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Community group buying: what will happen when an Internet burning war starts from the sinking market

via:pingwest品玩     time:2020/12/13 17:48:45     readed:194

Community group buying is a special "war". Throughout the history of the development of the Internet, there has never been a "war". Like community group buying, companies that have become giants are the first to start from the sinking market; at the same time, the giants have put community group buying into a strategic position. Group purchase of cooking oil

Liu qiangdong, founder of Jingdong, said that he would personally lead Jingdong to fight a good community group buying battle. Jingdong made a strategic investment in community group buying with a strategy of $700 million. Didi's orange heart preferred group was in a fierce situation. The meituan optimization division was led by Chen Liang, one of the core founding team members. How can aribaba stand by and watch? First, it invested in round a financing of Ten Star Group in January 2019, and then in September this year RT mart and retail express also joined hands in the establishment of HEMA optimization division. In the internal letter of Huang Zheng, founder of pinduoduo, half of the letter was about buying more vegetables. Huang Zheng also flew to Nanchang and other places for first-line investigation.

Start up companies, such as prosperity and optimization, ten gathering groups, etc., are constantly financing; smart investment institutions also hold the chips early.

Its particularity determines that community group buying is not a single point breakthrough battle from the beginning, but a high-density and high-intensity war under the influence of flow, capital and talents.

Why is it favored by the giants

Zhuang Shuai, founder of Bailian consulting, believes that there are two prerequisites for the giant to take a fancy to community group buying. First of all, the giant has its own brand, capital, talent and brand effect. Secondly, the giant itself is cautious about the innovative business model, and the community group buying is a new business model worth investing in. The retail e-commerce industry has always had a standard: once a company can achieve 10 billion under a new business model, it shows that the business is a business The business model has the opportunity of scale. Several companies have achieved more than 10 billion in community group buying, which meets the standard of giant entry.

Zhuang Shuai believes that the reason why community group buying can sustain a large-scale economy lies in the three major problems that have plagued fresh e-commerce for many years: high customer acquisition cost, high performance service cost and low customer unit price.

The community group buying, which started from the sinking market, has found the possibility of optimizing the above three problems in its four core elements: community / physical store / team leader, sales tools (wechat group, small program), supply chain and warehousing and distribution.

The mode of getting customers by the head of the company reduces the cost and risk of acquiring customers. The sunken market has more stable neighborhoods than the first tier cities, and the most suitable head can be found here. If the head of the team goes to the community to paste a QR code or push it, the cost can be transferred to the controllable head. If the team leader does not sell the goods, then the platform side does not have to pay a commission, nor does it pay any customer acquisition cost.

As for reducing the service cost of the supply chain, "the next day" and "self delivery" are the key. There are many links in the storage and distribution of fresh products, and the loss is very large. At present, the average loss rate of fruits and vegetables in domestic retail industry is as high as 25%, and that of aquatic products and pork is 15% and 12% respectively. Community group buying doesn't need to be distributed to each user in a single batch like the daily excellent fresh and beautiful group buying dishes. It only needs to be sent to the head of the team. It is equivalent to that each team leader has become the transfer warehouse of the platform. The team leader undertakes or the user provides the small batch distribution, which reduces the consumption link. As for the platform, the orders of 20 consumers are concentrated in the head's hand, which can be seen as the rise of guest unit price. The cost is reduced, the unit price of customer increases, and the profit margin comes out.

Specific to each giant, the appeal is different. At present, pinduoduo defines "buy more vegetables" as the agricultural products business, aiming to activate the old users to buy vegetables more frequently. Therefore, it bypasses the "head of the team" link and directly raises it, making the community group buying into offline version of the group.

For Uber, it's about building the community curve. Originally, meituan put the second growth curve on the business of "meituan buying vegetables", but its strategic position was quickly replaced by meituan's optimization. The immediate delivery mode of meituan buying vegetables has a high cost, which can only serve urban users; while "meituan optimization" of community group buying can sink the market, and they can cook more and order less takeout, which can bring more "increment" to meituan.

From a further perspective, group buying radiates to the vast third and fourth tier cities and even rural areas. After taking the entrance of community group buying, tycoons can "take advantage of channels to make princes" and use high-frequency vegetables to buy low-frequency full-range retail. Clothing, cosmetics and household electricity can be put into it, and the imagination of the whole city's retail can be expanded.

But this time, traffic and subsidies are no longer everything

Community group buying is essentially a retail business, not an "Internet business". The difference between the Internet business and the retail business is that the traditional offline retail business has a synchronous growth in profit rate and expense rate with the growth of scale economy. In order to increase the scale of offline physical stores, they must continue to open stores. In the digital economy, the initial cost rate is greater than the gross profit rate, so the e-commerce platform suffers serious losses in the early stage. After a certain time node, the expense rate will drop rapidly As a result, the profit margin rose rapidly, and the gap between them expanded rapidly. Amazon, Alibaba and Jingdong have all verified this model.

In the face of community group buying, although the tycoons choose to start from the sinking market, they still adopt the "Internet business" method that they used to when competing for the market of first tier cities in the past: traffic dumping, subsidy binding, two pronged approach, which will circle users into their own fences.

This set of play method landing, the community group buying is experiencing the head and price of the volume.

The price of opening up a regiment goes up. According to 36 krypton, when they first entered Wuhan, the Commission of BD of the United States group was 120 yuan, which has now risen to 165 yuan. The cost of a head of the BD team of HEMA in Wuhan is 150 yuan, and that of orange heart is 130 yuan. In July, the head of the BDS of the ten clubs only costs about 80 yuan.

Under the zero sum game, subsidies do not bring business and profit growth. 36 krypton reported that more than 10000 new leaders of the Ten Star Group opened in September, but the daily single volume of the Ten Star Group in Wuhan in October still maintained at 700000. Before that, the gross profit of Ten Star Group in Wuhan had been stabilized at about 19%. After several giants entered in October, they immediately dropped 4 or 5 points.

"If the giant still used the way of crazy subsidies in the past, it would be full of complaints and grief." The management of a community group buying enterprise, who did not want to be named, told pinplay. He believes that community group buying can eliminate a lot of unnecessary costs and let people buy really high-quality and low-cost things, which is also a great transformation of the supply chain.

Before the giants came, the influence of community group buying start-up companies was limited, relying on the head of the team to carry goods, a local vegetable vendors will not drop the flow. After the giant entered the community group purchase, the users who had no online habits before switched to the community group purchase because of promotion and promotion, and the flow of vendors dropped sharply. Once the giant stops subsidizing and the community group buying users are back offline, the vendors may not be able to survive.

But for the sinking market, buying vegetables is not only a business, but also a matter of the old order in the most subtle parts of society. Those who have been passive to the cake have launched a counterattack, and some market regulators have begun to be vigilant.

According to the daily economic news report, Cangzhou Huahai Shunda grain and oil seasoning Co., Ltd. announced that the community group purchase platforms represented by "buy more vegetables" and "meituan optimization" have suffered serious low price phenomenon, and even some products are far lower than the ex factory price, requiring dealers to prohibit the supply of products to the community group purchase platform. In addition to Huahai Shunda, other suppliers including Luohe Weilong Trading Co., Ltd. have successively issued similar notice of stopping supply.

Nanjing municipal market supervision bureau also issued the notice on compliance operation of e-commerce "dish community group purchase", which includes "platform operators shall not implement low-cost dumping at a price lower than the cost, thus disrupting the market order."

Zhuang Shuai believes that in the future, the pattern of community group buying will be: e-commerce giants will support several community group buying rivals; regional entity chain giants will raise "local snake"; property giants will support or strategic investment, and have the exclusive resources in the community.

In the fierce battle of burning money, the giants are easy to swallow up the start-up companies, but the particularity of the sinking market makes it difficult for them to copy the winner take all outcome in the past.

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