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Popular in China, the group buying fever is reaching Singapore

Written by Vulcan Post Published on     5 mins read

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Group buying community leaders talk about their experience in the sector.

One of the hottest tech trends in China is “community group buying,” a form of collective bargaining for items that are purchased in bulk. The country’s e-commerce giants have jumped on board this trend, fighting for a slice of the pie. The model has shown major potential to disrupt the traditional offline grocery retail sector, and it’s now hitting Singapore’s shores.

Community group buying is a form of social e-commerce—it’s a model that uses messaging apps, for example, to promote and sell products and services. People who live in the same vicinity convene to place individual orders online that are collated into group bulk purchases by a designated community group leader. The order is then delivered to a designated pick-up location and distributed.

For Winson Lee, 33, it all started during Singapore’s circuit breaker. He was craving egg tarts and wanted to order from Tai Cheong Bakery when he realized that there was a minimum order requirement, so he ended up pooling orders with his neighbors.

A creative director by day, he went on to start Group Buys SG to offer the service to more communities, with the aim to help as many people as possible order food that used to be inaccessible to them. Users have also used the platform to give back to society with charitable acts such as donating packets of rice to the needy and organizing reunion dinners for older residents.

Cheryl Guo also encountered her first group buying experience during the circuit breaker period in April last year. She was browsing Facebook when she saw a post where neighbors were buying food for their estate. Inspired by the idea, she started Sengkang Group Buy as a side hustle in May 2020.

Delia Denyse, 32, discovered group buying platform Webuy in early February 2020. The housewife organizes weekly group buys from the platform that offers a range of products from ready-to-eat meals to groceries through a WhatsApp group chat that she manages. “Group buying has allowed us to share carton deals and bring down unit prices,” she said. “Not only do we enjoy lower prices and save (money), but we share recipes and reviews in the group as well.”

Charmaine (last name not disclosed), 38, first started with small group buys back in 2019 simply to hit the minimum order quantity for free delivery with her neighbors. Her interest deepened, and she also joined Webuy as a member. The HR and admin executive now organizes group buys via WhatsApp mostly for food, although she also accepts other requests.

What it takes to be a leader

Being a community leader is no walk in the park. Cheryl, who holds a full-time day job, finds time a challenging factor. She has to spare time to consolidate orders, coordinate with vendors, check on payments, sort out orders and pack them, as well as reply to inquiries. “Sometimes, we have over 20 private messages a day,” she said. Delia describes herself as the “middleman” between the platform and buyers, who message her to request certain items.

Group Buys SG does not actively look for suppliers as many brands and businesses approach it for collaborations, such as Changi Airport Group and Guocoland. Charmaine is being approached by suppliers mostly through recommendations from neighbors and friends. She explains that being a group buy host can be fun but also very tiring. “A lot of people don’t see the administrative part behind all the group buys. And when all the orders arrive, my house becomes a warehouse,” she said.

Winson adds that Group Buys SG is a non-profit community initiative with volunteers organizing the purchases every week. “In a month, we get about 1,000 orders,” he said. “We curate our items carefully; we are very particular about food safety and quality. We also don’t want our members to suffer from group buying fatigue, hence we pace and plan our launches carefully.” He added that they do not mark up the cost of the products and don’t charge administrative fees. The delivery fees fully go to the couriers.

Sengkang Group Buy receives an average of 50 to 100 orders for a single vendor, charging each of its members a flat rate of SGD 2 (USD 1.50) per order regardless of the number of items. For those who wish to opt for doorstep delivery, they charge between SGD 4 and SGD 6 per location within the Sengkang and Punggol area. Delia says she earns a commission fee of 5–10%, depending on the cost of each item.

As for Charmaine, she is unsure of the average number of orders she has received so far but shared that the “weekly average is about SGD 2,000 (USD 1,500) to SGD 3,000 worth of sales.” She charges based on the suppliers’ pricing and doesn’t include any additional fees. “Some group buys have no earnings, but I do it anyway because my estate has nice neighbors. Not everything has to be on a profit basis,” she added.

A new Kampung spirit

Beyond scoring discounts, community group buying also offers convenience. People can skip the queues and simply wait for their order to be delivered. Winson and Delia feel that it helps foster a sense of “kampung spirit” as members get to interact and bond with each other in an increasingly disconnected world.

“Through regular interactions, our community members get to know one another better and discover more common interests, thereby forming strong social ties and a social network within the estate,” said Winson.

Delia observed that the group buying landscape in Singapore has expanded beyond basic necessities and groceries. There’s now a huge market to group buy services, hotel stays, tickets, and attractions, she noted. “As more people familiarize themselves with the concept of group buying, they tend to frequently participate and enjoy the process of community sharing through group buys,” she added.

For Winson, the boom might be over soon. “There are now many group buying platforms on Instagram and Facebook because the entry level of being a host is so low. Anyone can be a host,” he said. This doesn’t change, however, his positive take on the activity. “Members get good deals, businesses get brand exposure, and delivery personnel earn a decent income. It’s a win-win situation for everyone,” he added.

This article was originally published by Vulcan Post.

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