Why social group buy sites are the dawn of Universal Capitalism

There was nothing that changed how human society works so drastically more than capitalism since it was first brought into light formally by Adam Smith in the 18th century.

Capitalism works.

Why does it work? Because it is the only system that is very much based on an individual's human nature than any other systems in the past. It is the system that encourages risk-taking and innovation. And because of its profit-driven nature, it keeps evolving.

Capitalism has a fatal flaw.

Like all other things, capitalism is not perfect. The very nature that drives its success is also its curse. That is, in a free fall, capital keeps aggregating for ones who already possess it while depriving those who don’t or possess little of it. Simply put, the rich get richer, while the poor get poorer. To prevent societies from degenerating into chaos because of this, measures have been designed and implemented by governments with much success in the past. However, more and more challenges pop out as the world advance into new generations of technology at an accelerated pace. They pop out so fast, it is getting more and more difficult for governments to keep up. We need something better.

What if there is a solution from within capitalism itself?

With the rapid development of information technology in the past two decades, a new version of capitalism is calling upon us. In today’s world, more and more clearly, we see what it is and how it should work. That is what we called Universal Capitalism.

So what is Universal Capitalism?

Universal capitalism is no different than traditional capitalism, except for one thing, its definition of capital.

According to Inc.

Capital is the money or wealth needed to produce goods and services. In the most basic terms, it is money.

This definition of capital, let’s call it special capital because it is very specifically defined as money. In a system like this, there is a very clear distinction between who is capitalist and who is not. People who possess a sum of money big enough to earn income by investing are capitalists. Those who don’t possess such a big sum of money and have to work jobs to earn income are not capitalists, which also happens to be the absolute majority of the population in any society.

In Universal Capitalism, the definition of capital is much broader. That is

Any resources that can generate monetary value in the short or long term by any parties are capital. This includes money and resources such as time, personal image, data, talent, influence, etc.

What does the new definition of capital mean for us?

We are living in a digital age where the money itself will be fully digitalized soon. The flow of information has never been so smooth and fluent in human history. This unlocks opportunities to generate wealth in ways never imagined before. Any person can become a known brand in a very short period of time without heavy or any capital invested on social medias like Instagram or tik tok. Or one can refer friends to a business with an affiliate link to earn a commission. If we look at wealth from a broader perspective, then group buy is a perfect example of universal capitalism. When buyers leverage their resources of acquaintances or their peers in a community to make a purchase together, their negotiating power is largely increased against the merchant, or producer who is on the supply side of the term table.

Why social group buy?

In a nutshell, group by is the instrument for everyday people to leverage their own resources as the capital to generate wealth in the form of lower cost in the acquisition of produced goods.

Take a couple of examples, Pinduoduo, the Chinese social commerce app launched in 2015, allows its users to “team purchase” with others to reach extremely low discounts on products of almost all categories. While Lolovee, a startup from Canada, moves a step further from Pinduoduo’s model, which allows its users to negotiate with merchants or producers directly to reach a deal that makes all parties happy.

Either Pinduoduo or Lolovee, the equation of demand and supply is simple, by leveraging social group buy, consumers enjoy a much lower cost than the market average due to its order size, while merchants or producers can mitigate their risks of inventory and make quicker their cash flow. More wealth is generated from the transaction because the demand side acquires goods with lower cost while the supply-side gains stronger risk-taking capacity with less chance of being at loss.

Universal capitalism is the future, especially once artificial intelligence and automation take over most of the low-skilled jobs and the UBI (universal basic income) is introduced. And social group buy activity is the wavefront that will be followed by a series of more thorough social movements and system evolutions, and hence “social group buy sites are the dawn of Universal Capitalism”.