important or only competitive means and achievement. Platforms that do not obtain regional segmented markets may be substantially marginalized, even if their data looks good. In the strategic offensive stage, all parties conduct refined operations based on regional segmented markets, relying on strategic layouts implemented in 2021-2023 and group-level layouts beyond community group buying, competing with rivals and gradually encroaching on their regional segmented markets. In the above three stages, there will be alliances and counter-alliances both within and outside the community group buying battlefield. Before specific analysis, we need to understand a question: Why is community group buying a regional economies of scale rather than a national economies of scale like e-commerce? The core reason is the next-day delivery and zero inventory characteristics of community group buying. Community group buying products go from supplier warehouses to platform central warehouses, then to grid warehouses, and finally to group leaders, with a time of only 16-24 hours, and platforms cannot set up large-scale inventory. So suppliers must be local, delivering accurately at specified times. Non-local suppliers cannot do this. From the supply chain perspective, community group buying must be localized and regional. From the warehousing and distribution perspective, it is the same: a central warehouse in one province cannot supply other provinces. Because the distance is too far, cross-province transit takes several hours, making it impossible to deliver to townships hundreds of kilometers away in neighboring provinces before 12 o'clock the next day. So each province is isolated from each other, and users, products, suppliers, and warehousing are all based on provinces. Therefore, community group buying only has regional economies of scale, not national economies of scale. This basic characteristic will be mentioned many times in later articles. (JD.com also has next-day delivery and localized warehousing, but JD.com has local inventory, so its regional economies of scale are not strong; the difference will be shared later if there is an opportunity.) 1. Analysis of the Situation in 2021 1.1 Market Expansion Vast Market Space & Most Markets Without Barriers From a geographical perspective, Meituan, Duoduo, and Chengxin currently occupy about 2,000 cities (including counties). To cover 34 provincial-level administrative regions, more than 300 prefecture-level cities, more than 2,000 counties, and tens of thousands of townships, there is still considerable space. For the cities entered, more than 95% of provinces have daily orders not exceeding 2 million, with most concentrated at 500,000. It can be seen that they have only entered, not yet developed and occupied. Simulated distribution of a platform's provincial scale in 2020 From the predicted industry scale ceiling, the current total industry scale is about 70 million orders per day, still 10 times away from the industry ceiling of 600 million to 1 billion orders per day. Therefore, some platforms have set tasks for 2021 to increase 5-10 times. It is expected that the total industry scale in 2021 will reach 300 million orders per day, which is very likely. Among them, Meituan and Duoduo will become the first tier, reaching 80 million orders per day. Xingsheng, Chengxin, and Shihuituan will become the second tier, reaching 40 million orders per day. Alibaba/BuyBuyCai and Jingxi will become the third tier, reaching 20 million orders per day. The total industry scale will reach 320 million orders per day. Alibaba/BuyBuyCai and Jingxi started from zero and reached 20 million orders in one year. In a more competitive and disadvantageous situation, completing Meituan and Duoduo's 2020 achievements is already not easy. Other platforms are expected to grow 4 times in 2021, as their internal targets are 5-10 times. In the national market and most regional markets (except a few regions like Hunan), no party has built a decent barrier. I mentioned this in the first section of this article. With large market space and no decent barriers, all parties plan to invest at least 10 billion yuan in 2021. Therefore, market expansion is bound to be the main theme of 2021. 1.2 Regional Segmentation is Imperative 1.2.1 Latecomers Without Regional Segmentation Will Be Fully Suppressed Scale Advantage According to the prediction of 80 million orders for the first tier, 40 million for the second tier, and 20 million for the third tier, combined with actual conditions, I simulated the provincial scale distribution of each tier in 2021, as follows: Converting the above table, we get the following table: From the table, it can be seen that by the end of 2021, the most backward provinces of the first tier will reach 2 million orders per day, basically forming a nationwide suppression of the second and third tiers. If all adopt a national expansion strategy, by the end of 2021, the first tier can achieve universal regional scale advantages, with each province reaching more than 2 million orders per day. Supply Chain Advantage Let's see what it means for a province to reach more than 2 million orders per day. I continue to break down the scale into three indicators: SKU count, daily turnover/supplier, and daily net profit/supplier, as shown below: For the above table, two analyses can be made:

  1. From the 2020 scale comparison, provinces with a scale of 2 million orders increased SKU count by 122% and supplier turnover and net profit by 80% compared to provinces with 500,000 orders.
  2. From the comparison between 2021 and 2020, platforms with provincial scales generally above 2 million orders increased SKU count by 67%-300% and supplier turnover and net profit by 20%-140% compared to those below 2 million. That is, when the first tier reaches 80 million orders per day, the national market will see significant improvements in SKU, supplier turnover, and net profit. SKU improvement means higher user stickiness, higher average order value, and higher monetization efficiency. Supplier turnover and net profit improvement means stronger supply chain advantages, more suppliers, better service and quality, and lower prices. Currently, many suppliers are willing to operate in some provinces but not others, mainly because the regional scale is too small. Warehousing and Distribution Advantage In the warehousing and distribution link, the cost reduction from increasing central warehouse scale is not obvious, and central warehouse costs account for a relatively low proportion. Grid warehouse costs are the focus of the "central warehouse-grid warehouse-group leader" link, but the scale effect of grid warehouses is based on group efficiency and community order density. Provincial-level scale effects are ineffective, and more optimization is needed in ground promotion and operations. A testable fact is that grid warehouses in larger regions like Guangdong and Jiangxi also generally suffer losses or are unprofitable, with no obvious difference from grid warehouses in smaller regions. However, with good group efficiency, even smaller provincial regions can generally be profitable. But in the future, provinces with huge volumes, such as 7-4 million orders per day, will generate some warehousing and distribution advantages, mainly reflected in huge scale advantages and lower costs. Summary In summary, in 2021, the first tier will fully suppress the second and third tiers, mainly forming a nationwide regional advantage in the supply chain, and in a few regions, the warehousing and distribution link can suppress the second and third tiers. In this case, if the second and third tiers still insist on prioritizing national market expansion rather than regional and key area priorities, forming regional segmentation, failure is obvious. Unless the second tier (Xingsheng, Chengxin, Shihuituan) achieves faster speed and greater growth than the first tier (Meituan, Duoduo), such as 6 times growth. The 2020 contest shows this is unrealistic. Data Explanation (Non-professionals can skip) The prediction method for provincial scale distribution of each tier is as follows:

Estimate the daily total orders for the first, second, and third tiers.

Estimate the data for the largest province, e.g., 2.5 million orders per day.

Make the scale distribution as smooth as possible, e.g., maximum 2.5 million, then 2 million, 1.5 million, 1 million, 500,000, 250,000. The 2021 tiers are estimated based on 2020 tiers and overall growth rate, e.g., from maximum 2.5 million, growth rate should be less than overall growth (4 times), about 3, reaching 7 million. The minimum and second minimum should exceed 4 times to ensure overall growth is 4 times.

Fill in the number of provinces to match the total daily orders. There are multiple solutions; any solution is fine and does not affect the result.

Finally, obtain the provincial scale distribution data for each tier. After multiple calculations, only the daily total orders seriously affect the final result; the other three conditions do not affect the result no matter how they change. So it doesn't matter if some platforms' data do not strictly match my estimates, e.g., Xingsheng in Hunan clearly exceeds 2.5 million orders per day. Interested friends can make their own estimates. Therefore, as long as the prediction of daily total orders for each tier is correct, the result is basically correct. First, we need to argue the total industry scale in 2021. The industry generally believes that community group buying can reach 1.5-2.5 trillion yuan by 2025, with daily orders of about 600 million to 1 billion. Therefore, reaching about 40% of 2025 in 2021, i.e., 200-400 million orders per day, is very optimistic. This article takes 300 million orders per day as reasonable. Then, combined with the total industry scale, estimate the total scale of each tier. The third tier can basically be considered as starting from 2021, reaching Meituan and Duoduo's one-year achievement of about 20 million orders per day is reasonable. Even reaching 30 million orders per day does not affect the result. If the first and second tiers grow 4 times, reaching 40 million and 80 million orders per day respectively, the total scale of all platforms reaches 320 million orders per day, consistent with the 2021 industry scale. The result is as described in the text. If the first tier grows faster than 4 times, the final result is that the first tier will suppress the second and third tiers even more comprehensively. Can the second tier achieve growth of more than 4 times, e.g., 5 or 6 times? I think not. Reasons are as follows: If the second tier could achieve it, from the 2020 situation, the first tier could also achieve higher growth, which would not significantly affect the final result. If the second tier grows 5 times or more, the 2021 industry scale would approach 400 million orders per day, reaching 50% of the industry ceiling, which I think is unlikely. In summary, the daily total orders for each tier in 2021 are reasonable, so the provincial scale distribution for each tier is reasonable. Therefore, the final conclusion that "the first tier will fully suppress the second and third tiers" is also reasonable. To reassure everyone about this conclusion, I present the calculation results assuming "2021 industry total scale is about 300 million orders per day, the first tier grows from 20 million to 70 million orders per day, and the second tier grows from 15 million to 45 million orders per day (first tier growth rate 3.5 times, second tier 3 times)": This result is basically consistent with the text's estimate (right table), and the same conclusion can be drawn that "the first tier comprehensively suppresses the second and third tiers nationwide." I think "in 2021, the first tier reaches 80 million orders per day, and the second tier reaches 40 million orders per day" is a more reasonable prediction, although Meituan and Duoduo believe they can reach 100 million orders per day. If they really achieve 100 million orders per day, the conclusion that "the first tier fully suppresses the second and third tiers" is even more valid. 1.2.2 Regional Segmentation Gradually Forms If executing national market expansion, the first tier will have 4 provinces reaching 5-7 million orders per day, already forming substantive regional segmentation. If a province can reach 5-7 million orders per day, other platforms can basically only reach 1-3 million orders per day, and one platform's scale is basically equivalent to the sum of other platforms' scales in that province. Reasons are as follows:

  1. In 2021, the average provincial scale is about 11 million orders per day (300 million/27). If a platform reaches 6-7 million orders per day in Province A, the remaining platforms only have 1-2 million orders per day each.
  2. If other platforms generally have 2-4 million orders per day, Province A's scale would approach 20 million orders per day. Not only is it far larger than other provinces at the same time, but it is also very close to the provincial industry ceiling of 30 million orders per day per province (800 million/27).
  3. If multiple platforms have large scales in the same province, it means intense competition, and each platform's input-output ratio is relatively small compared to other provinces, making it unlikely for any platform to develop a super-large scale in that region. That is, as the national market expands, substantive regional segmentation will naturally form. Let's roughly look at the gap between the dominant player and other parties in a segmented market: The dominant platform increases SKU count by 100%-260% and supplier turnover and net profit by 20%-95% compared to competitors. In warehousing and distribution, because regional scale increases 3 times, order density and group efficiency can be significantly improved. Referring to Xingsheng Youxuan in Hunan with over 4 million orders per day, achieving break-even and the industry's lowest fulfillment cost, the dominant platform will achieve break-even in warehousing and distribution. With improvements in supply chain, products, and warehousing, the platform improves its economic model, has more price space to benefit users, and user experience significantly leads competitors. Data Explanation (Non-professionals can skip) In fact, when executing a national market expansion priority strategy, the regional segmentation pattern described above may not necessarily appear. It may also form the pattern described in the table below: As described in the left table, the huge provincial scale of 6-7 million orders per day disappears, forming a more spindle-shaped scale distribution. This indicates that although the first tier comprehensively suppresses the second and third tiers nationwide, it does not achieve absolute advantage in every regional market. It is likely that the provinces with the largest scales for the first tier are also the provinces with the largest scales for competitors, and neither side can afford to give up, leading to a hard fight. This result is uncomfortable for all parties. The reasons for this situation are as follows: The acceptance and penetration rate of a single province is difficult to increase rapidly in the short term, causing some provinces to be unable to accommodate scales much larger than others. Platforms do not pay enough attention to advantageous regions, leading to insufficient regional development and inability to become segmented markets. Other platforms pay enough attention to certain regions, taking away share, preventing a single platform from developing into a segmented market. The platform's business development quality is limited and cannot bear such a large-scale business. 1.2.3 What Strategy to Choose When Speed is Insufficient and Competitors Have Obvious Advantages As analyzed above, the second and third tiers face the problem of insufficient speed and obvious competitor advantages. What strategy should they adopt? After the end of the War of Resistance Against Japan in 1945, the Kuomintang and the Communist Party faced this situation. Our party adopted many strategies, such as occupying rural areas and certain regions, such as Northeast and Shaan-Gan-Ning. Whether rural or certain regions, in summary, it was regional segmentation, developed from base areas. The Kuomintang adopted a strategy of national + key cities. This is not to say that the Kuomintang's strategy in 1945 was bad, but that our party adopted the best strategy under the circumstances. If we compare the 1945 civil war between the Kuomintang and the Communist Party with the 2021 community group buying competition, there are still many similarities in fundamentals. I will continue to analyze the issues and strategies of regional segmentation later. 2. Analysis of the Situation in 2022-2023 2.1 Confrontation and Attrition In 2021, whether it is the primary market's Xingsheng and Chengxin, or the secondary market's Meituan, Duoduo, Alibaba, and JD.com, although everyone will consume 10-20 billion yuan in funds, they will also gain huge business increases. Whether for the capital market or within the group, it is a great hope. Therefore, funds and resources in 2022-2023 will be more abundant. (Platforms with poor business progress in 2021 are likely to be marginalized.) With sufficient funds and resources, but market space is not as large as in 2021, and with multiple competitors, large amounts of funds, and resources entering the market in the short term, any party's growth of one unit of business means the other party must give up 0.5 units, with the other 0.5 units coming from new markets. In 2021, any party's growth of one unit of business meant the other party only had to give up 0.1 or 0.3 units, with the other 0.9 or 0.7 units coming from new markets. Therefore, the main theme of 2022 is confrontation and attrition, different from the market expansion theme of 2021. When will this confrontation and attrition end? Two necessary conditions must be met: 1. All parties' effective strength is exhausted, unable to launch large-scale attacks; 2. Absolute advantage in regional segmented markets is formed, whether in scale or business links. If effective strength is exhausted, confrontation across the country will end. If 1-2 parties form absolute advantage in a region, confrontation in that region will end, and other regions will continue until 1-2 parties emerge with absolute advantage. In some cases, because all parties have not paid enough attention or made early layouts in certain regions, or because all parties have participated and mutual attrition prevents layout, no party can form absolute advantage. In this case, as various regions end their battles one after another, all parties' effective strength is greatly consumed, input-output is severely mismatched, and the region will also cease fighting, forming a segmented zone where no party has an advantage, similar to certain areas in the Middle East. What pattern will form at this stage? The following pattern will form: Platforms that have not obtained solid regional segmented markets will be eliminated or become very passive, only able to hold on or rely on capital transfusion or acquisition. Different platforms occupy different regional segmented markets, with 1-2 parties holding absolute advantage in each market. There are several regions where no party can form absolute advantage, stalemate, and cannot become regional segmented markets. 2.2 Acquisitions and Mergers Intense competition will make all parties uncomfortable, and no one is willing to engage in meaningless attrition, especially capital parties. Remember the "Kuaidi, Dianping, Ele.me, Mobike" by Daming Lake? In addition to avoiding competitive attrition, there is also the need for business competition. If in 2021, the first tier's Meituan and Duoduo achieve their goals, and the second and third tiers also layout as predicted above, Alibaba and JD.com will definitely not accept this result. Acquiring Xingsheng, Shihuituan, or even Chengxin becomes the only way to continue "rolling up sleeves." Even if all parties adopt a regional segmentation priority strategy and form a relatively balanced situation, some people will still form competitive advantages through acquisitions and mergers. Therefore, acquisitions and mergers are inevitable, likely occurring at the end of 2021, and no later than the end of 2022. 2.3 Decisive Factors Emerge I have an intuitive feeling that the core influencing factors of community group buying, and in what form they appear, are not yet clear. I think this factor may appear in 2021 and be confirmed in 2022-2023. Reasons are as follows:
  4. Only when the business develops to a certain stage and key problems arise can key factors be found, and then confirmed over 1-2 years. Take food delivery as an example: Meituan entered at the end of 2013, and in early 2015, all parties began to realize the importance of delivery. At the end of 2015, before the Meituan-Dianping merger, neither side had defeated the other. The entire year of 2016 business development did not show that riders played a key role in competition. Therefore, it takes a long time for key factors to take effect and be confirmed.
  5. After finding key factors, time is needed to explore the combination of key factors with business, driven by both business and key factors, and verify it. Still taking food delivery as an example, from 2013 to 2017, first the campus market, then the mid-to-high-end white-collar market, and finally the low-tier market. Behind each market segment is a standard delivery system and merchant support, ultimately forming a closed loop driven by "users-delivery-merchants." Of course, this is from a retrospective perspective. From a business development perspective, traffic at that time was also one of the key factors. Traffic is reflected on the user side of the "user-delivery-merchant" triangle. Without Meituan-Dianping's traffic advantage, this triangle might not have been built in competition, or Ele.me might not have lost. Therefore, key factors do not exist independently, nor do they play a key role from the beginning.
  6. If community group buying falls into regional segmentation, it will increase the difficulty of breaking the deadlock. The final key factor may go beyond the current community group buying business scope and develop new factors. Combining points 1 and 2, the delivery that was later considered a key factor originated from key problems in the business. In the early expansion competition, this key factor only served to ensure business expansion was not hindered. It ultimately played a key role in the middle and late stages of competition, combining single key factors with other factors to complete a closed loop at a deeper logic level. What we now call riders as a key factor or core asset in Meituan's victory comes from this. Discussing key factors in isolation or statically is meaningless. Therefore, discovering key factors takes time. To combine key factors with business, and then combine other key factors to work together, only then can they become the final key factor. It is still a bit early to talk about key factors in 2021; 2022-2023 may be the time to confirm. Current key issues in community group buying may include: grid warehouses, processing warehouses, supply chain, capital, and traffic. But at what stage these factors play what role, in what form they appear, how long it takes to verify, what the more complete underlying logic closed loop is, and whether there are factors beyond the current community group buying business scope, I do not yet have a complete idea. I will present my preliminary guesses in the final part of this article, "Countermeasures for Community Group Buying from 2021 to 2023." 3. Strategic Offensive from 2024 Onwards The strategic counteroffensive here is not the kind of high-spirited, army-pressing, rapid advance to victory on the battlefield. The strategic counteroffensive here is a silent spring rain-like encroachment, simply put, refined operations and full-chain operations. Whether victory can be achieved depends largely on the layout and strategies of 2021-2023, such as regional segmentation strategies and mid-to-back-end layouts. These layouts may go beyond the community group buying business and require group ecosystem coordination. Because it is too far from us and there are many variables, I will not expand here. This article focuses on the situation from 2021 to 2023. 4. Long-term Regional Segmentation Long-term regional segmentation will rise in 2021, be the core feature of 2022-2023, and may continue until 2025. Long-term regional segmentation will not only have a profound impact on the community group buying business, but also on the main businesses of various competitors, such as Pinduoduo. 4.1 Internal Drivers of Long-term Regional Segmentation 4.1.1 Need to Implement Regional Segmentation Priority Strategy to Break the First Tier's Strategic Advantage If all parties adopt a national expansion priority strategy, the outcome is the table below: being fully suppressed, even more difficult than in 2020. What if the second and third tiers switch to regional segmentation priority? Although Alibaba/Shihuituan, Xingsheng, Chengxin, and Jingxi cannot compete with Meituan and Duoduo in the national market, they can concentrate on developing 3 key provinces, reaching 6 million orders per day in those 3 key provinces, and only a few million orders per day in other regions. If all four adopt this strategy, 12-15 provinces will be segmented, 10 provinces will be left for Meituan and Duoduo to segment, and 2-5 provinces will be harassed and divided by all parties (ignoring Taiwan, Hong Kong, Macau, Xinjiang, Tibet, Inner Mongolia, and Qinghai, 7 provinces). Then the situation becomes: the second and third tiers each occupy 3-4 key provinces, the first tier each segments 5 key provinces, and the remaining provinces have no obvious advantages or disadvantages for any party, becoming a war quagmire. In an instant, the advantages accumulated by the first tier in 2020 and the dangerous situation likely to form in 2021 are dissolved. Not only that, the national scale advantages of Meituan and Duoduo in the first tier will be severely limited, and the goal of 80 million orders per day will almost be impossible to achieve. Is this result easy to achieve? This result is very easy to achieve, easier than growing national scale 4 times and competing with the first tier nationwide. Reasons are as follows: Except for Xingsheng and Shihuituan, the main bodies of all parties are basically of the same size or undying opponents. Even if they cannot win the national competition, concentrating forces to fight a few provinces is no problem. When multiple platforms adopt this strategy, everyone will deliberately avoid each other's advantageous/key areas, and may even tacitly target the first tier. No matter how awesome Meituan and Duoduo are, they cannot withstand multiple opponents of the same size attacking in different regions. Therefore, a regional segmentation pattern will form in 2021. The actual situation may not be as uniform as described above; some platforms may segment more, some fewer, but ultimately a prototype of regional segmentation will form. 4.1.2 Community Group Buying Has Strong Regional Economies of Scale, a Powerful Means to Break Competition In fierce multi-party competition, once a party gains regional scale advantages, if not strongly prevented, business efficiency will improve, prices for users will have more space, further stimulating scale growth. Because the larger the scale, the larger the procurement volume from suppliers, the greater the supplier profits, and the more room suppliers have to cooperate with the platform to reduce prices and improve quality. The larger the scale, the more SKUs the platform offers, the higher customer selectivity, stickiness, and monetization efficiency, and the more high-profit products can be provided. Similarly, warehousing and distribution costs are diluted, achieving profitability. So the larger the scale, the better the experience, the better the economic benefits, which in turn feed back into the business, continuing to increase scale. On the other hand, platforms invest heavily in the region to escape competition, while other platforms reduce investment because the input-output ratio in that region is not cost-effective, further strengthening existing advantages. Therefore, once a scale threshold is crossed, qualitative change occurs, ultimately forming market segmentation and dominating the market. 4.1.3 Because of Segmentation, Long-term Segmentation Once segmentation forms, the characteristics of a protracted war will be greatly strengthened. Because you can seize several regions to form segmented markets, other competitors can too. With multiple parties having base areas, an early end to the battle is far off. This is like war: if the advantageous side does not seize strategic opportunities and allows the other side to establish strategic base areas, the war will turn into prolonged confrontation and attrition, such as the War of Resistance Against Japan. If the disadvantaged side does not seize strategic opportunities and its strategic base areas are destroyed, no matter how deep its foundations, it can only surrender, such as the Franco-German War in World War II. In summary, long-term regional segmentation will rise in 2021, be the core feature of 2022-2023, and may continue until 2025. 4.2 Unexpected Impacts of Regional Segmentation Regional segmentation will not only affect the community group buying business of all parties, but also their main businesses, with the most serious possibly being Pinduoduo. In 2020, Hunan's Xingsheng Youxuan seriously affected Pinduoduo's performance in Hunan. If from 2021 to 2023, 6 platforms develop 25-30 such samples, each several times larger than Hunan in 2020, how much pressure will Pinduoduo face? 5. What Kind of "Victory" Should We Pursue? The so-called victory is nothing more than seeking scale, speed, or quality. 5.1 Victory in Scale If seeking scale, it must be divided into total scale and regional scale. If seeking total scale, no platform's regional scale has reached the point where quantitative change causes qualitative change. This cannot withstand attrition in the confrontation and attrition stage. Even if a platform has relative advantages (not absolute advantages) in all regions in 2021/2022, it will not be better off, because during this period, the effective strength of all platforms has not been fully released and consumed. Any "bird" that dares to stand out in front of everyone without absolute advantage will be shot down. No matter how wise the platform's leader, how strong the capital, or how capable the organization, it is in danger. Because other competitors are at the same level and have sufficient effective strength. Before this effective strength is consumed, any relative advantage is powerless. Therefore, from a business and competition perspective, if regional volume has not reached absolute advantage, seeking only total volume is meaningless. If total scale is slightly lower but there are several regions with huge scale, for a considerable period, competitors' effective strength will not be heavily invested in these regions, but rather in regions where segmentation has not formed. This further promotes the emergence of regional segmentation. National scale will invite "group beatings" from competitors. Does national scale have any benefits? One biggest benefit is strategic initiative, as mentioned in "Market Expansion": if all parties still fight according to national scale, the first tier will gain huge competitive advantages. Even if all parties adopt regional segmentation priority, the first tier can also, while others are unable to attend, take into account market expansion and capture most of the sinking market. Unfortunately, if the second and third tiers adopt regional segmentation priority, the first tier's execution of national market expansion priority will not gain such huge strategic advantages. Some may say that national scale has a significant impact on supply chain and warehousing. I think this is said by people outside the industry. From the current situation, it will not have a significant impact in 2021-2022. From the supply side, the community group buying supply chain emphasizes timely and stable delivery capabilities. Whether standard products or fresh food suppliers, there is a lack of suppliers with nationwide delivery capabilities. There is a lack of suppliers of this scale, experience, and capability, and even more so, a lack of shared warehouse/processing warehouse infrastructure. Therefore, 99% of current suppliers are local, at most spanning 2-3 provinces, trying to localize. Such suppliers are still in their infancy, and I guess they cannot become mainstream. From the warehousing and distribution side, whether central warehouses, grid warehouses, or group leaders, national scale has no significant impact. This has been analyzed in "Regional Segmentation is Imperative." In summary, the greatest significance of national scale is strategic opportunity, but this strategic opportunity faces great challenges. Of course, if the second and third tiers respond poorly, the impact of this strategic opportunity is huge. 5.2 Victory in Speed Some platforms have a fanatical pursuit of speed. Their basic logic is that first movers have lower costs, and latecomers have higher costs. This logic does not apply to the current community group buying competition because there are too many participants and they are too rich. If there are only 1-2 competitors, and if we enter first every time and lead in cost structure, this is meaningful. But if there are as many as 5 competitors, these people entering one by one will always disrupt your "cost leadership." A worse result is that if you are fast but have not built enough advantage, then you have touched enough regions, encountering different competitors in different regions, and you will fall into the dilemma of being besieged by many. This will not be obvious in 2020 and 2021, but in 2022-2023, when the entire competitive environment enters the confrontation and attrition stage, this situation of being surrounded on all sides will be very obvious. The only way to break the deadlock here is to be fast enough, so fast that in most regions you not only enter first but also build absolute advantage, which is impossible. In "Regional Segmentation is Imperative," it is mentioned that regional segmentation has only two situations: either all parties adopt a regional segmentation priority strategy, each obtaining regional segmented markets, forming a nationwide regional segmentation pattern; or executing a national expansion priority strategy, naturally forming regional segmentation in a few regions due to scale development. That is, no one can achieve absolute advantage in most regions, at most relative advantage. Therefore, in 2021-2023, emphasizing speed is meaningful, but if one-sidedly emphasizing speed, it will definitely go into a dead end, because speed is not decisive. 5.3 Victory in Quality I call the development and improvement of each business link in community group buying quality, such as supply chain/products, central warehouses, shared warehouses/processing warehouses, grid warehouses, group leaders/users, operations, etc. The starting point and result of regional segmentation are actually focusing on quality. Because regional scale is supply chain scale, it is the capacity building of central warehouses, shared warehouses/processing warehouses, and grid warehouses. If they cannot be built, regional scale cannot be formed. For example, the current scale of certain hot fresh products is a few tens of thousands of orders per day. If going for regional segmentation, this scale may grow to about 100,000 orders per day. With the current ecosystem level, no one can do this, not only giants but also other partners. Only Xingsheng has this capability. In addition to the development quality of the supply chain, the development quality of central warehouses, grid warehouses, and logistics will also affect business expansion. This is also very easy to understand, just like e-commerce from 2010 to 2013, which exploded every Double 11. No matter how fast the business develops, it needs to match the development of each link. What quality can bear the corresponding scale? The larger the scale, the higher the quality required. Therefore, regional segmentation is not only about focusing on regional scale, but also on the quality of development of each business link within the region. 5.4 Summary The situation from 2021 to 2023 requires regional segmentation strategy priority. The regional segmentation strategy pursues regional scale, regional speed, and development quality, not national scale or national speed. 6. Business Development Level of Community Group Buying I have sporadically mentioned the development level of community group buying business in "Brief Review of Each Platform's Gains and Losses in 2020," "Regional Segmentation is Imperative," and "What Kind of Victory Should We Pursue?" To help everyone understand the community group buying business more deeply, understand the current situation and the countermeasures proposed later, I will summarize here, but not expand. If examining the development level of community group buying business from business links, it can be roughly divided into supply chain, warehousing and distribution, group leaders/users, platform, and operations. Supply chain can be subdivided into suppliers, products, processing warehouses/shared warehouses, and delivery. Warehousing and distribution can be subdivided into central warehouses, grid warehouses, group leaders, and delivery. 6.1 Development Level of Supply Chain From the supplier perspective, current suppliers are local first-tier or second-tier suppliers. Suppliers who can make money or scale may only account for 10% of the entire community group buying supplier group. From the product perspective, on the brand side, community group buying brand products are not significantly different from products in other circulation channels. In the future, a 4-fold increase in circulation scale will have a greater impact on brand products. Can brand owners keep up and provide different products? Or can other less mature brand owners keep up with the development speed and enter this market? On the quality side, to strengthen low prices, discounts, and cost-effectiveness, community group buying products must be inferior to other channels. Fresh food is inferior, and standard products may have changed ingredients. Of course, these are not particularly big problems for the target population and sinking market. After all, it is better than buying "Kangshuai Fu"-type goods in townships. From the processing warehouse/shared warehouse perspective, it is basically zero. Processing warehouses rely entirely on supplier self-building, with weak anti-fluctuation ability and weak scale shipment ability. Because the vast majority of first-tier fresh food suppliers do not have processing capabilities, and the better the first-tier, the less processing capability, thus blocking a large number of high-quality suppliers from entering. Shared warehouses rely entirely on third parties, but they can still meet business needs. From the delivery side, the vast majority of first-tier fresh food suppliers do not have delivery capabilities, nor do they have long-term cooperative delivery companies. First-tier standard product suppliers generally have their own delivery teams or long-term cooperative delivery companies. Therefore, delivery capability also hinders fresh food suppliers from entering the ecosystem. 6.2 Development Level of Warehousing and Distribution From the central warehouse perspective, a scale of 7 million orders per day is estimated to require a central warehouse complex of 100,000 square meters. Are platforms ready? Or is there reserve in the market? Is building central warehouses in different cities better than in the same city? I believe 2021 will give the answer. Grid warehouses generally lose money due to low group efficiency. After a 4-fold overall increase, they should generally improve. But then comes the delivery logistics problem, because after a 4-fold increase in scale, it will absorb 50% of the same-city logistics capacity during the same period. Can the same-city logistics market support this? Will costs rise due to tight capacity, causing grid warehouses to fall into losses again? The delivery timeliness of grid warehouses and central warehouses is generally completed at 14:00 or 16:00, still a big gap from the industry benchmark. Can it be maintained after a 4-fold increase in scale? The development level of supply chain and warehousing determines the development level of regional scale. 7. Government and Public Opinion Draw Bottom Lines for Competition and Development From the history of internet development from 2008 to 2020, when platforms rose to power, they waved the banner of eliminating harm for the people, and after succeeding, they rode on the people's heads and acted tyrannically. If the government and the public could not see these people's faces clearly before, the experiences of these years have been enough for the public to see them clearly. In fact, public opinion and government attitudes have already changed. The current regulatory risks and public opinion pressure are unprecedented in internet history, and utmost attention must be paid. The current community group buying competition involves multiple giants, large amounts of capital, and interest groups, with significant impact. If platforms still play the old tricks, only doing channels, not caring about industry, harvesting the market with capital, and challenging public opinion and regulation, the consequences will be very serious. -03- Countermeasures for Community Group Buying from 2021 to 2023 1. At the Geographic and Market Level—Regional Segmentation Strategy As mentioned earlier, the second and third tiers cannot make national expansion the priority or only strategy; they must prioritize regional segmentation. The reasons have been stated earlier. The first tier also needs to seriously consider regional segmentation, even making it a priority, for the following reasons: In national expansion, there must be key breakthroughs, consolidate phased achievements, to cope with the difficulties of the later confrontation and attrition stage, and repel competitors' attrition warfare with scale and efficiency. If competitors generally implement regional segmentation, the first tier will be forced to follow and strategically contract. In addition, the first tier needs to focus on sinking markets or new markets, using strategic initiative to seize markets and win strategic space for the long war. In these markets, follow a rapid attack strategy, do not entangle with competitors in attrition, otherwise, you will enter the confrontation and attrition stage prematurely and fail to achieve strategic goals. As the opposite of the regional segmentation strategy, some regions should be designated as blocking areas, with the core goal of blocking competitors from achieving regional segmentation. In short, everyone must adopt a regional segmentation strategy. Based on regional markets, fight a national war, rather than based on the whole country, fight a national war. 2. At the Cognitive Level—Recognize Facts and Strictly Implement Regional Segmentation Some people in the second and third tiers have inexplicable fear and subconscious awe of the first tier's advantages, always feeling that the other side is very strong. In fact, these are illusions, strong in appearance but weak inside. Specifically in each region, their scale is very small, and quality is also very low. This low quality is not only due to rapid development, but also due to the overall lack of the industry. This makes the first tier's situation even more difficult. So don't think competitors are that strong, or that you are not good enough. In fact, there are still great opportunities. As long as strategies and tactics are properly formulated and thoroughly executed, catching up or even defeating competitors is not a problem. The first tier, besides lacking regional scale and business quality, also faces encirclement by several competitors of the same level. Even if the first tier builds barriers, these competitors still have a lot of effective strength not yet released. If one competitor cannot defeat them, multiple competitors can always defeat them. Just like the situation in 1941 during the War of Resistance Against Japan: the Japanese side reached Shanxi in the north, threatening Shaan-Gan-Ning; in the south, the southeast coast was blockaded, the front line reached Changsha, and bombs were dropped on the wartime capital Chongqing. But the Japanese side, facing our vast territory and deep strength, adhering to regional resistance, and the upcoming entry of the United States, ultimately failed despite obvious strategic advantages. The current situation is far from 1941, and there is more than one "United States"-like player. Starting to fear or thinking there is no hope now is a big mistake. Because some people cannot recognize facts, cannot formulate appropriate strategies and tactics, propose inappropriate goals, causing subordinates to deform their actions, focusing only on form over substance, only on KPIs over strategic goals, wasting strategic opportunities and allowing the other side to solidify achievements. Turning formal failure into actual failure. As long as we are realistic, step by step, select 2-3 regions as base areas, and form 2-3 regional segmented markets within a year, the national situation will be completely different. Because once someone thinks and acts this way, Alibaba, JD.com, Xingsheng, or Chengxin will follow. And these four will inevitably choose different regions, avoiding large-scale mutual conflict. Although Alibaba, JD.com, Xingsheng, or Chengxin cannot defeat Meituan and Duoduo in the national market, concentrating forces to fight a few provinces is still no problem. Meituan and Duoduo face attacks from multiple opponents of the same size nationwide, and even gods cannot help. At that time, the national situation will become "Alibaba, JD.com, Xingsheng, or Chengxin each occupy different regions, gradually gaining regional advantages, while Meituan and Duoduo, unable to support the national situation, are forced to give up the national market and retreat to regional markets." Everyone returns to the same level. If some people cannot recognize facts and set lofty national market goals, they will enter Meituan and Duoduo's home field, be led by the nose, and always be one or even three steps behind. As analyzed above, 2021 is the key year for Meituan and Duoduo to achieve the national goal of 80 million orders and form comprehensive suppression of all parties. It is also the key year for all parties to implement regional segmentation priority to counter the first tier. If this year's strategic opportunity is wasted, Meituan and Duoduo may establish barriers nationwide in 2022. At that time, even if all parties ally and implement regional strategies, the effect will be far less than in 2021. While strictly implementing regional segmentation priority, do not forget sinking markets, open new markets, and block competitors in other regions. Regional segmentation is not the only thing. 3. At the Business Link Level—Emphasize Scale, Quality, and Different Strategies for Different Regions On the supply chain/product side, based on the business of three types of regions, form national leading advantages in certain products, convert capital capabilities into product/supply chain strategic capabilities, and export attack capabilities to other regions. Strengthen fresh food business and form characteristic products. On the processing warehouse side, based on key provinces, form leading processing warehouse capabilities and export to other regions. On the central warehouse side, layout 2 years in advance, make strategic investments, and prepare for capacity expansion. Currently, some platforms have serious problems in central warehouse construction. On the fulfillment side, sinking markets need business priority, but fulfillment capabilities must be accumulated. Key regions need both business and fulfillment, achieving industry first. Other regions need to ensure fulfillment and follow competitors. On the user and group leader side, in key regions and sinking markets, adhere to low prices/discounts/cost-effectiveness, use capital to open the way, use strategic products to open the way, and use multiple traffic channels. In other regions, adhere to cost-effectiveness, use small amounts of capital, refined operations, and leverage strategic product capabilities. At the resource level, large amounts of capital entering the market will cause severe shortages of related resources in the short term, and insufficient supply in the medium term. Resource supply guarantees need to be made. On one hand, achieve absolute first in certain regions, dominate resource demand in that region, and ensure resource supply; on the other hand, temporarily or long-term requisition resources from within the ecosystem as a guarantee. On the other hand, mobilize ecosystem stakeholders to enter, let them eat this dividend, and supplement their own resources. 4. At the Ecosystem Level—Don't Seek to Lift the Tripod Alone, but Use It for Me No giant can exert sufficient resources and pressure on the overall situation. Coupled with the mutual confrontation of six giants, resources that are already insufficient on a global scale will also rise and fall in confrontation and attrition. Therefore, how to maximize one's own resource supply to the overall situation while reducing direct confrontation and attrition with competitors is a problem that must be solved. Therefore, design a reasonable system to let people from all links participate, distribute business and interests, to maximize one's own pressure on the overall situation and reduce one's own attrition. In 2021-2023, these people will provide valuable resources and energy for us. 5. At the Competitor Relationship Level—Alliances and Counter-Alliances As analyzed above, community group buying will inevitably enter a stage of mutual confrontation and attrition. The best way to reduce attrition is through alliances and counter-alliances. No matter how strong a competitor's refined operations capability or fulfillment capability is, if 2-3 giants target him, attacking in different regions in turn, anyone cannot bear it. This cooperation can be carried out only at the provincial level. Both parties promise not to enter each other's core regions on a large scale, or jointly target others' core regions. There are two suitable alliance plans: Alibaba, Chengxin, and Xingsheng unite against Meituan, Duoduo, and Jingxi. Or Meituan, Chengxin, Xingsheng, and Jingxi unite against Alibaba and Duoduo. In both plans, the allies have no competitive relationship in their main businesses, and there is a dominant party, and the targets have competitive relationships in their main businesses, making alliance impossible. In addition to business alliances, using acquisitions to bring about "alliances" is also a form. And this form is inevitable, because the more difficult the situation, the more it exceeds the control of Xingsheng and Shihuituan, and being acquired is the will of most people. This was analyzed in "Confrontation and Attrition." If alliances form, the segmentation situation will come earlier and disappear earlier, and the war will end faster. If each acts independently, segmentation will exist for a long time, and attrition will be more intense. 6. Beyond Community Group Buying—Find the "Pearl Harbor Battle" of Community Group Buying If we can ignite contradictions among competitors in their main businesses, it will greatly reduce market competition and be very beneficial to our victory. The e-commerce battlefield among Alibaba, Pinduoduo, and JD.com is a powder keg. Meituan and Alibaba in local life is a powder keg. As long as these two powder kegs are ignited, the rest will be much easier. Alibaba can attack Meituan in local life, while agreeing with Chengxin and Xingsheng to attack Meituan's core regions in exchange, making Meituan fight on two fronts. This is good for Alibaba's local life business and community group buying business, and also good for Chengxin and Xingsheng. Maybe Duoduo and Jingxi will also take advantage of the chaos, since Meituan and Jingxi both have their headquarters in Guangdong, and Jingxi cannot rise without defeating Meituan. Meituan Youxuan is also Duoduo Maicai's number one opponent. Similarly, Meituan can also sow discord between Alibaba and Duoduo, since Duoduo's e-commerce business is booming and threatening Alibaba's home base. If this goal is truly achieved, Meituan will basically have no major worries in community group buying. Other parties will also feel much lighter. Alibaba simultaneously promoting regional segmentation in community group buying is a Davis double kill for Pinduoduo. Because regional segmentation in community group buying will seriously affect Pinduoduo's community group buying business and e-commerce business. If directly pressuring Pinduoduo's e-commerce, making Pinduoduo fight on two fronts, that is a triple kill. You may think these things are whimsical. I want to say that if you believe the community group buying business is intense enough, anything can happen. And I always believe that purely focusing on business competition in community group buying is unwise, no matter how strong your capabilities or capital. Just like the Sino-Japanese War, the Chinese people were unprecedentedly united and fearless, and the leadership's wisdom and judgment were unmatched globally, but Chairman Mao still emphasized that the united front at home and abroad was the foundation of victory. Without the Pearl Harbor battle between the US and Japan, we might not have won, or after winning, the country would have almost entered a primitive society, and such victory is no different from defeat. Of course, we cannot pin the hope of the "War of Resistance Against Japan" on the "Pearl Harbor Battle," but platforms should strive to push things in this direction. If the "Pearl Harbor Battle" really happens, the segmentation situation will end faster, and the war will subside faster. Otherwise, there will be long-term segmentation. 7. At the Government and Public Opinion Level—Respect the Interests of All Parties and Win-Win Cooperation I think we cannot be like 2020, nor like previous internet wars, causing a stir, with capital opening the way and ignoring the demands of individuals, distributors, and other interest groups. We must have a sense of the big picture, go to the production areas, use capital from an industry perspective to shape offensive weapons, such as certain strong categories or products, achieve win-win, and adhere to bottom-line thinking. 8. At the Leadership Level—Leaders at All Levels Determine the Direction of the War In "The Impact and Final Outcome of Giants Entering Community Group Buying," I proposed a protracted war and regional segmentation. In this article, I detailed the causes and consequences of regional segmentation, with arguments based on business factors, business competition situation, the impact of the business on each party, the fighting will of all parties, and the strength of the main body. But there is another point that is also decisive: the cognition and ability of leaders. Looking through history, an incompetent monarch, even with natural barriers, facing defeat and death, with high-spirited and capable subordinates, vast territory and developed productivity, still often suffers defeat or even rapid defeat. Chairman Mao mentioned in "Strategic Problems in the Anti-Japanese Guerrilla War" that in addition to the situation, characteristics, and laws themselves, leaders and commanders also affect the execution of strategies and final results. If it is clearly a protracted war, but following Chiang's approach, there would be no protracted war. If it is clearly guerrilla warfare and base areas with broad survival space and strategic influence, but following the ideas and practices of most people, there would be no guerrilla warfare. Therefore, the progress and results of regional segmentation will heavily depend on leaders at all levels of all parties. If competitors are thoughtful, then this war will inevitably move faster toward regional segmentation, and the result will be more difficult. If competitors are nominal and grandiose, they will use large-scale attacks to cover up regional wars. The larger their attack scope, the fiercer the attack, the farther from regionality, the closer they are to failure. Then the protracted war will not be so protracted, and regional segmentation will not be so segmented. Of course, because Alibaba, Pinduoduo, Meituan, JD.com, Xingsheng, and Didi participate, with too many participants and too much money, even if one or two big shots misjudge, there are still four or five players. Therefore, I always believe that there will be no final outcome within 5 years, and the result will still be long-term regional segmentation. -04- Summary 1. Before the Effective Strength of All Parties Is Eliminated, It Is Hard to Say Who Wins From 2021 to 2023, each party has sufficient effective strength to invest in battle. Only when the effective strength of each party is ruthlessly consumed by confrontation, thereby losing long-term competitiveness, can we see the turning point of the war. Therefore, the key in these three years is to invest effective strength in business, not in mutual confrontation and attrition, and to avoid large-scale confrontation and attrition as much as possible. We must not lose strategic opportunities, waste resources, or cause internal friction between superiors and subordinates due to inappropriate goals, such as fake orders and formalism. To ensure that effective strength is not consumed, we must make sufficient efforts in regions, business links, and competitor relationships. We must invest some effective strength in mid-to-back-end links, such as central warehouses, certain products with absolute advantages, and processing warehouses, to avoid empty attrition with competitors at the front end. As attrition increases and time extends, mid-to-back-end links will continue to exert force. Endless attrition will make competitors, capital, and public opinion question scale and competition, and internal and external factors will be more favorable to our development. 2. The Best Strategy from 2021 to 2023 is Regional Segmentation If latecomers such as Alibaba, JD.com, and Xingsheng strictly implement regional strategies, then Meituan and Duoduo's national advantages will be erased, and everyone will return to the same starting line, i.e., each party occupies different regional segmented markets, and Meituan and Duoduo exit the national market. If more than 2 solid base areas cannot be established in 2021, the future will be very, very difficult, and some platforms will be marginalized. 3. Emphasize Both Scale and Quality, with Different Strategies for Different Regions We must distinguish key regions, sinking markets, and other regions, and implement different strategies to achieve different strategic goals. Key regions must achieve absolute leadership, form segmented markets, and consolidate achievements. Use regional scale to attack competitors' national scale and resist competitors' money burning. Develop supply chain/products, warehousing, and processing capabilities in key regions to export capabilities to sinking markets and other regions. Sinking markets/new markets should use the opportunity when the second and third tiers are unable to attend, quickly launch a wave, and expand strategic space. Prepare for development into key regions, or to execute the key region segmentation strategy. If competitors do not implement regional segmentation, rapidly develop sinking markets/new markets with the highest priority and compete nationwide. If competitors implement regional segmentation priority, all parties will be forced to follow regional segmentation priority. Other regions should undertake the task of blocking and obstructing competitors from achieving regional segmentation, using small forces to achieve big results, and not confronting head-on. 4. Ensure Resource Supply Large amounts of capital entering the market will cause severe shortages of related resources in the short term and insufficient supply in the medium term. Resource supply guarantees need to be made. 5. Develop the Ecosystem Insist on developing the ecosystem, do not resist hard, let the ecosystem resist, and "sacrifice" others to achieve yourself. 6. There Will Definitely Be Local or Global Alliances and Wars Outside the Battlefield Reasonably use alliances and wars outside the battlefield to minimize our attrition and maximize the attrition of the other side. 7. The Attitudes and Interests of Regulators, Public Opinion, and Stakeholders Must Be Paid Attention To From 2021 to 2023, community group buying consumes too much capital and has too much impact. If it is as rough as 2020, black swan events will definitely occur. In business, shift from capital and dumping to both capital and supply chain/products. In industry, go up to production areas to support agriculture and rural areas, and go down to sinking markets to replace counterfeit and shoddy products and lengthy channels. Make plans for public relations, public opinion, and branding. Although this article covers everything, there is still a clear main line: long-term regional segmentation. All analyses and conclusions in this article are based on the long-term trend of community group buying and the 2021 situation. Therefore, as long as these two points are followed, formulating corresponding strategies is in line with objective laws. Source: Chen Weilong's Telescope (ID: yiguojiren) If a tip is adopted, 400-2000 yuan will be paid.