After two rounds of reshuffles in the industry, where is the ten-hui group on the verge of exiting the community group buying?

  1st shuffle

  Time: 2019

  Motivation: Due to insufficient capital flow and fragile supply chain, large-scale closures and mergers of community-based group buying companies

  Event: Neighbor One withdrew from Jiangsu and Zhejiang areas; you, me, you merged with Shihui Group, and Squirrel Pinpin went bankrupt...

  2nd shuffle

  When: 2020

  Motivation: The epidemic has hindered residents from going out for shopping. Models such as unified procurement and distribution in the community have become popular, and the industry has become a trend again.

  Event: Internet giants, such as Meituan, Pinduoduo, JD.com, Ali, Didi, etc. have entered the game one after another. The rise of "seckill" activities to make money at a loss has led to intensified supervision and the industry has once again entered a stage of reshuffle.

  3rd shuffle

  ...

  ■ In the ten years from 2008 to 2018, China's Internet local life service has successively launched three battles, "Thousand Regiments War", "Bicycle War" and "Takeaway War".

  From the process point of view, these three Internet wars have many similarities.

At the capital level, the war has experienced a process from "capital influx" to "capital winter" to "Internet capital competition"; at the player level, the war has experienced from "combination of heroes" to "market reshuffle" and then To the situation of "two-three oligarchs"; in terms of competition, wars have gone through the stage of burning money in the early stage of competition, to the stage of clearing out resource endowments such as products and supplies in the midfield, and then to the stable pattern of competition for offline operation capabilities stage.

  ■ Similarly, the "wheels of history" will leave ruts on the battlefield of the community group buying war.

  After the outbreak of the epidemic in 2020, Internet giants rushed to the community group buying track.

However, in just over a year, players began to “get into trouble”.

  In July 2021, Tongcheng Life, which had "8 rounds of financing in 3 years", officially declared bankruptcy; after that, Shixianghuiren went to Loukong, Orange Heart Choice was exposed and shut down, Jingxi Pinpin was abolished, and Meituan Choice was adjusted. ...

  ■ The Red Star Capital Bureau noticed that there have been a number of media reports recently that all businesses of the Shihui Group have been shut down in cities across the country, and the company has entered the aftermath stage.

Although the Shihui Group has not made an official response to this, the plight of the company may already be traced: as early as the end of 2021, there have been many media reports that the Shihui Group has "layoffs", "delinquent payment to suppliers", etc. related news.

  Why is the Ten Hui Group in trouble?

Where will the business model of community group buying go in the future?

  A

  From financing to giant entry

  Why does community group buying keep shuffling?

  Around 2015, with the popularity of mobile payment and the rise of fresh food e-commerce, community group buying has begun to take shape.

After the outbreak of the epidemic in 2020, community group buying has been catalyzed and amplified again with the help of capital, and the industry reshuffle has been following suit.

  In 2016, the community group buying industry ran out of platforms such as "you, me, you" and "prosperity selection".

In August 2018, Shihui Group received an angel round of investment of RMB 100 million, catching up with the first trend in the industry.

  According to public information, in 2018, capital began to focus on community group purchases. There were about 23 financing events on community group purchase platforms throughout the year, and the financing amount was as high as 4 billion yuan, which has become a trend.

  The entry of capital soon catalyzed the first reshuffle of the community group buying industry.

  In 2019, due to problems such as insufficient capital flow and fragile supply chain, community group buying companies closed down and merged on a large scale.

In June 2019, Linlinyi withdrew from Jiangsu and Zhejiang areas; in August of the same year, you, me, you and Shihui Group merged, and Squirrel Fighting fell into bankruptcy; in November 2019, Daluo announced that the capital chain was broken.

  Community group buying has entered the capital winter, the industry is moving closer to giants, and small and medium players are gradually out.

According to data from Tianyancha, in 2019, the scale of financing in the industry has shrunk rapidly. Only 8 companies disclosed financing status throughout the year, with a total financing of about 1.9 billion yuan.

  In 2020, the epidemic broke out.

During the epidemic, many residents were blocked from going out for shopping, and models such as unified procurement and distribution in the community began to spread.

The epidemic has catalyzed and shortened the duration of "consumer education", and many companies have sensed business opportunities and want to share a piece of the "cake".

Internet giants Meituan, Pinduoduo, JD.com, Ali, Didi, etc. have entered the game one after another, and community group buying has become a trend again.

  In June 2020, Didi's Orange Heart Select WeChat applet was officially launched; in July 2020, Meituan officially established the Meituan Select Business Department headed by Senior Vice President Chen Liang, and launched the "Thousand Cities Plan"; 2020 In early September, Duoduomaicai was officially launched, investing 1 billion in subsidies to snatch the resources of the head of the group.

  With the help of capital, fierce market competition follows.

"Seckill" activities such as "1 cent to buy an egg" and "1 yuan to buy a carton of milk" have become the daily routine of major community group buying platforms.

When the price of the products on the platform is lower than the cost price, the community group buying has become a business of "losing money and earning shouting".

  Since the beginning of 2021, the supervision of the community group buying industry has intensified, and this crazy "big sale" has cooled down, and the industry has once again entered a stage of reshuffle.

  The fierce battle under the "death struggle" of big factories

  Why did the Ten Hui Group go out?

  The community group buying track is reshuffled again, why is the Shihui group gradually kicked out?

  This problem can be roughly viewed from two perspectives: first, the cake of community group buying is important enough, competitors are willing to fight for a long time, and many of them have the natural advantage of doing community group buying; secondly, in addition to the lack of traffic advantages, In addition to low user awareness, it also has its own inherent shortcomings.

  Community group buying is a piece of cake that big Internet companies want to own.

On the one hand, fresh food e-commerce still has a lot of market space in my country's third-tier and lower cities, which is essentially the e-commerce industry's scramble for new incremental markets.

  On the other hand, although online sales of "cabbage and eggs" cannot make "big money", but there are a large number of buyers, the platform sees huge and high-frequency traffic. With traffic, it can provide more profitable products. Serve.

  Based on the above reasons, Internet companies have resorted to the most commonly used money-burning strategy, "deadly fight" community group buying: who can pay and who can "boil" their opponents.

  In the first quarter of 2021, Meituan’s new business loss reached 8.04 billion yuan, a year-on-year increase of 489.9%; Didi’s third quarter 2021 financial report shows that the net investment loss for the current period was 20.8 billion yuan; In the financial report, the grocery shopping business is listed separately, but according to Zheshang Securities estimates, in the third quarter of 2021, Duoduo Shopping will lose about 3 billion yuan.

  The heads of the group are all moving forward, and Shihui Group has conducted a total of 7 rounds of financing, with a cumulative financing of no more than 10 billion yuan, and no capital will enter after financing in March 2021.

It can be said that "lack of money" was the first straw that broke Shihui Group.

  Ten Hui Group belongs to the original entrepreneurial players, not the platform incubation players currently ranked in the first echelon.

Compared with the latter, the advantage that Shihui Group can take out is the support provided by Ali from the outside in terms of supply chain, venue, manpower, etc.

But these so-called advantageous platform players also have them. In addition, Ali does not take Shihui Group as its only strength.

  The shortcomings that the Ten Hui Group cannot make up for are: lack of money, lack of experience, and lack of resources.

In August 2021, Chen Ying, the co-founder and chairman of Shihui Group, sent an internal letter saying that some low-efficiency business areas would be reformed drastically, and then Shihui Group closed its business in more than 20 cities and launched a large-scale operation. layoffs.

  Under the fierce battle, the Shihui Group was not able to last long after all.

  reporter observation

  Community group buying reshuffle will continue

  Finally, the competition pattern of regional powerhouses will be presented

  After the second reshuffle, the current community group buying industry has entered a "midfield battle" in which the existing players compete for stock.

At this stage, each platform will compete for the construction of infrastructure such as supply chain and cold chain, that is, a new round of competition for SKU (minimum stock-keeping unit) selection and group efficiency improvement.

  Community group buying competition will continue to escalate, but there will not be a situation of "one family dominates".

  The reason is that although users have the same needs for grocery shopping, community group buying has obvious regional characteristics. Therefore, which platform users choose to buy vegetables often depends on what platforms are used by the people around them, and there is no national unity. ization model.

  In addition, it is difficult to establish "loyalty" in the consumer market, and price comparison has become a consumption habit for many users.

According to a survey by CICC, in June and July 2021, Duoduomaicai and Meituan chose to stop subsidizing in some regions. As a result, the order volume fell by nearly 20%, and the decline of other regional small platforms was as high as 60%.

  Therefore, in the future, community group buying will continue to reshuffle, from capital to product to operation, and will eventually present a pattern of regional oligarchic competition.

  Chengdu Business Daily-Red Star News reporter Yu Yao and Liu Mi

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