3 minute read
OUT THE BOX
NOW THAT’S A GOOD IDEA…CONSUMER TO MANUFACTURER PURCHASING
IS ‘CONSUMER-TO- MANUFACTURER’ THE NEXT BIG THING?
NEW APPS ARE GIVING SHOPPERS THE POWER TO GROUP TOGETHER TO BUY DIRECT FROMMANUFACTURERS AND SECURE REDUCED PRICING. SO, IS C2M COMING TO THE UK?
WHAT’S THE BIG IDEA?
C2M
WHICH MEANS...?
Consumer-to-manufacturer.
NOT MANUFACTURER TO CONSUMER?
Nope. The general idea is that new apps are giving shoppers the power to group together to secure reduced pricing when the buy direct from manufacturers.
IS IT ALREADY A THING?
Not in the UK. But C2M is already set to be a £4.33bn market globally by the end of next year, according to delivery firm ParcelHero.
HOW DOES IT WORK?
New apps such as Pinduoduo and Biyao are giving consumers the power to buy direct from the manufacturer and drive down prices. Users have the option to buy an item for its RSP immediately or to team up with others to get a significantly discounted price.
IS IT COMING TO THE UK?
ParcelHero seems to think so. It says C2M apps “will take Brits by storm. The company’s Head of Consumer Research, David Jinks, says C2M originated in China where it is growing at over 24% a year.
SO RETAILERS WOULD BE CUT OUT OF THE SUPPLY CHAIN?
In a word, yes. Jinks is worried that it’s another major challenge for retail. While C2M is a win-win for manufacturers and shoppers, it’s another problem that retailers could do without. Big data from C2M sites also gives manufacturers a clearer idea about the demand for their products. For consumers, the option to shop as a team slashes prices.
HOW MUCH CAN CONSUMERS SAVE?
At the moment, China’s Pinduoduo app enables shoppers to secure savings from a typical 20% reduction up to 50% off or more.
HOW DO CONSUMERS TEAM UP WITH EACH OTHER?
The shopper either starts a new team themselves by inviting friends and family via social networks or joins an already existing group purchase. A team needs to be formed within 24 hours to have the order confirmed. Once a team is formed, the purchase is approved and the product is shipped within 48 hours.
IS IT MAINLY NON-FOOD THEN?
In China, a huge range of items, including cosmetics, car accessories, tech and clothes is available – but consumers also use the apps for groceries and takeaways.
IS IT A GENUINE THREAT?
Well, Pinduoduo is the fastest-growing app in China and ParcelHero believes that a similar app would have equal success here in the UK. Initially, however, there could be a few hurdles to overcome. China has far more manufacturers than Britain, which gives the likes of Pinduoduo a wider spread of products than would be feasible in the UK. Nonetheless, Britain has a huge number of relevant companies. For example, takeaways can join the app. So, if enough friends want pizza or chicken and fries, that could set the price of a takeaway tumbling by 20% or more.
WOULD UK CONSUMERS TAKE TO IT?
Brits are well-accustomed to the concept of group buying. Many already use Groupon, KGB Deals and Wowcher. The attraction of C2M sites, however, is that they put the shopper in the driving seat. Individuals can kick off a team purchase on whatever item they want from an app, without waiting for special offers.
WHO’S USING THEM IN CHINA?
C2M sites are particularly aimed at young consumers who think of shopping as a social activity, so there are also games, free products and social activities on the Pinduoduo app. It makes an excellent retail environment. The real question is whether a home-grown version will seize the British market or whether one of the Chinese giants will move quickly to conquer the UK. Pinduoduo already has an English language site... and it has declared its ambition to become the world’s largest grocer.
