This smells like a shareholder funded low margin business. Currently platforms are doing uneconomic business to acquire customers but when they will try to make this business economic the customers will be unhappy as they are used to getting good deals using this platform. So real test is how many will stick around once the lucrative discounts and offers are not there any more......or will they switch to alternatives.
I remember in Asia Uber was aggressively competing and their rides were super cheap......eventually they folded the business and sold it off because there is so much money investors are willing to lose.
So shareholder funded charity is not a viable business model.....better invest when you know who the survivor is in this crazy battle for market share instead of profitability.
I found this article very insightful after hearing your analysis of CGB on the Tech Buzz China podcast. My start-up Naborino is adapting the CGB model for North America. We're always interested in English-language analysis of China's CGB market if you have any recommendations.
Hybrid business model indicates limits of digital exclusive model- the techie dream of removing all human judgement from product process. That was the lowest hanging fruit. Hybrid models will bring their own benefits and liabilities but won't ever generate the margins that digital exclusive model did. And remember that massive market cap digital exclusive interface Amazon still barely makes money on its direct two party sales.
The vendors have now found a clever way to push the final mile delivery to others and the buyer is paying for it. This reduces their aggravation. Very clever as the buyer ends up paying for it. sc
The hottest and least understood e-commerce model: Community Group Buying
This smells like a shareholder funded low margin business. Currently platforms are doing uneconomic business to acquire customers but when they will try to make this business economic the customers will be unhappy as they are used to getting good deals using this platform. So real test is how many will stick around once the lucrative discounts and offers are not there any more......or will they switch to alternatives.
I remember in Asia Uber was aggressively competing and their rides were super cheap......eventually they folded the business and sold it off because there is so much money investors are willing to lose.
So shareholder funded charity is not a viable business model.....better invest when you know who the survivor is in this crazy battle for market share instead of profitability.
I found this article very insightful after hearing your analysis of CGB on the Tech Buzz China podcast. My start-up Naborino is adapting the CGB model for North America. We're always interested in English-language analysis of China's CGB market if you have any recommendations.
(Other than your newsletter of course!)
Can someone please explain the third bullet point under the “Online grocery 2.0 community group-buying” section? I have the below doubts.
1. “Posting a product selection…” Does the community leader post different SKUs of a single product type, say kitchen towel or different products?
2. “pay when their collective demand exceeds…” Does this mean an order would be placed when the total quantity exceeds a particular threshold?
Hybrid business model indicates limits of digital exclusive model- the techie dream of removing all human judgement from product process. That was the lowest hanging fruit. Hybrid models will bring their own benefits and liabilities but won't ever generate the margins that digital exclusive model did. And remember that massive market cap digital exclusive interface Amazon still barely makes money on its direct two party sales.
The vendors have now found a clever way to push the final mile delivery to others and the buyer is paying for it. This reduces their aggravation. Very clever as the buyer ends up paying for it. sc
I wonder if this evolves inevitably into a MLM scheme which are prone to crackdowns.
Super interesting as always!
Interesting article! Question: Why is this model better than the Freshhippo model?
Doesn`t each Freshhippo store already serve as a community pickup point? In fact, they can even deliver directly to your door.
Is this just a temporary solution until Freshhippo comes to your town?
if they reasonable can manage 3 groups at a time.. with 10% cut, how much per month is that on average?