Community group buying in the past two years can be described as a barbaric expansion under the catalysis of the epidemic, but since the end of last year, the state of disorderly competition in the community group buying track has been paid attention to by the regulator, and the industry has been able to bid farewell to the barbaric era and enter a benign stage of development.
Since 2021, the regulatory high-pressure situation of the community group buying industry has not decreased, and many platforms have been subject to high penalties for low-price dumping and other behaviors. In the increasingly strict regulatory environment, the model of community group buying and burning money for the market has come to an end, and former head players such as Shihui Tuan even have to shrink the battle line to stop losses.
Industry insiders believe that Ali, Meituan, Didi, Pinduoduo and other Internet giants invariably regard community group buying as a strategically inclined project, relying on strong capital to attack the city and occupy a significant advantage in the price war. As the high pressure of industry supervision continues and the industry accelerates the reshuffle, the community group buying industry may enter the era of giants.
During the year, many platforms were subject to high penalties, and the high-pressure situation of supervision remained unabated
Community group buying is undoubtedly one of the tracks with the most attention from capital in 2020. At that time, Internet giants such as Ali, Meituan, Didi, and Pinduoduo were no longer satisfied with testing the waters in the field of community group buying through investment, but chose to personally fight with old players, setting off a round of community group buying war.
However, since the second half of the year, the platforms have broken the bidding rules of fresh e-commerce in the past, and the low-price competition model opened has gradually evolved into vicious competition; the controversy about community group buying disrupting market order has begun to stand out at the end of the year, which has aroused the attention of regulators.
Following the promulgation of the "Nine No's" new regulations by the State Administration for Market Regulation and the Ministry of Commerce in December 2020 for community group buying, since 2021, the high-pressure regulatory situation has remained unabated, and many mainstream community group buying platforms have been subjected to high fines.
In March 2021, due to suspected improper price behavior, the operators of five community group buying platforms, including Orange Heart Preferred, Duoduo Buy, Meituan Preferred, Shihui Tuantuan and Food Sharing Club, were notified and punished by the State Administration for Market Regulation (hereinafter referred to as the "Municipal Supervision Bureau"). Among them, the first four enterprises were fined 1.5 million yuan, and Wuhan Seven Delicious Technology Co., Ltd. (Food Enjoyment Club) was fined 500,000 yuan. Subsequently, the above five platform enterprises responded that they would strengthen rectification and submitted a rectification report to the Municipal Supervision Bureau.
However, only two months later, the Shihuituan was reported to have not fully implemented the rectification commitment, and there were still a large number of low-price dumping and price fraud in jiangsu, and the administrative guidance committee continued after the expiration of the 1-month rectification period.
After in-depth investigation and evidence collection, the Municipal Supervision Bureau confirmed the illegal behavior of the Shihui Group, imposed a fine of 1.5 million yuan again in accordance with the law, and ordered the parties concerned to suspend the business of the "ShihuiTuan" platform in Jiangsu for 3 days. So far, the Shihui Regiment has suffered heavy penalties twice in succession, accumulating a total of 3 million yuan in fines and forfeitures, laying the groundwork for its subsequent contraction of the front to stop losses.
By mid-November, the Municipal Supervision Bureau had published its reply to the bureau's proposal to "prevent large Internet companies from using online group buying to form a market monopoly to enter the grass-roots areas of cities and counties, seriously affecting the interests of the masses", pointing directly to the problems and potential risks of community group buying.
The Municipal Supervision Bureau said that there are huge subsidies on the community group buying platform, and the sale of goods below the cost price, and the Internet platform enterprises use the advantages of funds, data, traffic and other advantages to enter the community group purchase, and seize the market in the form of subsidies and low prices, which is easy to have a huge impact on the offline community economy such as farmers' markets and community convenience stores.
In the reply, the Municipal Supervision Bureau characterized the low-price dumping of community group buying as "squeezing the employment space of small stall owners, small traders and other groups" and "affecting social stability". For the industry, this is nothing less than a hammer.
For the regulatory status of community group buying, CICC pointed out in the research report that the supervision of healthy competition in the market may show a normalized trend, which will have a long-term impact on Internet platforms that cultivate user consumption habits and rely on subsidies to drain. On the other hand, new entrants have also lost the means to vigorously subsidize the acquisition of the market, and the slowdown in industry competition will make the focus of the platform shift from the expansion of market scale to the optimization of various links.
Food sharing will be the same as the failure of life, the ten groups shrink the front, burn money for the market model to the end
In the environment of unabated regulatory pressure, this year's community group buying track presents a completely different scene from 2020: the invested capital has gradually shrunk, the platform subsidies have also shrunk significantly, and the market competition has gradually returned to rationality and standardization. After the tide of capital receded, the "naked swimmer" began to appear.
As early as April this year, the veteran entrepreneurial community group buying platform That Has received tenen investment will be exposed to the incorporation of business in Jiangsu into the Ten Hui Group, and will consider withdrawing from Jiangxi, Zhejiang, Jilin and other regions. At that time, Dai Shanhui, the founder of the Food Sharing Association, came forward to respond that only a few loss-making cities had closed their stations, and all other cities were operating normally.
Three months later, it was revealed that the community group purchase business was withdrawn, and the business was transformed into a community snack store. At the same time, the company's headquarters has been empty, and many executives have quietly left. During the period, some people who claimed to be food sharing suppliers posted on social platforms to seek recovery of funds, saying that the food sharing suppliers had not yet settled the payment and there was a situation of arrears of employee wages.
In this regard, the official of the Food Sharing Association did not respond. According to the Tianyancha APP, on July 27, 2021, Food Sharing will receive tens of millions of dollars of strategic financing and transform into a pure offline community snack convenience store - Love Snacks.
Coincidentally, Tongcheng Life, an early participant in community group buying, also officially withdrew from the community group buying track in July this year. Blue Whale TMT reporter learned that on June 29 this year, some employees in Suzhou had already received a notice of suspension of work and production; almost at the same time, some suppliers gathered downstairs in tongcheng life Suzhou headquarters to ask for payment.
On July 6, He Pengyu, CEO of Tongcheng Life, released an open letter saying that it would carry out strategic transformation adjustments, launch a new brand name "Honey Orange Life", and shift from C-end business to small B-end. Unexpectedly, the company issued a bankruptcy announcement the next day. Tongcheng Life declared bankruptcy due to poor management just one day after the name change, and the plot reversal was staggeringly fast, known as the "first case of community group purchase bankruptcy".
In addition, the former head player Shihui Tuantuan, which had been invested by Ali, also began to be rumored to lay off employees in August, and closed the business of many cities in the southwest and north China, focusing only on a few advantageous areas such as Two Lakes and Jiangxi.
A former employee of the Shihui Group revealed to the Blue Whale TMT reporter that due to limited financing and continuous high fines, the Shihui Group has been unable to continue to burn money madly, and the company's personnel, business coverage cities, and business categories have almost all been reduced.
Mo Daiqing, director of the online retail department and senior analyst of the e-commerce research center of the network economic society, believes that the current dilemma of the Ten Hui Group is related to its burning money for scale and loss for traffic, the product has no core competitiveness in addition to the low-price advantage, and the platform lacks "hematopoietic" ability, although it has realized that it has begun to shrink its business, but in the face of giant squeeze, it is lagging behind.
As one of the first batch of community group buying players in China, Tongcheng Life and Food Enjoyment Club were favored by capital and ranked in the top three in the track, and finally "lost their armor" on the battlefield of community group buying, causing an uproar. And the Ten Hui Tuan is the former head player, and finally fell into the situation of shrinking the front line to stop losses, which can't help but be lamented.
The situation of the Food Sharing Club, Tongcheng Life and the Ten Hui Group is just a microcosm of the development of community group buying, reflecting that the model of community group buying burning money for the market has reached the end.
The industry has cooled down again to accelerate the reshuffle, or will enter the era of giants
Judging from the development process of community group buying in recent years, it has experienced two "outlet periods" in 2018 and 2020, and they have also begun to cool down shortly after the vent period, ushering in a round of reshuffles.
According to the "Community Group Buying Insight Report" released by QuestMobile, in the second half of 2018, the community group purchase was secretly blowout, and there were about 23 financing incidents in the whole track, with a single financing amount of tens of millions to hundreds of millions of yuan, and the cumulative financing amount reached 4 billion yuan, involving more than ten players such as you and me, food sharing club, squirrel fight, ten hui group, and community music.
Since then, industry competition has gradually become fierce with the entry of giants, and the huge amount of capital pouring in in in the short term has promoted the rapid growth of the market at the same time, but also invisibly accelerated the reshuffle of this subdivision track.
After entering 2019, with the gradual contraction of capital, the field of community group buying has also begun to cool down sharply, and has experienced a round of "great purge"; players such as Wonderful Life, Ji and Fresh, Dull Radish, Squirrel Fight and other players have fallen into financial difficulties or even closed down, so that the once lively community group buying has begun to fall into silence.
In 2020, the sudden outbreak of the new crown epidemic has revitalized the community group buying based on the "group leader + self-pick-up" model, and this track has once again stood on the cusp. For a time, various institutional capital competed to lay out in it, setting off a wave of financing heat; Internet giants such as Ali, Meituan, Didi, and Pinduoduo entered the market with a large number of resources, unanimously placing the community group buying business in a strategic position and boosting the community group buying into the fast lane of development.
However, with the large number of major Internet platform enterprises entering the community group buying market, problems such as imperfect rules, unreasonable order, and illegal operation have become increasingly apparent, which has aroused the great attention of the official media and regulators, and the community group buying track has cooled down again from the end of 2020.
On the one hand, under the influence of stricter supervision, activities such as low-priced seconds of community group buying have been suppressed, which in turn has affected the efficiency of the platform's new and revitalization; on the other hand, capital contraction and financing restrictions have also made some community group buying platforms stand on the brink of life and death.
Many industry insiders pointed out that Internet giants such as Ali and Meituan have tilted a large number of resources into the field of community group buying, and they have a clear advantage in the price war with strong capital. With the continuous high pressure of industry supervision, entrepreneurial small and medium-sized platforms may not be able to confront giants for a long time, and the future community group buying industry will most likely enter the era of giants.
Analysts at Tianfeng Securities also made a prediction on the future competitive landscape of community group buying in a research report. First of all, after the national community group buying platform completes the adjustment of headquarters collection + self-operated processing, the efficiency of the supply chain system will be higher than that of the local community group buying platform relying on local suppliers, which Tianfeng Securities analysts believe may increase the competitive advantage of the head platform.
Secondly, the community group purchase model will change from light to heavy, and the impact of large-scale organizational capabilities and processing production capacity on operational efficiency will increase.
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