East-to-West Learnings: Alibaba’s Freshippo Adopted a Community Group-Buying Model amid the Coronavirus Crisis

Residents from the same community compound could form a group on WeChat to communicate what they wanted to buy from the Freshippo store near their home. Freshippo staff would deliver the orders to the designated collection point the following day. This community group-buying model helped to reduce the number of deliveries made to the same area.

The community group-buying model was popular before the coronavirus outbreak: Popular community group-buying platform Xing Sheng You Xuan was processing an average of 4 million orders per day by September 2019, when it achieved monthly gross merchandise volume (GMV) of ¥1.1 million (around $155.3 million)—three times the GMV from January 2019. The coronavirus outbreak made this model more popular due to its community-based nature—making it easy to deliver orders in bulk and with less labor required due to a reduced number of deliveries. Many other retailers in China also implemented their own community group-buying model. For instance, multicategory retailer BBK launched its community group-buying unit Xiaobu Youxian on February 27, 2020.

Companies in the US could look into implementing community group-buying models as part of their delivery strategies during the coronavirus crisis, which would reduce labor and delivery requirements as well as minimizing contact and reinforcing lockdowns, because residents of a community would not need to visit physical stores.