Consumer Staples Author: Qasim Khan Jul 16, 2020 03:22 PM (GMT+8)

Alibaba and Meituan clash yet again for a chunk of China's community group market share.

Image credit: EqualOcean

According to 36kr, Alibaba’s retail department is currently preparing to set up a new community group purchasing department. The person in charge, P10-ranked Zou Zhijun, in place since not long ago, reports directly to Lin Xiaohai, General Manager of the Retail Department. A person close to Alibaba has said “Zou's team is still under construction.”

It is worth noting that this is another giant that has entered the field after Meituan issued an organizational adjustment announcement, claiming that it will set up a ‘Youxuan Division,’ entering the community group buying track. With Chen Liang, the Senior Vice President and S-team member responsible.

“Community group-buying is essentially a competition of goods and supply chain capabilities. Small shops are the main battlefield of community group buying. They have private domain traffic. How to help small shops make cash and increase revenue is a matter that the platform should consider. Retail has powerful goods and the abilities of the supply chain – so it is not surprising there is a drive to get involved in community group purchases,” said Zou Zhijun.

Before joining Alibaba, Zou was the founder and CEO of the startup ‘Miao Sheng Huo’ (妙生活), an O2O platform established in 2015 focusing on fresh fruit. It not only supported consumers buying at the store but also provided a three-kilometer delivery service around the store. Due to high costs and difficulties in financing, the company was shut down at the end of 2019.

The entry barrier to the track is low, but the barriers to competition are high. With the entry of Meituan and Alibaba, the community group buying competition is entering a new stage.