Text |Tech Planet Lin Jing Wang Lin
Before the epidemic prevention and control was released, the maximum number of group purchases in the community could reach 600 a day, which could not be put in a 10-square-meter dry cleaner in Liu Miao, and the sorted goods piled up all the way to the door. Now, on the list of heads she shows to Tech Planet, there are an average of 100 to more than 200 orders per day, which has dropped sharply.
As a key bridge between the community group buying platform and users, the situation of the head of the group reflects the current situation of the community group buying track to some extent.
After the group-buying war in the community, nowadays, it is called "the new third group" and "the third group", and the life of the tenth group and the same journey has collapsed, leaving only the prosperity and optimization. Profitability has become the primary task of the platform. With the recovery of offline merchants, community group buying is also facing new challenges.
However, JD.COM has recently "killed" the group purchase in the community again, renaming Jingxi Pinpin as JD.COM Pinpin, and choosing Hefei as the first stop to expand the city. A local head of Hefei said, "JD.COM BD (Business Development) personally came to the door to talk about the cooperation of heads. They will select heads who have done well on other platforms and directly invite them to become the head of JD.COM."
Although Jingxi Pinpin had not been laid out in Hefei before, in the head’s view, the renamed "JD.COM Pinpin" was endorsed by the word JD.COM, with obvious brand power and rich incentives for innovation, and it broke the order on the first day. According to her observation, JD.COM’s capacity and other aspects have not kept up, and some commodities are out of stock.
When the whole track has died down, will the community group buying rekindle the war with JD.COM?
After the 01 fierce battle subsided, the only pioneer
Withdrawal from the city and contraction are the key words of community group buying track in the past year. The US delegation is preferably evacuated from Beijing and four northwestern provinces (Gansu, Qinghai, Xinjiang and Ningxia), and currently covers more than 20 key provinces. Xingsheng prefers to retreat from the 17 provinces with the highest peak. At present, its business is only in six provinces: Shaanxi, Hubei, Hunan, Guangxi, Jiangxi and Guangdong. Buying more vegetables has the widest coverage at present, covering 31 provinces and cities except Tibet.
Nowadays, apart from group buying in the community, Xingsheng Youxuan APP has also added the business of "Yuanben Mall", which is an e-commerce platform similar to Taobao, involving clothing, shoes and bags, department stores, food, electrical appliances, jewelry and other categories, mainly taking the cost-effective route. For example, a T-shirt for women ranges from 9 yuan to 40 yuan.
Figure: Screenshot of Xingsheng Preferred APP
According to an employee who resigned from Xingsheng, "Yuanben Mall" is Xingsheng’s preferred cooperation with external companies. In her view, categories that were not available before, such as clothing, can increase revenue for the company. A head of Xingsheng Preferred Group said that its staff had introduced new business because the single quantity was eroded by some competitors.
In today’s "new three groups", the US group preferred and bought more food as the two major heads, and competed for the "top spot" in the past year. According to the research data of Guojin Securities, as of the first half of 2022, the market share of community group buying preferred by Meituan reached 38%, second only to 45% of buying more food.
From the perspective of organizational structure, the "No.1 position" of community group buying has also changed. According to "Late", at the beginning of last year, Guo Wanhuai, vice president of Meituan, took over the fast donkey, food shopping and optimization business from Chen Liang, former senior vice president of Meituan and member of S-team, the highest decision-making body. She made a series of arrangements for Meituan’s optimization and transferred the more effective fast donkey management team to the optimization. At the same time, Meituan preferred to abolish the large-scale system and adjust the five major regions (North China, South China, East China, Central China and West China) to 17 regions, which have more decision-making power and are responsible for their own profits and losses.
According to Shenwang, since September last year, Temu, a cross-border e-commerce business, has been one of the most important strategic projects in Pinduoduo, led by Gu Yaoxian, the main person in charge of buying more vegetables.
With the full liberalization of the epidemic, retaining existing customers has become a top priority for community group buying platforms. In some areas, many people who buy more vegetables and choose the best leaders of the US delegation told Tech Planet that after the epidemic was released, the platform adjusted the latest rules in time. Originally, the commission was mainly calculated according to the order quantity. Now, users must enter through the link shared by the leader. As long as the order amount exceeds 1 yuan, the leader can get a commission of 1 to 2 yuan through this user.
When the whole track stopped, unlike the subsidy war and the influx of capital in the past, JD.COM restarted the community group buying business, which was inseparable from the sinking strategy of the whole group.
In 618 this year, Xu Ran, the new CEO of JD.COM Group, who made her first public appearance, revealed the next strategic task of the Group. Among them, sinking the market has become one of JD.COM’s three major strategies and was first mentioned. Xin Lijun, CEO of JD.COM Retail, once put forward one of the four must-win battles of JD.COM Retail 2023 in JD.COM, which is also sinking the market.
To create a low-cost mind, community group buying is undoubtedly one of the important starting points. In the past, the community group buying business in JD.COM made a rough progress. Jingxi, once led by Liu Qiangdong personally, went through the personnel adjustment and withdrew from the city, leaving only two markets, Langfang and Beijing.
In terms of organizational structure, JD.COM now belongs to the newly established Innovation Retail Department of JD.COM Group, which is headed by Yan Xiaobing, a veteran who returned to JD.COM, and reports to Xu Ran, CEO of JD.COM Group.
Compared with the radical expansion of the city, JD.COM’s spell is now a small step. A head of Hefei revealed to Tech Planet that JD.COM began to recruit heads in mid-July. Judging from the current Hefei new site, JD.COM’s spelling is still carried out through the head mode, and there are still too many innovations in the business model.
For JD.COM, high-quality logistics experience and rich 3C categories have made it accumulate huge high-net-worth users’ minds, but they have also become shortcomings in exploring the sinking market. Moreover, in the "short-chain logistics" of community group buying, JD.COM can’t directly use the advantages of the previous warehouse network distribution system.
In the eyes of a consumer investor, community group buying competes for supply chain and efficiency, and wins by scale. After the reshuffle of the industry, the pattern has been initially determined. JD.COM will enter the game at this time and must find a new breakthrough to have a certain chance of winning.
Zhuang Shuai, an e-commerce retail analyst, believes that JD.COM’s brand image, supply chain advantages and self-operated logistics are all great advantages, but JD.COM has not accumulated particularly good methods and teams in social organization management (the head of the group is a freelancer, not a direct employee) and head expansion, and the organizational structure and process cannot well support the business model of community group buying, so it needs to be adjusted and optimized accordingly.
The bitter business of "bending down to pick up steel shovel" ushered in a new rival of "group shop"?
Community group buying, which carries the ambitions of Internet giants, is actually a bitter business. Yang Yi, an investor who entered the community group purchase in the early days, once calculated an account. The gross profit of the goods selected by Prosperity is around 20 points, and the profit rate of each order is only two or three points after deducting the commission and performance fees of the store. The customer’s unit price is ten yuan, and each order can only earn a few cents.
"Purchasing-warehousing-distribution-outlet-head -C (consumer), which involves too many links, the supply chain process is too long, and if the business process is not completely run through, the loss rate of fresh food is too high", an original orange heart optimization middle-level once analyzed to Tech Planet. This means that the homework that Internet manufacturers need to do most may be how to operate finely, and the price difference of a catty of vegetables should be considered by a few cents.
This seems to be not good for the big Internet companies. They still use the money-burning subsidies that they have always been good at for the market, shouting that there is no upper limit for investment and All In slogans, and it is easy to fall into the quagmire of losses.
Judging from the financial report data, from 2021 to 2022, the operating losses of the new business represented by Meituan Youxuan were 35.9 billion yuan and 28.4 billion yuan respectively. Previously, the financial report data released by JD.COM Group showed that in 2021, when Jingxi made every effort to expand the market, the accumulated loss of new business in JD.COM reached 10.6 billion yuan.
In the past year, players from all walks of life have relied on their own resource advantages to explore. Buy more vegetables relying on the advantages of the original supply chain of agricultural products, and build a low-price model with the help of the supply chain advantages of direct source mining; Meituan’s optimization is to change its positioning to "Tomorrow’s Day" supermarket. One advantage is that from fresh labels to supermarkets, it can cover more categories and SKUs and enhance gross profit; Amoy Caicai merged with Amoy Xianda (an instant retail business with one-hour delivery) and changed its name to Taobao to buy vegetables. This can effectively avoid traffic dispersion and reduce product distribution costs and commodity procurement costs.
According to "Late" news, as of June this year, except Sichuan, Chongqing, Guangdong, Xiangbei and Hangzhou, at present, the gross profit of buying more vegetables has turned positive in other regions of the country, but the US Mission has not yet achieved gross profit.
In addition, when the big Internet companies are caught in a profit quagmire, the group store model has become a new trend in 2023, mainly based on local group buying platforms. At present, Shijiazhuang’s "Jamlom Home" has opened more than 600 group stores all over the country, and the number of stores in Miaomeilian and Meilin Taotao has exceeded hundreds. In March of this year, Zhihua Zhiguo started the group store business and plans to open 1000 stores nationwide.
Different from the traditional community group purchase, in the group store mode, the head of the group is equivalent to the franchisee of the platform, no longer relying on commissions, but relying on the difference between the purchase and sale of goods to make money. This makes the community group buying platform itself reduce the financial pressure.
An investment promoter who "arrived home from Jamlom" introduced to Tech Planet that it was mainly aimed at middle-aged and elderly people, and Jamlom’s secret book of arriving home was "violent innovation" in the early stage. The new team leader needs to pay a promotion fee of 10,000 yuan. On the opening day, the headquarters will send employees to quickly set up a private domain group by distributing leaflets, and continue to pull new products through "a few kilograms of potatoes for one dollar".
The operation and maintenance of the WeChat group is the key. The head of the group also needs to "warm up" irregularly, take out part of the turnover regularly, and carry out new discount activities to ensure the stickiness of users. In addition, Jamlom’s home business has also been expanded to local life services such as eating, drinking and having fun, and the original private domain traffic has been directed to package tours and home service with higher unit price, thus achieving "everything can be organized".
According to Lingwu Media, Xingsheng Youxuan has set up a group store business unit, which is one of its key strategies in the next three years, and plans to open 100,000 group stores by the end of 2024.
03 tens of billions of investment, far from the end.
There has never been a shortage of challengers in the trillion-scale fresh retail. They used to be full of pride, but the fate of the challengers was not smooth. There were only 55 employees, and the daily fresh food that was once on the verge of delisting, Yiguo Fresh, and the ten clubs invested by Ali were all lost in the fresh track.
Even so, it can’t stop the enthusiasm of Internet companies, especially after "picking the drooping fruits". The year of 2020, when both Meituan and Pinduoduo attacked on a large scale, was the brightest year for community group buying. In this year, Meituan invested tens of billions in community group buying.
The optimization business has brought high user growth to Meituan. As of December 31, 2021, the number of trading users of Meituan was 690 million, an increase of 35.2% compared with 510 million in the same period of last year. However, on the other hand, it has also brought huge losses. The new business where Meituan is optimized is one of the business sectors with the largest losses.
Meituan hopes to infiltrate users in the fourth and fifth tier cities by optimizing them, with a view to transforming them into users of take-away and wine tours. However, the consistency between community group purchase and take-out/wine tour is poor, with the unit price of the former being around 30 yuan, while the unit price of take-out is around 50 yuan.
However, the US Mission did not give up. Compared with elephant fresh food, food encyclopedia, etc., optimization has been the most successful exploration of the US Mission in the field of fresh food. In June this year, after nearly two years of "reducing costs and increasing efficiency", Meituan preferred to restart its growth strategy.
A person in charge of a community group buying cloud warehouse told Tech Planet that the number of dealers who buy more food is decreasing now. In his warehouse, the GMV preferred by Meituan has surpassed that of buying more food, but the gross profit of buying more food is higher.
A partial victory does not mean the end. In his area, buying more food was profitable as early as a year ago. Not only that, according to "Late" report, a number of secondary market analysts predict that in 2022, buying more vegetables will realize the gross profit (commodity price minus purchase price, local operating costs, etc.) of half of the provinces and regions in China.
Now, Pinduoduo has devoted his energy to Temu, and many shopkeepers have become Temu’s investment promotion personnel, who send out investment promotion advertisements in the circle of friends every day.
Compared with Meituan’s optimization, Pinduoduo didn’t even make a separate APP for buying more food, because the original main APP crowd was enough to meet the user portrait of community group purchase, which meant higher efficiency of new shopping. In addition, the original accumulation in the agricultural products industry has made Pinduoduo more familiar with the supply chain.
HAYDEN CAPITAL estimates that buying more vegetables will achieve overall profit from 2023. According to conservative estimates, by 2025, this business will contribute at least about 14 billion yuan of earnings before interest and tax to Pinduoduo. This will become another big profit source for Pinduoduo, providing sufficient food and grass for its cross-border business exploration.
In addition to the "New Three Groups" of Internet giants, Xingsheng Youxuan is the only startup company that has successfully resisted the "Li Bao" of Internet giants. Community group buying is its core business and is related to the company’s lifeline.
No enterprise, whether it is a big Internet company or a survivor of the "Old Three Group", is willing to give up. Community group buying bears the ambitions of Internet companies for fresh retail and the lifeblood of startups. Even if everyone knows that it is extremely difficult to make money in the field of fresh food.
(Liu Miao is a pseudonym in the text)
