At the beginning of the year of 2020, community group buying played an important role in supporting daily life of the residents during the pandemic. Recently, internet giants such as Alibaba, JD.com, and Meituan have entered the scene. Professor Lu Xianghua from Fudan University School of Management conducted an in-depth analysis of the community group buying model.
She pointed out that, as early as 2014, some companies have explored community group buying. But only when the fresh food e-commerce has been more fully developed and when the supply chain and infrastructure have become more mature can this model gain such wide popularity.
Contrary to the traditional sales model, community group buying obtain information of the market before the logistics flow, which greatly reduces the loss rate of goods, improves warehouse distribution efficiency, and saves intermediate cost. Its nature as an offline service and the service range determine that, those who can truly serve consumers well and have strong offline resource coordination capabilities are more likely to win.
Regarding the concerns that internet giants entering the community group buying may grab the livelihood opportunity of vegetable vendors, the professor believes that in fact the competitors of internet platforms are other platforms instead of small and medium-sized vendors. Although the platform does have an impact on the vendors, its refined management of the industry has improved the efficiency of the entire industry chain and created new jobs. Vendors can make changes in time and join the platform ecosystem. Meanwhile, it’s not a purely either-or situation. We should observe community group buying in the long term in order to see whether it has created higher circulation efficiency, better service, and more jobs for the society.
