JD Pinpin has quietly launched physical stores in Beijing. On August 17, field visits revealed that JD Pinpin has established multiple locations in Fangshan district. According to informed sources, JD Pinpin shares certain supply chain resources with the discount supermarket division.

Community group buying remains a low-margin business, with platforms seeking to reduce costs across every segment from warehousing and distribution to retail outlets. Achieving supply chain synergy across supermarkets, discount stores, and community group buying operations within the same region represents an effective cost optimization strategy.

For community group buying operations to remain viable, maintaining gross margins around 20% is critical, while absorbing average logistics fulfillment costs of 10%. JD.com must develop new solutions to continue expanding its user base in lower-tier markets.

**Expanding into Fangshan Market**

An increasing number of community retail spaces now display JD Pinpin signage. At Changjing Xinyuan residential complex in Fangshan, JD Pinpin shares storefront space with ZTO Express's Tuxi Life Station, operating under the "JD Pinpin Group Buying Store" banner. The interior features refrigeration units and shelving to store frozen and fresh products ordered by consumers.

According to station staff, customers typically receive their group-ordered items around 9 AM the day after placing orders. In April, JD Pinpin launched its first store in Fangshan, offering over ten seasonal products through its direct-from-farm program, including lychees and watermelons.

An internal JD Pinpin source, Li Yong (pseudonym), revealed that prospective store partners must provide approximately 10 square meters of interior space for refrigeration units and shelving, with locations near residential complex entrances. The residential community must have at least 600 households to ensure profitable operations for group leaders, who earn approximately 5% commission.

Currently, JD Pinpin stores offer online purchasing across categories including fruits and vegetables, meat and dairy, daily necessities, and cleaning products, focusing on essential consumer goods. The platform has also integrated JD's private labels including JD Seven Fresh, JD Fresh Workshop, JD Made, and JD Joy brands, with JD Joy targeting home and daily-use products while JD Fresh Workshop specializes in produce, meat, dairy, and cooking oils.

Pricing remains competitive with Duo Duo Maicai, with certain standard products like 1KG Haitian Premium Oyster Sauce, 1.8KG Vinda Super Tough 4-Layer Tissue, and 12-bottle Nongfu Spring water packs priced approximately 2 yuan lower than competitors.

Beyond the partnership store model, JD Pinpin provides home delivery services in other Beijing areas. Li Yong indicated that the platform plans continued expansion in Beijing and Zhuzhou, Hebei, with Beijing expansion focusing on areas outside the Fifth Ring Road including Daxing and Miyun districts.

Currently, JD Pinpin's team leader recruitment covers Hefei in Anhui, Suqian in Jiangsu, Beijing, and Zhuzhou in Hebei.

**Supply Chain Integration**

June 2023 marked a crucial turning point for JD.com's community group buying operations. The company established an Innovation Retail Division, consolidating Pinpin, Seven Fresh, and other businesses into an independent unit led by Yan Xiaobing, formerly head of JD International, reporting directly to JD.com CEO Xu Ran.

Prior to this management restructuring, JD's JD Joy business targeting lower-tier markets had underperformed. JD Joy Pinpin, launched in 2021, was scaled back within a year. By June 2022, the JD Joy business group was disbanded. Seven Fresh supermarket, operating for over five years, remained limited to Beijing-Tianjin-Hebei and Greater Bay Area markets.

Industry observers viewed these adjustments as JD.com's commitment to increasing fresh retail investment, strengthening fresh category supply chain capabilities, and improving product structure to address diverse consumer segment demands.

Under Yan Xiaobing's leadership, JD Joy Pinpin was rebranded as JD Pinpin with an upgraded brand identity, initially piloting new business models in Anhui province. Li Yong noted that beyond online group buying, JD Pinpin added offline direct-from-farm services, providing merchants with wholesale pricing for produce and meat, allowing in-store retail sales.

Team leaders now earn both online commissions and offline sales supplements, designed to enhance motivation and retention rates. However, sustaining low-price community group buying operations without substantial capital investment requires reducing supply chain costs significantly.

"JD Pinpin shares supply chain resources with Huaguan discount supermarkets and will integrate JD discount supermarket resources in the future," Li Yong stated.

JD's discount supermarket opened its first Zhuzhou location on August 16, featuring approximately 5,000 SKUs. JD Pinpin's integrated brands including JD Seven Fresh and JD Fresh Workshop occupy prominent display positions within the supermarket.

Market coverage between JD Pinpin and discount supermarket operations shows geographical overlap. JD Huaguan discount supermarkets opened two Fangshan locations in June and December 2023. In August, JD discount supermarkets launched in Zhuzhou and Suqian, with future expansion planned across Hebei, Tianjin, Anhui, Jiangsu, and Shandong provinces.

A JD Pinpin representative stated that the enhanced platform leverages JD.com's accumulated capabilities in global brand partnerships, industrial belt sourcing, origin-direct procurement, and private label development to enrich product offerings, streamline distribution channels, reduce costs, and provide community users with consistently low-priced quality products.

**20% Gross Margin Threshold**

Community group buying presents complex operational challenges. In June, Meituan scaled back Meituan Select operations, maintaining presence only in Guangxi, Guangdong, and Zhejiang markets. Duo Duo Maicai remains the dominant market player.

Competitor market exits have driven order volume increases for Duo Duo Maicai, though multiple team leaders report unchanged commission structures. Additionally, e-commerce companies are adjusting business strategies. Duo Duo Maicai has piloted "free home delivery for orders over 39 yuan" in Shanghai, covering milk, fruits, rice, and flour, with next-day home delivery service.

Meituan has pivoted to flash warehouses, using franchise models in lower-tier markets for beauty, pet supplies, ingredient (Caida), and fruit warehouses.

Senior new retail industry professional Wang Jin (pseudonym) explained that community group buying's financial model requires gross margins around 20% for viability, but logistics fulfillment costs typically consume 10%. Platforms must also provide subsidies to both merchant partners and consumers, resulting in minimal merchant subsidies that sometimes fail to cover basic costs like plastic bags.

Wang Jin recalled that when Meituan entered community group buying, it initially benchmarked against Xingsheng Youxuan's business model. During the subsequent "hundred-team battle" period, companies focused on competitive benchmarking across market expansion, network coverage, and B2B and B2C market subsidies.

He attributes Xingsheng Youxuan's survival to effective supply chain integration with franchise store operations, eliminating warehousing and fulfillment costs and explaining its regional focus strategy.

Wang Jin noted that beyond companies like Xingsheng Youxuan, some wholesale markets partner with stay-at-home mothers in community group buying, using micro-commerce approaches with popular product strategies to attract customers while avoiding store and delivery costs.

For major internet companies, the substantial investments of previous years are unlikely to return, with community group buying business models remaining challenging.

"JD Pinpin can convert lower-tier market consumers into customer assets by providing low-cost, diverse products and building strong relationships, helping JD.com establish stable user bases in these markets," noted Zhao Zhenying, researcher at the National Engineering Laboratory for E-Commerce Transaction Technology.

With community group buying capital enthusiasm having cooled, Zhao Zhenying believes JD Pinpin should select capable team leaders and provide training in user operations and community management to maintain group activity levels and improve user retention and conversion rates.

From the consumer perspective, JD Pinpin should optimize product categories and inventory management based on community residents' consumption habits and preferences, providing products better aligned with customer needs while building valuable knowledge-sharing systems and reward mechanisms to attract new community members.