Group buying fission: How does community e-commerce play with "mini program + distribution"?

A few years ago, a neighbor sent me some fruits. I was the tenth house she visited, and she had delivered fruits to nine houses before that.

You must be asking, why does my neighbor send me fruit? Because she is the group leader of our community, we always go to her when we buy fruit, and every time we buy from her, we feel that the fruit is both cheap and delicious.

So why did she become the leader? This has to start with the community e-commerce that became popular in 2018.

What is community e-commerce?

When talking about community e-commerce, we have to talk about its "community + group buying" moss , or to be more specific: " online group buying pre-sale + offline community pickup" .

Let’s look at the online world first. Why do community e-commerce companies choose group buying? Many people think that it can be spread through social relationships among acquaintances, plus price leverage, which can easily increase sales quickly, but for community users, they can connect in other ways without group buying, so this is not the fundamental reason.

What would that be? The answer is to make it easier for merchants to unify the distribution of goods.

Because of the group buying approach, the group leader can place a unified order based on the group buying situation, and the merchants only need to centrally distribute the goods based on the group leader's order. This can reduce inventory and avoid product squeezes. Therefore, most of the current community e-commerce adopts the pre-sale model.

It can be said that "group buying + pre-sale" is the essential model of community e-commerce online marketing.

Looking at the offline aspect, self-pickup points and community stores are the main delivery methods adopted by community e-commerce, with the aim of reducing service costs.

This is because the production and sales path of traditional products such as fresh produce is " place of production-wholesaler-city warehouse-store or forward warehouse-consumer ".

There are two major problems with this path: one is high loss, generally 30%-40%; the other is high cost, with material consumption and delivery fees accounting for 15%-20% of the order.

However, the use of self-pickup points and community stores can solve these two problems well. The former only requires users to pick up the goods themselves, while the latter allows group leaders to pick up the goods, and merchants only need to deliver to the corresponding locations.

The community e-commerce company "Daluobo" used this method to reduce losses to 2%, while "Shixianghui" reduced the delivery cost per order to 0.5 yuan.

In general, the comprehensive model of adopting "group buying + pre-sale" online and establishing self-pickup points or community stores offline has greatly reduced customer acquisition and operating costs, laying the foundation for the business model for the rapid development of community e-commerce.

How does community e-commerce operate and convert traffic?

In addition to model innovation, the rapid development of community e-commerce is also inseparable from more efficient traffic operations and conversion methods. The core is to do relevant work around the group leader. So, what are the specific routines?

"Mini Program" assists group leaders in social marketing

What channels does community e-commerce use to sell products? The answer is to recruit group leaders, and then have the group leaders sell to users in the group through self-built or co-built WeChat groups, which is called community marketing.

Generally speaking, most members of a WeChat group are the WeChat friends of the group leader. The advantage of this is that when the group leader recommends a product, the trust established through social relationships can be converted.

What the platform can do at this time is to highlight the quality of the product in the display, and use price anchors, scarcity effects and other means to attract users to buy. For example, "Niwonin" attracts users to click and place orders by displaying beautiful fruit pictures, highlighting countdowns and sales volumes.

Another thing the platform can do is to provide tools for group leaders to conduct WeChat group marketing.

For example, before "Niwonin" launched relevant tools, group leaders had to collect orders by themselves, and users had to send red envelopes to place orders. This was both error-prone and time-consuming for group leaders. After launching the relevant tools, monthly sales increased by 40%.

This tool is the group buying mini program. Group leaders can use it to forward group buying products and promotional activities to the group, and users can use it to place orders, greatly improving transaction efficiency.

Of course, not all community e-commerce companies have group buying mini programs, but other group buying mini programs that specifically help community e-commerce companies and group leaders connect, such as "Group Link".

"Qunjielong" provides a group-buying mini program to help community e-commerce manage group leaders, assist group leaders in operating the community and launching activities. Because of this strategy, it has accumulated 3.4 million users and achieved a single-day turnover of over one million by relying on a 1% commission on each order.

However, the group buying mini program can record user behavior data, which is a very important resource that can guide business iteration. Any community e-commerce will try to own its own user data, which will be a big challenge for third-party group buying mini program providers such as "Qun Jielong".

"Training Management" Unleashes the Distribution Effect of Group Leaders

After the community is established, it needs to be operated and managed to ensure a normal atmosphere and sustainable transformation.

However, most of the group leaders are mothers, and a few are community convenience store owners. For example, 70% of "Nongfu Orchard" are mothers and 30% are community store owners.

Their levels vary. For example, a community store owner may have some marketing experience, but a mother may not necessarily understand these things. The group leader is very important for community e-commerce and is in a particularly critical position. This needs to be solved through systematic training and management.

For example, "Linlinyi" launched the "Group Leader Business School", hoping to improve the sales ability and loyalty of group leaders through standardized management and step-by-step incentives; "Niwonin" has also developed a complete set of standard processes to complete the screening, training, and assessment of group leaders until signing the contract.

So. What are the specific procedures for team leader training?

First, group leaders are selected according to certain standards, generally those with strong plasticity are selected, and then a group of group leaders is established for unified management; secondly, specific business training is carried out, such as group opening training, sales training, skills training, etc., as well as aspects such as platform background, product source, and reward and punishment system; finally, a unified assessment is conducted, and group leaders are eliminated or signed based on the assessment results, or targeted guidance is provided to the top, middle, and tail group leaders, and then assessed, eliminated, and signed.

In the entire process, the content of training is the most core part. It must be detailed to every aspect of the entire business and require specialized training.

For example, group leaders must learn how to communicate with users before and after the group starts; must know which marketing techniques can increase sales; must know how to become a community opinion leader; must understand how to use group-building techniques to expand the size of the group; must learn to cultivate a sense of responsibility in exchange for user trust, etc.

Therefore, as long as they undergo systematic training and management, group leaders can conduct community marketing more easily, thereby expanding distribution income by increasing sales, and helping community e-commerce companies achieve higher turnover and larger scale.

Two major challenges in community e-commerce operations

From the above analysis, we can see that although the "online group buying + offline community" model of community e-commerce has solved the two major problems of customer acquisition cost and service cost, it also has two more serious problems.

The first is that it is difficult for the channel to truly penetrate the grassroots.

Although the KOL effect, acquaintance relationships, and long-term community activity of the group leader can bring certain sales, the number of WeChat groups established based on the community is limited, and the number of communities in a city is not infinite. For example, in a city like Changsha, there are no more than 1,500 communities with more than 1,000 households.

In order to ensure growth, one must either increase the community conversion rate or expand into other cities. The former can only increase transaction rates by a maximum of 10%, while the latter requires reconsidering costs and cycles, which is undoubtedly a huge test for the nascent community e-commerce.

The second is that the team leader is difficult to fully control and is very likely to betray.

There is only one way for community e-commerce to attract and retain group leaders - profit sharing, and more specifically there are two ways.

One is to simply share profits with the group leader. Currently, the proportion of the entire community e-commerce industry is 10%, and the highest will reach 25%; the other is the group leader fission, which is essentially a micro-business model, that is, recruiting new group leaders through old group leaders, and the group leaders will receive rewards for recruiting people, and will be evaluated and promoted based on the number of new group leaders recruited and their sales performance.

Although the above two methods can quickly expand channels, it is also easy for group leaders to form groups, which often leads to collective job-hopping, collective order-swiping, etc., causing serious damage to the platform.

Therefore, from these two points of view, community e-commerce is not a perfect business model. In the future, it will not only face traditional problems such as distribution and customer acquisition, but also need to find ways to improve the management capabilities of channels and group leaders. These will cause operating costs to rise, thereby affecting the profit model of community e-commerce. It can be said that this is a considerable challenge.

Summarize

(1) The essence of community e-commerce is "online group buying pre-sale + offline community pickup". The combination of the two reduces customer acquisition and service costs.

(2) In terms of specific operations, the focus is on the conversion of the community and the management of group leaders. The former uses mini programs to help group leaders conduct community marketing, and the latter enhances the group leaders' sales capabilities through systematic training.

(3) However, community e-commerce also has two major problems, namely, it is difficult for channels to truly penetrate the grassroots and it is easy for group leaders to defect. If these problems cannot be solved, it will affect whether the community e-commerce model can be verified.

In general, community e-commerce, as a new track that started in 2018, has attracted more than a hundred players to join. Giants such as Alibaba, JD.com, and Suning have also begun to make efforts in this area, and competition will become more intense in the future.

However, even the newest business model should be based on profitability and reputation. How to ensure product quality, how to improve supply chain efficiency, and whether the difficulty in expanding channels and managing group leaders can be effectively controlled will be the focus of community e-commerce in the future.

As an operator, the "mini program + distribution" gameplay of community e-commerce can provide some new ideas for traffic operation. As for how to combine it with the field you are engaged in and how to achieve a reasonable conversion effect, you need to think and practice on your own.

Source: Dugushang