Community group-buying initiatives take off in China as next billion-dollar market
- Start-ups Shihuituan and Xingsheng Youxuan are currently leading the charge in China’s community group-buying market
- About 60 per cent of community group-buying platform users are from the country’s lower-tier cities and rural areas
In a small neighbourhood in Chengdu, capital of southwest China’s Sichuan province, a group of about 380 people from the same residential community goes online every day to check the grocery list sent via WeChat by their local express courier station.
He Fang, a 55-year-old homemaker, joined this WeChat group hosted by the station in March, when most of the country was still on government-imposed lockdown to prevent the spread of Covid-19. She said this group-buying effort in the local community enables members to get discounts when buying items in bulk, with individual orders ready for pickup in a day or two.
“It’s very convenient and occasionally cheap,” He said. “I remember one time when apples sold for only half the price of what supermarkets charged.”
While group-buying is not new in China, services that are focused on the basic needs of local communities – without all the hoopla from live-streaming video influencers – may be ripe for expansion amid continued health and safety concerns across the country.
“Chinese internet companies are looking for new markets to drive growth,” said Zhao Yue, a logistics analyst at Beijing-based research firm Analysys. “There are pots of gold to be found in the community group-buying market, especially in terms of providing online groceries in lower-tier cities.”