When group-buying models emerged as a shopping strategy in China, it quickly became a game-changer.

One of the greatest success stories of a company who has seen as astronomical growth using this model is none other than Chinese e-commerce unicorn Pinduoduo. It quickly became the country’s most popular social e-commerce platform and managed to go public just after three years of its presence.

Besides ranking third in China’s e-commerce with nine per cent online retail market share, it also grew its GMV to 73 per cent more in 2020 as compared to 2019 –despite the ongoing COVID-19 pandemic.

Inspired by the success story of the tech giant, Vincent Xue, a serial entrepreneur who previously co-founded ezbuy, decides to launch WEBUY, a social e-commerce platform that runs on a group buying model.

Launched just a year ago, WEBUY aims to develop a people-centric technology that can provide quality F&B products through a community-centred enterprise.

WEBUY also recently announced the completion of its Series A investment round led by Wavemaker Partners, followed by Centauri Fund and Global Founders Capital (GFC).

How it works

The way it works is that several people can sign up on the platform and get connected to each other to approach a vendor of a specific item to collectively bargain for a lower rate.

People who live close to each other can purchase F&B products such as food and groceries as a group, collect them at designated locations and in the process, save money through bulk purchase and low delivery costs.

Also Read: Startup of the Month, April: Social commerce platform TokoTalk

This results in a win-win situation for both parties as shopper need to pay less for an item and vendors can benefit by selling more items to shoppers without worrying about logistics.

Growth

According to Xue, the app saw over 20,000 downloads within just two months of its launch and due to its quick growth, the platform has expanded into Malaysia and Indonesia.

“We believe that the market size for community group-buy models in Southeast Asia will reach over US$10 billion within 10 years. China’s overall community group buy model market size is estimated to expand to over CNY100 billion (US$15.4 billion) in 2021, which is estimated to account for around 20 per cent of total online grocery retail,” he says.

“In the Southeast Asian market, as the e-commerce penetration rate for product and service is still hovering low at about 10-15 per cent, while China’s is over 40 per cent, this will offer an opportunity for community group buy models to enter into segments other than grocery,” he further adds.

Backed by Rocket Internet, the startup claims to have grown five times and is currently supporting 3,000 group leaders, who collate and purchase orders for over 100,000 consumers across its three markets.

Future plans

The startup is planning to further grow its footprint in Southeast Asia by expanding to Vietnam and the Philippines this year.

“We plan to recruit a batch of global venture builders and send them to different countries to kick start the business. But aside from that, we are also planning to invest US$1 million into our tech team to create a better user experience for all our customers and group leaders,” he shares with e27.

Also Read: Is Southeast Asia ready to give birth to interactive e-commerce platforms like Pinduoduo?

Generally, group-buying models are popular with price-conscious consumers who are but not limited to lower-medium income groups.

Taking that into consideration, while Singapore may not be that big of a market for WEBUY, countries such as Vietnam and Indonesia can create a greater possibility because of its population size and community-focussed demographic.

But will it create that big of an impact that Pinduoduo created in China within only a few years? Only time will tell.

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Image Credit: WEBUY

 

 

 

 

 

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