Usage of community group buying in China 2020

According to a survey among Chinese consumers, as of August 2020, around 46 percent of respondents had used community group buying services. Community group-buying expanded rapidly in China after the coronavirus outbreak and the market is expected to surpass 100 billion yuan by 2022.

What is community group-buying?

China’s community group-buying expanded rapidly during the coronavirus pandemic. Emerging in 2016, the new online-to-offline business model first started on WeChat. Via WeChat mini-programs (build-in applications within WeChat), residents from the same local community could order fresh food and groceries from a designated group-buying leader. The leader is responsible for contacting the supplier and distributing the collective order to different buyers. Different from traditional B2C online retail, community group-buying offers community members a bulk discount. During the coronavirus lockdown at the beginning of 2020, community group-buying became an essential channel for Chinese consumers who lived in lower-tier cities to shop for fresh meat and vegetables.

Battleground of Big Techs

Seeing the great potential of community group-buying, many tech giants in China took part in this trend by either launching their own community group-buying platforms or investing in start-ups. The Alibaba-invested community-group buying platform Shihuituan accumulated five million monthly active users in 2020, while Xingsheng Youxuan, its Tencent-backed competitor, announced around ten million MAUs. However, the conglomerates operating in community group-buying services may suffer from the new anti-monopoly guidelines published in November 2020, which forbids unfair competition against local business owners.