Core Viewpoint - Community group buying has been recognized as a significant failure in the internet industry, with major players incurring substantial losses and ultimately leading to a rapid decline in the sector's viability [1][3]. Group 1: Industry Overview - The community group buying sector experienced explosive growth in 2020, followed by a swift decline, with major companies like Meituan and Pinduoduo reporting cumulative losses exceeding 80 billion yuan from 2020 to 2024 [1][3]. - Major players such as Meituan, Pinduoduo, Alibaba, and Didi invested heavily in community group buying, with Alibaba's Taocai Cai reportedly spending at least 20 billion yuan to secure a top market position [4][3]. - The community group buying model was initially seen as a cost-effective alternative to traditional retail, with lower prices and reduced delivery costs compared to other models like front warehouses [6][8]. Group 2: Business Model Analysis - Community group buying utilized a "next-day delivery + self-pickup" model, significantly reducing operational costs compared to traditional delivery methods [6][4]. - The model aimed to streamline supply chains by minimizing intermediaries, reducing markup rates from 45% to below 20% [8]. - Despite its initial promise, the community group buying sector faced challenges such as high operational costs, limited profit margins, and regulatory scrutiny, leading to a decline in market viability [10][14]. Group 3: Market Dynamics - By mid-2022, Pinduoduo and Meituan held a combined market share of 76%, but both companies shifted focus towards reducing losses rather than aggressive competition [12][14]. - The community group buying sector's struggles were exacerbated by the rise of instant retail, which offered a more efficient and profitable alternative, leading to questions about the future viability of community group buying [22][24]. - Instant retail's market size reached 650 billion yuan in 2023, significantly overshadowing community group buying, which faced increasing competition from established players like JD and Alibaba [22][24].

Core Viewpoint - The article discusses the competitive landscape of the e-commerce sector in China, focusing on Alibaba's Taotian Group and its declining performance compared to rivals like JD.com and Pinduoduo. It highlights the challenges faced by Alibaba in maintaining its market share and profitability amidst increasing competition and changing consumer behavior [3][5][8]. Group 1: Competitive Landscape - Taotian Group is not only a key revenue driver for Alibaba but also faces significant challenges as its growth lags behind Alibaba International and Alibaba Cloud [3][5]. - The retail battle intensifies with JD.com aggressively entering the food delivery market, prompting Taotian to collaborate with Ele.me to compete [4][37]. - Alibaba's market share has been declining, from 51.3% in 2021 to an estimated 36.2% by 2026, while Pinduoduo and JD.com have gained ground [21][25]. Group 2: Financial Performance - In the fiscal year 2025, Alibaba's revenue reached 99.63 billion yuan, with a growth rate of 5.9%, falling short of the 1 trillion yuan target [10][18]. - Taotian Group contributed 44.98 billion yuan in revenue, accounting for 45% of Alibaba's total, but this represents a 1% decrease year-on-year [12]. - The revenue growth of Taotian Group was only 3%, significantly lower than the double-digit growth rates of Alibaba International and Alibaba Cloud [13][15]. Group 3: Strategic Initiatives - Alibaba plans to invest 380 billion yuan over the next three years in AI and cloud computing to address traffic concerns and enhance user experience [31][35]. - The upcoming "618" shopping festival is seen as a critical opportunity to assess the performance of the new leadership under Jiang Fan, who took charge of Alibaba's e-commerce division [3][40]. - Taotian Group has implemented changes to its merchant operating rules to improve monetization rates, which have been lower than competitors [27][30]. Group 4: Market Dynamics - The rise of live-streaming e-commerce has significantly impacted Taotian's market share, with platforms like Douyin and Kuaishou capturing a larger audience [22][24]. - The competition is expected to continue intensifying, with Alibaba's Taotian Group needing to stabilize its market position while managing costs associated with aggressive promotional strategies [26][40].