Beijing wags a finger at community group buying
Business & Technology
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China’s market regulators voiced a “high degree of concern” over the practice of community group buying yesterday, escalating Beijing’s crackdown on tech monopolies and their eat-or-be-eaten business models.
- Community group buying (社区团购 shèqū tuángòu) pools buyers of consumer products and groceries to give them discounts. It has made Pinduoduo, its most famous practitioner, one of the most valuable companies in the world.
- Alibaba, Tencent, JD.com, and many more have joined the trend, investing billions of dollars over the last year.
The context: Last year, the People’s Daily published a commentary calling on internet giants to be more responsible and avoid obsessing over “the traffic of a few bundles of cabbage and a few pounds of fruit,” the commentary said.
- By igniting a price war that squeezes small business owners, group buying has “damaged the development of existing supply chains” and “disrupted social order,” wrote Beijing’s antitrust watchdog.
- “If a convenience store joins community group buying, it is committing suicide,” said a convenience store owner in a video last year. “If it doesn’t join, it will be murdered,”
The takeaway: As the common prosperity campaign ramps up, Beijing’s emphasis on supply chain security, social stability, and antitrust make group buying a natural enemy.
