After a whole year of chaos, even the “nine no” policy in December 2020, the enthusiasm of capital and giants for community group buying has not declined. The new price war starts before the Spring Festival, the battle for the head of the team continues, and the construction of warehousing / logistics / supply chain is in full swing.
But what I never thought was that the “community group buying” that meituan, didi and pinduoduo are now crazily raising in China is actually “the rest of the game” in Japan many years ago.
Compared with China’s capital narrative, the evolution of community group buying in Japan for decades is a complex history of consumer movement, the realization of women’s self-worth, the development of circulation industry and the change of fresh agricultural products supply chain.
329 bottles of milk and Japanese housewives’ Union
Community group buying in Japan started in 1955.
In 1955, the 10th year after its defeat and surrender, Japan had completely come out of the shadow of the war, its main economic indicators had returned to the pre war level, and entered a period known as “rapid development” by later generations. The May 5 system made the LDP a ruling party for a long time and firmly controlled Japan’s politics and economy, which led Japan to take an economic priority and created a miracle in Japan.
Shibuya District of Tokyo in 1955
But it was in 1955, when everything was booming, that babies around Japan were listless, irritable, diarrhea, fever, vomiting, and blackened skin. What these babies had in common was that they all drank the milk powder produced by Morinaga, the leader of Japan’s dairy industry. According to historical data, at that time, 13000 children in Japan had symptoms and 130 infants died.
After all, it turned out that Senyong used sodium phosphate as a milk stabilizer in the process of processing milk powder, while the inferior sodium phosphate used by Senyong’s processing plant in Tokushima was mixed with arsenic, commonly known as arsenic, which would seriously damage the baby’s nerves and internal organs. Behind this extreme case is the extreme chaos of the Japanese dairy market in the 1950s and 1960s.
In addition to toxic milk powder, two-thirds of the milk sold in the Japanese market at that time was synthetic milk drinks such as skimmed milk powder. Under the praise of businessmen, such processed milk with low nutritional content and much higher price than ordinary milk occupied the market.
In order to buy really cheap and healthy milk, in 1965, a man named Iwane bangxiong knocked on his neighbor’s door one by one. At his invitation, about 200 households collectively ordered 329 bottles of milk, starting a story about “co purchase”.
The small organization that Iwane bangxiong and his neighbors intended to “order milk collectively” gradually developed into a “Life Club” composed of housewives. In 1968, the life club was officially incorporated into the Japanese life collaboration group (referred to as the “association”), and began to develop on a large scale.
According to its official website data, the number of members of the National Association of students in 2019 is 29.61 million, and the family joining rate of the regional association of students is 38.4%.
In other words, nearly one-third of Japanese families are members of the association of students, which may be the penetration ratio that meituan, didi and other companies that are heavily committed to community group buying dream of. However, different from the community group buying dominated by domestic e-commerce, the Japan Association of health is an organization initiated entirely by consumers like Iwane bangxiong, which is also the largest NGO in Japan.
The most representative mode of the association is the “collective order milk” type of joint purchase.
The joint purchase takes “class” as the unit and is generally a group composed of five or six families in the neighborhood. A monitor will be elected in the class organization. At the earliest stage, the monitor is responsible for collecting the order form and payment for goods of each family and giving them to the association of students. The association of students will deliver the goods to the class after a week, and then the monitor will distribute them.
With the development of technology, this original mode is gradually changing to a more efficient direction. Since the 1980s, the application of OCR document recognition, automatic transfer of payment, automatic classification of distribution center and mechanization of packaging has greatly improved the convenience of joint purchase.
In the Chinese market decades later, the concept of “class” has been expanded to “community”, and “monitor” has become “team leader”, and technology has been further upgraded and transferred online. But the core idea and play is not too different.
The difference is that with the rise of group buying outlets in domestic communities, enterprises’ insight into consumer demand is top-down. The development and evolution of the Japanese Association of health is the active satisfaction of consumers to their own needs, which is from the bottom up.
Looking ahead, what the association imitates is actually a consumer cooperative organized by workers in the Rochedale area in the 1840s. The origin of the Japanese Association of students can be traced back to 1879, but it was not until after World War II that the Japanese government formulated the consumer life synergy combination law in 1948 that the association of students really gained the legal status.
The development and growth of the association of students was after the 1960s.
At that time, Japan experienced a difficult period after World War II, and then in order to stimulate rapid economic development, “mass production, mass consumption” became the trend of the times. Under such a radical development strategy, some enterprises ignore product quality because they pursue profits too much, especially for fresh food. Frequent food safety problems have aroused the antipathy of consumers.
The chaotic dairy market mentioned at the beginning was a cross-section of the market situation at that time. This is also the biggest incentive for consumers to intervene in market activities through their own power. Life club was born in this background, and gradually from the field of consumption to the field of environmental protection and politics.
Taking this “329 bottles of milk” as an opportunity, the members of the life club gathered together to launch a “Life Movement” which has caused great waves in Japanese society. Members call themselves not “consumers” but “people of life”, not “commodities” but “consumer materials”. They advocate a healthy and fair consumption concept and lifestyle, and oppose the social atmosphere of extravagance and waste formed by blindly pursuing economic development.
Up to now, the association not only plays a role in the consumption scene, but also undertakes the responsibility of life mutual assistance such as elderly care. This is also a huge difference between the Japanese Association of students and the domestic profit-making community group buying platform in terms of radiation scope and ability.
In addition, another necessary condition for the birth of the “co purchase” model is the emergence of the first group of middle-class housewives in Japanese society.
It is also because of Japan’s rapid economic growth in the 1960s and the gender division of labor pattern of “men dominating the outside world and women dominating the inside” in Japanese society, which gave birth to a group of full-time housewives. Housewives with time and economic foundation, in order to pursue the realization of self-worth, have become the main force in the development of the association.
The association of students led by housewives has the same function as the community group buying platform, but it is more like a social experiment of “looking at the world from the kitchen”. With the changes of the background of the times and the social structure of Japan, the mode of “joint purchase” of the association of students is constantly adjusting.
New demand, new model
Although the gentle and virtuous full-time housewives in Japanese dramas are still common today, with a series of measures to promote women’s employment after the 1980s, more and more wives and mothers choose to go out of the house and start working.
In addition, in the past few decades, there have been two obvious trends in Japanese Society: the emergence of one-man families, the take-off of single economy, and the increasingly serious aging.
The new social structure reduces the applicability of the joint purchase mode based on the “class” organization, and the product supply mode of the Japanese Association of health has also been greatly adjusted. This can also provide some reference for the future development of the domestic community group purchase mode. After all, the increase of single population and aging has become an unavoidable problem in China.
From the point of view of the sales end, the product supply of Japan Association of health gradually broke the “class” organization mode and adjusted to individual distribution.
The turning point occurred in 1995.
Before that, the association of health was actually based on store business, but with the birth of life club, the home distribution business was welcomed by more consumers, and gradually surpassed the store business and became the main distribution mode of the association in 1995. At the same time, in this year, because some professional women could not use the class to organize distribution, the capital circle Association for health group launched a personal distribution business for this part of the population, and then became very popular.
By 2010, the individual purchase business in the residential distribution business has surpassed the joint purchase business and become the most important profit source of the association. However, even in the personal distribution mode, the Japanese Association of health attaches great importance to the communication with its members. For example, the association of health requires that when delivering goods, the delivery personnel should chat with the members for two minutes, and then take out the next week’s catalog and introduce the recommended goods.
From the perspective of supply side, the purchase channel of Japan Association of health has gradually changed from the traditional wholesale market to direct production. In the industry direct mode, the association can give full play to the quality and safety supervision ability of the upstream, which is also the source of Japanese consumers’ sense of trust in the association. As an organization initiated by consumers themselves, the Association for health really closed down Japan’s governance of food safety issues by strengthening the control, making public testing, and promoting legislation.
However, the Association for health also had a “rollover” time. In 2002, the Association for health, due to the negligence of the production direct management, sold the broilers raised with chemical feed, which seriously damaged the reputation of the Association for health. This also made the association of students have to reduce the proportion of production direct mode in that period.
Generally speaking, the main direction of the fresh agricultural products supply mode of the association has always been to adjust from “wholesale market purchase joint purchase” to “production direct purchase individual distribution”. In addition, what is more worth mentioning is the independent brand construction of the association.
Although it is an NGO initiated by consumers, when participating in market activities, the association still embodies the identity of a fresh agricultural products retailer, which also means that the association has always needed to compete with ITO yanghuatang, AEON, Darong and other supermarkets. In the 1990s, the shrinkage of the store business of the Association for health was partly due to the fact that the stores operated by the Association for health had no additional competitiveness compared with other supermarkets.
In fact, behind the establishment of independent food brands by the association is the general trend of Japanese chain stores to establish independent brands. For example, ITO yanghuatang’s “delicious selection”, AEON group’s “MAS value” and Darong’s “saving”. For Chinese consumers, the most recognized products should be the self-produced products in ITO yanghuatang’s 7-11 convenience stores.
7-11’s independent brand, to a certain extent, helped to open the second curve of 7-11 when the growth rate slowed down at that time; similarly, for the association of students, independent brand is also a trump card to maintain its competitiveness.
Compared with other brands, the uniqueness of the association lies in consumers’ trust in the safety of its products. Among the independent brands of the association, the “Co · OP” developed by the association is the most famous. In the production process, all information related to quality, production methods, circulation means, etc. are made public by the association to realize the whole process supervision from production to circulation.
After the rise of group buying in Chinese communities, some people have asked whether the Chinese e-commerce model can be replicated in Japan to transform the group buying model of fresh agricultural products in Japanese communities established by the association of health.
Professor Hong Shihong of Osaka University in Japan gave a negative answer. In a video, he explained that Japan’s laws and traditional circulation business habits have limited the development of e-commerce in the traditional food market. Agricultural products are generally circulated through the “agricultural association” (agricultural cooperative combination), and the commercial community acts as an intermediary to undertake certain supervision and crisis handling functions. It is difficult for e-commerce to obtain the opportunity to purchase a large number of fresh food and ingredients. Therefore, the current domestic food e-commerce in Japan is mainly direct selling or imported food.
According to Professor Hong, there is little hope that the e-commerce model of community group buying will be popularized in Japan. Although the association of students undertakes the function of community group buying to a certain extent, its birth background, development process and functional dimensions are quite different from those of China’s community group buying platform.
Community group buying, which is discussed as an economic topic in China, seems to be more like a sociological topic in Japan.
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