Comprehensive interpretation of the growth path of community group buying in 2021

Community group buying is in full swing. This article comprehensively interprets the growth path of community group buying from the development of community group buying, the current market size, analysis of factors related to user acquisition, activation, and retention, to future prospects.

The article is long, here is the table of contents:

1. Is community group buying going to be a fad?

Community group buying began to take root in Changsha, Hunan in 2016. Initially, companies such as Furong Xingsheng took advantage of their supply chain advantages and began to explore providing online group buying and delivery to community pick-up points. (Xingsheng Optimization)

Since 2018, community group buying companies have received crazy attention from the capital market, and the entire industry has obtained more than 4 billion yuan in capital market financing; from August to December, Niwonin, Shihuituan, Shixianghui, and Songshupinpin all completed financing amounts of more than 100 million yuan, and Xiaoqule even obtained a large industry financing of 108 million US dollars.

By 2019, compared with a small number of investment and financing events, there were more news about community group buying platforms such as Songshu Pinpin and Xiaoqule due to broken capital chains and poor management, leading to bankruptcy, closure, and withdrawal from the city.

Catalysed by the 2020 epidemic, community group buying has once again become popular and ushered in a new round of development. Major Internet companies have also begun to deploy community group buying.

The high-profile entry of major giants has attracted widespread attention. According to media reports, on December 22, the State Administration for Market Regulation and the Ministry of Commerce organized an administrative guidance meeting to regulate the order of community group buying. Six Internet platform companies including Alibaba, Tencent, JD.com, Meituan, Pinduoduo, and Didi attended the meeting.

The meeting required that Internet platform companies should strictly regulate community group buying operations and strictly abide by the "Nine Don'ts":

1. The right of independent pricing shall not be abused through such means as low-price dumping, price collusion, price gouging, price fraud, etc. Except for the legal price reduction of fresh goods, seasonal goods, overstocked goods, etc., it is strictly prohibited to dump goods at prices below cost for the purpose of squeezing out competitors or monopolizing the market;
2. Any form of monopoly agreement, such as fixing prices, limiting the production or sales volume of goods, dividing the market, etc., shall not be reached or implemented illegally;
3. It is prohibited to engage in predatory pricing, refusal to deal, tie-in sales and other acts of abuse of market dominance without justifiable reasons;
4. It is not allowed to implement business concentration in violation of the law to exclude or restrict competition. If the concentration of operators reaches the reporting standards prescribed by the State Council, it shall be reported in advance, and the concentration shall not be implemented without reporting;
5. It is not allowed to engage in unfair competition activities such as commercial confusion, false advertising, commercial slander, etc., which endanger the fair competition market environment. It is strictly prohibited to fabricate or disseminate false information or conduct misleading commercial propaganda, damage the business reputation or product reputation of competitors, or deceive or mislead consumers;
6. Do not use data advantages to "take advantage of old customers" and harm the legitimate rights and interests of consumers;
7. It is not allowed to use technical means to damage the competitive order and hinder the normal operation of other market players. It is prohibited to use service agreements, transaction rules, technology and other means to impose unreasonable restrictions or impose unreasonable conditions on transactions, transaction prices and transactions with other operators within the platform, or charge unreasonable fees to operators within the platform;
8. The illegal collection and use of consumers’ personal information may not bring potential safety risks to consumers;
9. It is not allowed to sell counterfeit and shoddy goods, which endangers a safe and secure consumption environment.

The policies issued by the state do not mean that community group buying cannot be done. On the contrary, the state is seriously regulating the market, maintaining the orderly and prosperous development of the market economy, and guiding the orderly competition among Internet giants in this field. From another perspective, it is not wrong to understand that the state supports it.

After several years of development, community group buying has verified the feasibility of market development. In addition to the support of capital, whoever can correctly start the growth path of community group buying will be the final winner.

2. Key growth points for community group purchasing

1. Market Status

With the development of the industry, the market size of community group buying has been expanding.

According to iMedia Consulting data, stimulated by the epidemic, the community group buying market developed rapidly in 2020, with an estimated market size of 72 billion yuan. By 2022, the scale of China's community group buying market is expected to reach 100 billion yuan.

In 2020, the size of the community group buying market accounted for less than 0.2% of the total retail sales of consumer goods in 2019. According to CICC's forecast, in the long run, the possible market size will be more than 1.5 trillion yuan.

At present, major giants are still trying hard to "grab people", community group buying is still in a period of rapid development, the market is still in an incremental state, and various products are basically in the growth stage. Therefore, the growth in the number of users and order volume is still the top priority for the development of community group buying platforms.

At the same time, since community group buying products are based on the unique e-commerce attributes of the community, they sell daily necessities including food and daily necessities, and are aimed at users in the sinking market, focusing on cost-effectiveness. Therefore, the optimization of product selection and supply chain will also be the key to the success or failure of the product.

2. Business Model

Before talking about the business model, let’s first have a basic understanding of new retail:

New Retailing, in English, means that enterprises rely on the Internet and use advanced technologies such as big data and artificial intelligence to upgrade and transform the production, circulation and sales processes of goods, thereby reshaping the business structure and ecosystem, and deeply integrating online services, offline experiences and modern logistics to create a new retail model.

——Baidu Encyclopedia

Then let’s look at the community group buying O2O new retail business model:

Community group buying is a shopping consumption behavior of resident groups in real residential communities. It is a regionalized, niche and localized form of group buying based on real communities. Through group buying discount activities provided by community shops to surrounding (within the community) residents, it promotes shops to carry out precise publicity and consumption stimulation to core customers, achieves a rapid increase in regional visibility and reputation of shops, and has a significant effect on shop marketing.

The new O2O retail of community group buying adopts the "pre-sale + self-pickup" method. Community users place orders on their own or are called upon by group leaders in platform malls such as APPs or mini-programs. The platform purchases goods from suppliers and puts them into storage; the goods are shipped out through warehouse sorting and other methods, and delivered to the community pick-up point on the day after the user places the order, and the user completes the pickup by himself.

Compared with traditional e-commerce, the operating model of community group buying is lighter. With the help of social traffic portals such as WeChat, it has the characteristics of easy user community dissemination, centralized merchant management, and the combination of online and offline.

In addition, the online model can not only save store costs and optimize cost plans, but also adopt a pre-sale model with fast cash flow, effectively reducing the pressure of capital turnover. At the same time, it determines purchases based on sales and purchases according to order sales, thus achieving zero inventory to a certain extent and greatly reducing losses. The platform purchases directly from the source, optimizes the supply chain, adapts to the trend of consumption downgrade, and provides cost-effective products, ultimately allowing users to experience good products at low prices.

The battle of community group buying starts with the group leader and ends with the supply chain. This coincides with the saying that growth is born from attracting new customers and dies from retaining existing customers, and also shows that the two key points to its success are:

The speed of acquiring users on the front end and the quality of the back end supply chain. How fast the front-end market expands determines how large the scale is in the short term, and the quality of the back-end supply chain determines how long this scale can be maintained. The two are interdependent and indispensable.

In summary:

• The key points of community group buying: speed of attracting new customers and quality of supply chain
• The current growth focus of community group buying: rapid growth in the number of users and order volume

3. User acquisition and activation

1. Attract new customers

The strategy of community group buying is to attract new members through group leaders, so the key to attracting and activating new members in community group buying currently lies in: the group leader.

The main target of community group buying is users in the lower-tier markets, mainly community residents. The residents in the lower-tier markets can be divided into two categories:

• One is the rural area, where people in a village basically know each other and most of them are familiar with each other;
• One type is communities such as villages and towns, where residents will have more interactions and relatively closer relationships than residents in first- and second-tier cities.

In this case, the group leader is equivalent to a KOL. Due to the natural geographical advantages, there is a certain basis of trust between the group leader and the group members. It is easier for the group leader to expand local users than the platform.

In addition, the platform can also ask the group leader to display the platform logo in front of his home to gain more exposure for the platform, which can also be one of the requirements for cooperating with the group leader.

Therefore, major platforms have shifted the task of attracting new users to the recruitment of group leaders. Since group leaders and platforms have a vested interest in each other, it is more cost-effective to find group leaders than to find users directly. Group leaders, in this case, mainly play the role of the person in charge of attracting new users.

Community group buying is also very active in attracting new group leaders. In addition to working hard on promotional copywriting, it also uses many channels to recruit group leaders:

• Online promotion methods: including local forums, QQ groups, WeChat groups, friend groups; local new media platforms, KOLs, job search websites; online recommendation by local group leaders, etc.
• Offline promotion methods: the platform directly connects with community stores and Cainiao stations; community activities promotion; offline product tasting activities, etc.

2. Activation

For users in the sinking market, high-cost-effective products are more likely to attract attention. Major platforms have launched various preferential subsidy policies for new users (data indicators are defined as: users who have registered but have placed 0 orders). For example, new users of Meituan Youxuan, Chengxin Youxuan and Shihuituan can buy for 1 cent, and new users of Duoduo Maicai can get a full refund.

Take advantage of preferential policies and cooperate with group leaders in publicity to attract new users to complete their first order and activate smoothly.

In this process, we define the user's aha moment as "completing one order on the day of user registration", and the group leader's aha moment as "receiving one commission"; for the group leader, as long as he invites new users to register on the platform, he will receive commissions. Coupled with the generous subsidies provided by major platforms for new users, it will be easier for registered users to achieve aha moments.

In addition to group leaders attracting new users and guiding them to activate users, major platforms are also doing their best to help users successfully reach the aha moment in product design.

The following is a detailed analysis from two dimensions: product design of the new user activation path and new user product selection.

1) New user activation path

Below we take Meituan Youxuan, Chengxin Youxuan and Xingsheng Youxuan as research subjects and take a brief look at their new user activation paths.

Meituan Best Selection:

The main paths and page screenshots are shown below:

From the above process, we can see that the whole process is relatively smooth and has no obstacles. The one-click login of the mini program also directly calls the WeChat interface to obtain the mobile phone number and WeChat nickname information. The user does not need to make any edits at all, which minimizes the user's operating costs. There are several special points in this process that are worth mentioning:

① Red envelope design

When users open the mini program, there will be a reminder to receive a surprise red envelope, which will give users a surprise and be conducted in the form of a lottery, making them feel very lucky. Moreover, they have actively obtained the red envelope, which will make them feel more fulfilled and will attach more importance to the red envelope (a 10 yuan coupon will be returned for purchases over 10 yuan).

But in fact, whether the user receives the product or not is designed by the system (as can be seen from the shopping cart and order confirmation page above), but the effects of delivering the product directly and letting the user take the initiative to obtain it are different.

② The activation goal is clear

“Go to order” buttons are designed on all paths that users must take to facilitate users to place orders.

③ Guidance for successful first payment

Guide 1: Share to the group leader group. There are two points here, sharing motivation and sharing results. From the perspective of sharing motivation, Meituan Youxuan starts from the user's perspective and nominally reminds group leaders to accept orders, so that users have more motivation to share. From the perspective of sharing results, it will make the community more real and active. It is speculated that the platform also hopes to activate more users to place orders in this way.

(But from the perspective of acquaintances, people are reluctant to share what they bought in the group so that acquaintances can see what they bought and what they spent; strangers, on the contrary, do not have these concerns.)

Guidance 2: Guide users to follow the official subscription account to increase user reach channels.

Orange Heart Selection:

The main paths and page screenshots are shown below:

The logic of Chengxin Youxuan is basically the same as that of Meituan Youxuan, and the activity methods are also exactly the same, but the page you enter into Chengxin Youxuan is a specially customized page, and the recommended products are also related products shared by the group leader. There are two main points to explain:

① Red envelope design

When entering the mini program, Chengxin Youxuan will also pop up a window to remind users to participate in the lottery. The logic of the activity is the same as Meituan Youxuan. The difference is that Chengxin Youxuan will directly spin the turntable to give out "lucky" gifts. Compared with Meituan's method of requiring users to click by hand, the steps are simpler and can also make users feel lucky. But this one-step difference will not have much impact, and can be optimized according to your own activities.

② Guidance after payment is completed

After the payment is completed, it will be consistent with Meituan’s guidance point, and users will also be guided to follow the official account. However, the advantage of Orange Heart is that after users follow the official account, they are guided to spread the word. This can be learned to continuously optimize the positioning of each channel and the guidance of each node.

Xingsheng Optimization:

The main paths and page screenshots are shown below:

The main path of Xingsheng Youxuan is the same as that of Chengxin Youxuan, but Xingsheng Youxuan does not have too many operational designs with preferential subsidies, and is relatively simple overall.

The three companies have their own strengths, and to summarize from the perspective of common excellence:

① From the perspective of reducing resistance

You can view the product information before entering the page without logging in or registering to avoid a cold start.

The main paths are kept extremely simple, and the copywriting and design of important information on the page are clear and easy to understand.

② From the perspective of increasing power

Use the recommendation of the group leader as an "acquaintance" to increase trust

Meituan Youxuan and Chengxin Youxuan both offer new users the most favorable discounts and red envelope subsidy policies to help users “try out new products”

③ From the perspective of boosting

The group leader is a natural customer service representative who can help the platform guide new users and help them use products. This is also the advantage of using the group leader role in community group purchasing. In addition, the Orange Heart Preferred APP has a special usage process description on the homepage for new users, and actively guides products to places where the group leader cannot reach.

In terms of external reach channels, the main method is to use the group leader’s social reach; but as long as the user registers, each platform will actively reach out via text messages, and will also guide users to turn on notification reminders for reach out on the mini-programs; in addition, Meituan Youxuan and Chengxin Youxuan have developed their own APPs, which can push notifications to users who have installed the APPs, and after new users place an order, Meituan Youxuan has added a subscription account reach method, which basically covers all reach channels that can be actively triggered.

④ From the perspective of immediate rewards

After users complete their orders, they will receive feedback that "payment is successful"; in the later stage, after each platform starts building a user incentive system, it will definitely give users more feedback on "real rewards".

To summarize the differences:

① Design differences of main paths

When users open the mini programs of Chengxin Youxuan and Xingsheng Youxuan through the product link shared by the group leader, they enter the product details page; while for Meituan Youxuan, the user enters the homepage, which is the product list page.

Xiaoxiao's understanding of this difference is as follows:

• Understanding of fresh food products: This type of product is different from clothes and skin care products on Taobao. This type of product is very daily-use and small-priced. What matters is the user's trust in the group leader and the platform. The difference in the dishes is not that big. In addition, all important information about the product can be basically displayed on the list page, so the difference between the product list page and the detail page may not be that big.
• From the observation of my own and people around me's operating habits: based on the group leader's recommendation in the group and the extremely cheap price (1 cent), they will directly add the product to the shopping cart for purchase without going to the details page to view it.
• But from the perspective of the platform's operating logic: Meituan Youxuan's red envelope for new users is 10 yuan back for purchases over 10 yuan, so they hope that users will buy more to reach 10 yuan, so the list page will make it easier for users to complete this task; Chengxin Youxuan's "1.99 yuan coupon (available for purchases over 2 yuan)" also hopes that users can complete higher transaction amounts, so more "neighbors' products" are recommended on the product details page to stimulate users to add products; and Xingsheng Youxuan has no operational requirements for users, so there is no special design, and it is only designed according to the normal path of current e-commerce.

② Differences in operating methods

• Meituan Youxuan and Chengxin Youxuan offer even greater discounts.
• Xingsheng Youxuan has been operating for many years. Faced with the huge subsidy bombardment after the entry of Internet giants, it has to provide certain preferential subsidies. From this, it can also be seen that Xingsheng Youxuan’s strategy for acquiring new users may be different from that of Meituan and Chengxin, and it is more focused on steady and solid progress.
• However, the new user activation subsidies of Meituan and Chengxin are indeed very effective. Whether it is the group leader's recommendation or the user's spread, it is easier to spread and close deals quickly.

③ Differences in the design of the login process

• When logging in, Meituan and Chengxin first obtain the user's WeChat mobile phone number, and then guide the user to authorize the nickname; Xingsheng does the opposite.
• In this design, it may not have much impact, but giving priority to obtaining mobile phone numbers is better than authorizing nickname information. Only by obtaining mobile phone numbers can more operational reach be made to users. Only knowing the nickname has no operational value to the platform.
• In the login process, Meituan’s guidance method is more serious, Xingsheng Youxuan comes with a slogan, and Chengxin’s design here uses copywriting and picture design to further simplify the process and make full use of page resources without causing more interference to users.

2) New user discount product selection

In addition, product selection for new user activation is also a science, so let’s briefly analyze the current new user product selection logic of Meituan Youxuan, Chengxin Youxuan, and Shihuituan:

Chengxin Youxuan and Meituan Youxuan have more trusted exclusive products, with the first three displayed on the homepage; Shihuituan currently has only three.

Without considering the difference in quantity, we analyze from the following points:

① In order to achieve the Aha moment when new users are activated, users need to feel the core value of the product, which is “good quality and low price”. Low price is easy to achieve, and the goods must be of relatively high quality after they are received. Therefore, in this area, most of the goods selected by Orange Heart Youxuan are relatively “standard” goods, and there are not many vegetables of this type. They are relatively more stable and are not likely to cause user dissatisfaction with the products.

② In terms of product positioning, the community group buying platform hopes to become the vegetable basket of ordinary people, so there will be more such product selections to fill the user's subjective consciousness when guiding new users. This is the case with Meituan Youxuan. On the basis of ensuring good quality and low price, Meituan Youxuan provides more product positioning-related product choices, which will also allow users to intuitively understand some product positioning.

③ Let me emphasize on "low price". Regardless of whether the products provided by the platform are really cheap enough, 0.01 yuan will always be more eye-catching than 1.00 yuan. It can be found that the products on Meituan’s preferred products are not more than 10 yuan, and many of them are 0.01 yuan. Unless you are a really picky user, Meituan’s prices will be more attractive in terms of first attention. Combined with the fact that new users are unfamiliar with the platform, they can access it at low cost (almost no cost).

Therefore, overall, Meituan Youxuan’s category selection may be better.

(Finally, as new users activate products, as the products are improved in the later stages, major platforms will continue to optimize their product selection strategies based on user portraits, data and other dimensions.)

4. User Retention

In terms of retention on retail e-commerce platforms, even though users in the sinking market are more sensitive to prices, they also have certain requirements for quality; when two platforms compete, if the quality of one platform's products is not good, then if the price difference is not particularly large, users will not choose that platform for a long time even if the platform's products are priced lower, not to mention that the community group buying categories will not create too large a price gap.

Therefore, in order to retain new users, we must provide value for money and exceed expectations, so that users can continue to consolidate their subjective perception that the platform is of high quality and low price.

In order to achieve good quality and low prices, high-quality goods, supply chain and efficient operation management become the key to the success of community group buying.

A successful community group buying platform requires a mature same-city retail industry chain of online demand-offline distribution-warehousing supply chain. High-quality products and supply chain as well as efficient operation management are the key to the success of community group buying.

Next, we will briefly analyze its impact on products and retention from five dimensions: product selection, supply chain, group leader operation, product design, and expansion area selection.

1. Product selection

Community group buying is essentially a retail business, and the retail business is all about service and supply chain; for community group buying, if the platform wants to develop in the long run, the ability to select products and understand regional consumers is crucial.

According to iMedia data survey, users mainly purchase vegetables, fruits and meat products online, and the purchase of food ingredients has become the most important demand of users. Community group buying also focuses on this in product selection.

2. Supply Chain

Good quality and low price can be said to be the core competitiveness of community group buying. In order to maintain the price advantage while ensuring the "good quality" of the products, the supply chain is the key. A high-quality supply chain directly determines the product quality and supply continuity of community group buying. Therefore, choosing a good supplier is one of the key points that directly determines whether community group buying can be done.

The solution is to optimize the links, improve the layout of the supply chain, reach directly upstream, and solve the pain points of information asymmetry and price increases at each level of wholesale; at the same time, the pre-sale C2B model of community group buying can solve the problems of inventory backlogs and difficulty in ensuring product quality to a certain extent; in addition, the Internet accumulates data to build consumer portraits, thereby providing feedback and optimizing the supply chain.

If we want to talk about it in detail, there will be a lot of in-depth things in it, which can be discussed in a separate article, so in this article we will briefly understand the supply chain design of Meituan Youxuan, Chengxin Youxuan, Xingsheng Youxuan, Shihuituan, and Duoduo Maicai.

Meituan Youxuan: The distribution mechanism of large warehouses - grid stations - self-pickup points (which can also be seen from the product design). Of course, the recruitment and selection of suppliers is also very important.

Xingsheng Youxuan: Supplier-Service Manager-Store. Xingsheng Youxuan has built its own logistics system, allowing suppliers to send goods to Xingsheng Youxuan’s shared warehouses, and then through shared warehouses, B2C warehouses, and service stations, the goods can be matched from the supply location to the self-pickup point within 12 hours.

Shihuituan: It is impossible to understand from the product, but we know from other channels that Shihuituan’s business currently covers the whole country, with six major regions in Central China, East China, North China, South China, Southwest China, and Northeast China, and more than 100 cities; and Shihuituan has always insisted on expanding based on city circles, and then created a three-level warehouse model based on the city circle model it has created: regional warehouse (shared warehouse) + city warehouse (distribution warehouse) + service station

Duoduo Maicai: From the very beginning, Pinduoduo has identified supply chain optimization as a long-term strategic development focus, which has enabled Duoduo Maicai very well. It can also be seen from Duoduo Maicai products that its current supply chain logistics system also adopts the form of grid stations.

It can be found that the supply chain systems of Meituan Youxuan, Xingsheng Youxuan, Duoduo Maicai and Shihuituan are basically the same.

Orange Heart Selection: No relevant information was found. It is speculated that if it wants to maintain its supply chain advantage, it will probably adopt this approach, or there will be a better solution.

3. Efficient operation of the group leader

The group leader is the key point linking consumers and merchants, and the group leader’s operational ability directly determines the purchasing power of community consumers. Therefore, the operation and service level of the "group leader" becomes an important factor affecting the success of community group buying.

In addition to attracting new customers, the work of the "group leader" also mainly includes managing the community, recommending products and reminding customers to pick up their goods.

The role of group leaders in recommending products through WeChat communities is quite crucial. The group leader can clearly know which products are more popular in the community and can make recommendations based on them. He can also choose to recommend high-subsidized products on the platform. While helping group members to screen products, the group leader can also guide them to continue consuming.

In this process, the group leader needs to think about how to promote consumption, provide thoughtful services, answer inquiries, and how to handle disputes and assist with after-sales service; however, the business capabilities of group leaders vary. Some group leaders just do it to earn money as a group leader and are not concerned about how much they do. Some group leaders will seriously study and operate the community to maximize their own interests, and such group leaders are also a scarce resource.

Therefore, it will become very important to improve the operational ability of the team leader and how to boost the morale of the team leader. This will also be the focus of platform operations now and in the future.

We will not introduce the detailed tactics of group leader operation in detail here. We will briefly analyze how the platform can better manage group leaders and maximize their value to the platform:

• Team leader training system: Team leaders are trained and some learning resources can be provided to help them improve their business capabilities.
• Fixed incentive system for team leaders: transparent commissions and instant rewards; combined with a task system, fixed tasks are assigned every month or week, and extra rewards can be obtained by completing tasks.
• The leader's varied rewards: often hold some mission challenges with appropriate difficulty levels. You can get mysterious prizes by completing the challenges.
• Group leader learning system: manage and operate group leaders, showcase the performance of group leaders with better performance, and invite them to share. Those with outstanding performance can be further promoted or given more resources. In addition, more ideas for making money can be provided to group leaders, such as the motivation for sharing is to expand personal influence. Other willing group leaders can also pay to learn operational skills from outstanding group leaders.
• Team leader care system: provide care to team leaders on holidays, birthdays and other occasions.

4. Product Design

Although group leaders play an important role in attracting new users and retaining customers at this stage, their loyalty to the platform is not high, and the quality of their service is unstable. Part-time group leaders may "run away" at any time. In this case, how to trigger and awaken end users through their own products and make them more "loyal" will be the top priority of product work.

First, let’s take a look at the current product design of the platform from the following dimensions:

1) Product structure

The general structure is as follows:

This structural design is more in line with the general design structure of current e-commerce products and in line with user cognitive habits. In addition:

• Meituan Youxuan added a picture and text recipe module, and Xingsheng Youxuan added a video recipe module
• As a large module in the Pinduoduo APP, Duoduo Maicai is designed to be extremely simple. The design is also consistent in the mini program, with only three important modules: homepage, order, and shopping cart.

Although the internal structure of the products is basically similar, the detailed designs are still different:

front page:

① Brand exposure

• Orange Heart Selection: Buying vegetables is cheap;
• Meituan Youxuan: cheap and good products, pick up at 16:00 the next day, worry-free after-sales service;
• Xingsheng Youxuan: a warm community e-commerce company; Duoduo Maicai: worry-free after-sales service, brand guarantee, fast refund, and next-day self-pickup;
• Shihuituan: next-day delivery.

To sum up, the main selling points are: good quality and low price, fast delivery (next-day delivery), and worry-free after-sales service.

In terms of display and selling point summary, Meituan Youxuan is better.

② Pick-up point selection

It helps to identify the needs of the user’s community and optimize the strategy accordingly.

③ Product classification entrance

It helps users to have a preliminary understanding of the products on the platform and also helps users to further select the products they need.

④ Operational activities

Regular event designs such as holiday specials, limited-time flash sales, and group purchases for thousands of people use the psychology of scarcity and time pressure to stimulate user consumption.

Classification:

• Meituan Youxuan: The order of products in the categories on the homepage is basically the same as that of products of the same type on the homepage, with very little difference.
• Orange Heart Selection: The category entrance on the home page is directly linked to the "Classification" module, and the products under the floating category are sorted differently from the products under the corresponding category.
• Xingsheng Youxuan: Directly link the category entrance on the homepage and the type entrance of the recommended products below to the corresponding types under "Classification".
• Shihuituan: The floating entrance on the homepage directly links to the category, and the order of the products entered through the fixed display entrance on the homepage is exactly the same as that in the category.

From the perspective of the relationship between the homepage and the categories: currently, there is a high degree of overlap between the homepage content and the category content, but in the long run, with the refined operation of user needs and the acquisition of user data, the homepage will have more recommendation strategies; and the classification module is more like a "library", which is convenient for full search according to specific category needs.

Cart:

On product recommendations:

• Meituan Youxuan and Chengxin Youxuan: Optimize product recommendation strategies based on the product types in the user's shopping cart, and focus on the user's first step in shopping within the product
• Xingsheng Youxuan and Shihuituan: They are relatively simple, but in the later development, page resources should not be wasted; and judging from the success of Pinduoduo’s diversified operations in the sinking market, users can accept the richness of the page.
• Duoduo Maicai: Since the shopping cart is in the form of a pop-up window, the content becomes lighter and there is no need to design more content on the pop-up window. In the fresh food shopping scenario, users are unlikely to fill up their shopping carts like they do on Taobao. In addition, vegetables, fruits, meat and poultry have a shelf life and a certain seasonality. Users can simply add them to the shopping cart and pay for them whenever they need them. Therefore, pop-up window design can fully meet the needs. However, for a product like Taobao, it may not be possible to design it in the form of a pop-up window.

About the design of the self-pickup point:

• Meituan, Xingsheng, and Shihuituan have self-collection point displays, but Chengxin Youxuan does not.
• Personal thoughts: Since this type of platform is different from the fruit delivery in regional offline stores such as Baiguoyuan and MissFresh, it does not involve the issue of different inventory of goods in each store, and the pick-up points here cannot be modified. Therefore, whether from the functional logic or the usage scenario, the display of the pick-up points seems a bit redundant.

mine:

In "My", you can see a lot of product operation traces and other information:

• For example, Meituan’s coupons, red envelopes, and activity centers; Chengxin Youxuan’s balances, coupons, and money-making centers; Xingsheng Youxuan’s and Shihuituan’s coupons
• It can also be seen from the operating methods that Meituan and Chengxin will have relatively more operating ideas, and will gradually improve the design of the operating system and user incentive system; while Xingsheng Youxuan and Shihuituan will have relatively fewer operating traces, but for community e-commerce, operating methods are also very important, especially in the later stages of product development.

menu:

Both Meituan Youxuan and Xingsheng Youxuan have added recipe modules, the only difference is the form. Let’s analyze it from the perspective of the necessity of this function and the possibility of future development.

From the perspective of functional necessity:

• According to iMedia Research data, users mainly buy vegetables, fruits and meat products online, and the purchase of ingredients is the most important demand of users. Therefore, combining the actual consumption needs of users, adding "recipe" design can expand the user's usage scenarios, and add social attributes to e-commerce, increase the frequency of user use, and be more conducive to user retention.
• Considering the popularity of recipe sharing in the form of short videos such as Douyin and Kuaishou and the successful development of Xiachufang, the addition of this function will bring more possibilities to the product.

From the perspective of future development possibilities:

• If the success of this model is verified in the later stage, all major community platforms will quickly invest in building a "recipe" system.
• The recipe format will not only be limited to pictures, texts, and short videos, but will also include medium and long videos, live broadcasts, and more.
• In terms of content construction, it will no longer be just cooking, but will also include baking, desserts, drinks, fruit platters, and more.
• In the construction of the operation system, we will also consider making full use of the scenario and demand of "learning to cook" to explore more operation methods.
• Most importantly, the platform can invite KOLs from related fields such as Douyin and Kuaishou to join and attract more UGC creations. Later, this blogger may become the new main "group leader" to bring goods

2) Closed-loop design of user behavior on each platform

The hooked model, which uses the hooked model to design a closed loop of user behavior, is a commonly used method to improve retention.

The user behavior closed loop means actively reaching out to users through a certain channel, guiding them to complete a key behavior, and giving them corresponding "rewards"; through the design of the user behavior closed loop, users repeat the closed loop path, continuously cultivate and consolidate user usage habits, make users dependent, and subconsciously open the product when they have corresponding needs in the future.

① Let’s take a look at the existing reach channels for each product

• SMS: Available as long as the user registers. But now such marketing text messages can be easily intercepted by mobile phones.
• Push: Currently, Meituan Youxuan, Chengxin Youxuan, and Duoduo Maicai have corresponding independent or dependent APPs that can perform push push.
• WeChat ecosystem: mini-programs, public accounts, subscription accounts, and video accounts

The WeChat ecological matrix Orange Heart Selection is relatively complete, and the official service account is certified, which is more authoritative and increases the sense of trust.

From another perspective, as mentioned in the above new user activation section, although each major platform currently has its own WeChat ecological matrix, it is still necessary to guide users to pay attention at the right time, otherwise it will still not be able to reach users.

② Possible behavioral design

For the platform, cultivating users' habits is to open the platform products and complete transactions. In addition, community group buying e-commerce itself is a relatively medium- and high-frequency application, so the most important thing in our behavioral design is to "complete the order." A higher-frequency behavior is to let users open the products frequently to browse and take a look.

Therefore, for these two purposes, we will have push designs and reach guidance methods with different frequencies.

③ Current behavior closed-loop design

Currently, Xiaoxiao only has two ways to reach the screenshot of SMS and mini-program service notifications. Meituan, Chengxin and Duoduo all have push, but there are no examples here, so I won’t say much.

Take Orange Heart Preferred as an example for text messages (add to shopping cart & no longer display it):

Service notifications take Duoduo Maicai as an example:

Problems with the current closed loop:

• It seems that we are paying more attention to the opening rate of mini programs than the purchase rate of closed loops.
• In addition to the strong connection of pickup notifications, other reminders similar to red envelope subsidies, price reduction notifications, etc., are directly entered into the homepage of the mini program, and there is no corresponding guidance next; for example, the price reduction reminder for Duoduo Maicai products is not the corresponding product, but the homepage of the mini program, and the path cannot be well connected; and the eggs of Orange Heart Preferred cannot be found directly to buy this cheap product.

Closed-loop optimization suggestions:

• Design more refined paths for different types of reminders and form sop. For example, in the example of Orange Heart Egg, you can directly enter the product details page by opening the mini program, or place the product at the first place on the homepage to facilitate users to find the corresponding product.
• Reminders are classified according to goals. One is to constantly enter the user's vision and let users remember the product's reminder type. The other is to hope that users can click on the reminder to enter the mini program to complete the purchase behavior; design copywriting and data indicators according to different purposes.

④ Explore new closed-loop design

Since we cannot actually get internal data, we can simply think about possible closed-loop designs from three dimensions based on our understanding.

a. Increase the frequency of participation

At present, since the product is still in the early stage of growth, many operating methods have not been added. We analyze it based on common gameplay:

• Later, daily check-in and other task systems were introduced to increase users' product opening rate;
• The orchard currently launched by Orange Heart can also serve as an open guide;
• The recipe function launched by Meituan and Xingsheng is a high-frequency function that can guide users back to the product.

b. Improve participation intensity

For community group buying platforms, intensity = money. The larger the amount of consumption per time, the higher the intensity, so consider from the perspective of increasing customer unit price:

• High-quality recipes are recommended to give content with larger amounts of content to a higher weight to guide users to increase their consumption amount;
• Make full use of the current existing red envelopes with thresholds;
• Improve the user incentive system.

c. Add usage scenarios

In addition to the use scenarios in a broad sense, it also includes the improvement of trigger channels:

• At present, the platform's subscription accounts, official accounts, and video accounts are not well utilized, so it is necessary to add contact points to cover more user usage scenarios;
• Recipes add the production methods of breakfast, desserts, fruit trays, etc. to cover more life scenes for users.

According to the above analysis, the recipe function triggers are used as an example:

• Closed-loop design: prompts for popular/new/tasting recipes, etc. -> Click to open the APP or mini program to enter the corresponding recipe details page -> Browse the recipes -> Buy dishes based on the recipes;
• Trigger channels: It needs to be divided according to the trigger channels, such as using public accounts and subscription accounts to reach them. Service notifications mainly send discount notices such as price reduction and arrival reminders. Push can be more comprehensive because push is relatively weak;
• Trigger frequency: The recipe reaches up to 3 times a day, and the time of reach can be designed according to the breakfast, lunch and evening meals;
• Data indicators: mainly purchase rate, and also need to monitor the reach rate, opening rate, and recipe browsing rate;
• Prerequisite basics: The recipe function is indeed helpful for user retention through data analysis.

5. Extended region selection

In addition, all community group buying platforms are selectively developed in a certain region and gradually expanded. It is also a science for city selection. Interested friends can learn about it through the article "Research on Community Group Buying City Selection Strategies".

5. Future Outlook

1. Focus on subsequent efforts

To sum up, there are three main points:

• Improve the management system of the group leader;
• Continuously optimize the supply chain;
• Improve the user habit cultivation mechanism and user incentive system.

2. A longer-term perspective

From a longer-term perspective, community group buying may embark on the road of becoming a group leader and coexisting with physical stores.

What is the de-group leader?

In the short term, how to quickly recruit and manage group leaders and use group leaders' resources to fully provide value for the platform has become a focus of the platform's efforts.

But without strong operations, the loyalty of the group leader is very low. At this stage, a group leader is not just the group leader of a platform, but the group leader of each platform. The group leader will not only recommend products from a community group buying platform, and do it when there is business. This is also an inevitable problem of interest binding. As long as you expand your territory, no matter what reward you give to the group leader, the group leader will accept it.

However, at the current stage, the platform also needs the group leader to obtain new users for the platform to the greatest extent and guide the consumption of community users. The group leader also needs the platform to bring benefits to him, so this issue can be ignored in the early stage; but with the development of the platform and the market share increase, the platform's requirements for the group leader will be how to help the platform maximize the completion of order transactions.

At this time, it is possible that the team leader you have worked hard to train may also help others complete the transaction volume task, so in the end, either de-joining the team leader or make the team leader loyal.

It is difficult to be loyal to a platform by one person, so it is possible that the platform will eventually develop into de-group leader and achieve standardized operations.

But this requires the implementation of two prerequisites:

• First, a good trust foundation has been established between users and the platform, and the scale of group members is relatively stable, the core drainage role of the group leader will gradually disappear, and thus, the group leader's functions will be transformed into simple customer service work.
• Second, based on the needs of traffic concentration and monetization, the platform guides users' browsing and purchasing habits from WeChat group recommendations to the App, so the group leader will naturally no longer be the core of operations.

Therefore, it is still necessary to quickly optimize the supply chain and try our best to continuously cultivate users' active usage habits.

Secondly, cooperate with physical stores to coexist and improve consumption scenarios.

Select group leaders with physical stores, cooperate with them, and provide them with high-quality goods. Categories that are difficult to sell can form mobile transactions between each other, and the hot selling supports booking in the store.

Users always have immediate consumption needs and "shopping" needs. There are always users who like to see the products before purchasing, especially when choosing fruits; unless they have a strong trust foundation, the platform can provide fruits that meet the taste every time, otherwise they all need to taste them first and then buy them.

Therefore, if this is used to meet the user needs in more scenarios, it is a win-win cooperation.

Author: Sun Xiaoxiao

Source: Product Manager Sun Xiaoxiao