During height A unique type of online shopping has become one of the hottest trends in the Chinese technology industry. Called “Buying a community group“It allowed consumers to save money on everything, from apples to iPhone through placing mass orders with friends and family. The model that was like Groupon will meet with Instacart, turned out to be particularly popular in the food article. But now Chinese platforms of buying a group of communities are disappearing one by one.
At the end of last month, Meituan, a Chinese giant of food supply, announced that he suddenly closes the purchasing operations of grocery groups in all except four provinces, surprising many customers and even suppliers.
In March, the arm of the Alibaba food groups, Tacacaicai, was also closed. Xingsheng Youxuan, a company that has started the nationwide industry, is now operating only in three provinces, down from 18. Today Pinduoduoduo, a Chinese sister company to this, is the only main internet platform that still offers buying food groups throughout the country.
The sale of foodstuffs is not a business with high margins, and the cost of shipping something as miniature as several potatoes may never have a financial sense for a technology company. The promise of buying groups was, however, that combining orders by a dozen and delivering them all to one place could be profitable enough.
The industry began to form at the end of 2010, but it really grew when the pandemic hit Covid-19. When Chinese cities for three years interrupted interrupted blockades, going to a grocery store was often impossible, and technology companies used the opportunity to digitize and monopolize more daily activities. While households in the largest and most developed cities could afford to deliver groceries directly to their homes, people in less developed regions found an alternative in purchasing groceries in groups.
At the beginning of the 1920s, buying community groups was seen as an creative solution to the challenges regarding the delivery of the last million related to food delivery. But as Pandemia and Chinese companies, including Meituan, still expand their dense courier networks, began to offer delivery in just 30 minutes, eliminating the need to meet with neighbors to buy a group.
“Now immediate retail sales are also coming to cities with a lower level so that people can also get food for the same price as buying community groups, but within an hour, instead of waiting for the day and necessarily relate it from the leader of the community group,” says Ed Sander, technology analyst at Tech Buzz China, who has been following the group industry for several years. “We arrived while it is almost an old model.”
On the day when Meituan closed the majority of his services buyers, he also published a statement with information that he would expand his activities in immediate delivery. Meituan did not answer the request for comment from Wired.
Side concerts
One of the most compelling aspects of the business model of the group’s purchase is that it is based on thousands of contract communities leaders. Called Tuanzhang– and a entertaining return in a Chinese term for the military title “Regiment Commander” – these people often have deep connections with local communities and are recruited by platforms to promote their services and collect collective food orders.
In exchange for commissions of sales, community leaders solve food orders, and then either provide them directly to their neighbors, or wait at home for people to pick them up. Most community leaders are either owners of miniature retail stores or mothers remaining at home and pensioners who have a lot of time for a side concert.