Looking back at the past 2023, the technology and Internet industries have experienced another extraordinary year: the ups and downs of leading manufacturers, Pinduoduo’s market value has surpassed Alibaba, and ByteDance’s revenue is close to Tencent’s. Dynasty changes are taking place; how many Trends have come and gone, the Metaverse and new consumption have stalled, semiconductors have slowly rebounded from cycle lows, and large AI models have soared...
What new technologies/products have been born in the past year that are worth remembering? Which companies and industries are undergoing the most exciting changes? In order to answer these questions and comprehensively sort out the changes in the industry, the Value Institute has launched the "2023 Please Answer" series of year-end reviews, inviting you to review the losses and hopes of the technology and Internet industries this year, and explore the future direction.
"We know nothing about the power of the Spring Festival Gala", this is a saying widely circulated in the Internet industry. In 2024, Xiaohongshu will come to experience the power of the Spring Festival Gala. It announced on its official public account that it will officially become the notes and live broadcast sharing platform for the China Central Radio and Television Station's "2024 Spring Festival Gala". On New Year's Eve, Xiaohongshu will create a companion live broadcast "Everyone's Spring Festival Gala", allowing users to participate in the Spring Festival Gala in front of and behind the scenes.
In addition to taking advantage of community content sharing, e-commerce is also the focus of Xiaohongshu In the Internet industry, participating in the Spring Festival Gala is a sign that a large company has become a giant. Previously, giants such as Alibaba, Ant, Tencent, JD.com, Baidu, Byte, and Baidu have participated in the Spring Festival Gala in various forms. This year’s Spring Festival, JD.com will also become a giant. Spring Festival Gala interactive platform.
As a national-level gala, the huge traffic brought by the Spring Festival Gala once caused the servers of giants such as Alibaba and Tencent to crash, and red envelopes were not distributed smoothly. For Xiaohongshu, 's arrival in the Spring Festival Gala may be a milestone in its leapfrog development in 2024: from a community dominated by female users and users in first- and second-tier cities to a community for all. More importantly, participating in the Spring Festival Gala will greatly promote Xiaohongshu’s e-commerce business.
In mid-January, Xiaohongshu officially announced the “rise100 e-commerce annual list”. The platform comprehensively considers indicators such as growth rate, investment, and business methods to select the 100 merchants and 100 buyers that deserve the most attention on the site. There are many well-known brands and buyers among them, such as Zhang Xiaohui, Dong Jie, Yi Yi KK and other top Xiaohongshu celebrities are all listed.
It is worth noting that this is the first time that Xiaohongshu has released an annual e-commerce list. After the list was announced, many users and media compared it with the "Top 100 Up Owners" of Bilibili, believing that this was a sign of Xiaohongshu's accelerated commercialization and a way to package the resources of buyers and merchants on the site, opening up Means of e-commerce visibility.
It is true that e-commerce has occupied an incomparable important position in Xiaohongshu’s development strategy over the past year, and it is also another trump card for the commercialization of the platform. After years of fighting over routes, Xiaohongshu decided not to make a choice. The community and e-commerce companies have to fight with both hands.
But those issues that have troubled Xiaohongshu for many years: Can e-commerce and communities coexist, and will bringing goods affect the user experience? Can they really be solved? It’s long overdue, can Xiaohongshu e-commerce still provide meat?
Faced with these problems, Xiaohongshu cannot give a standard answer. In the past year, we could only cross the river by feeling the stones and find a balance point that satisfies all parties.
(Pictures taken by the Value Institute)
The route is no longer entangled, Xiaohongshu has entered the "dual-core" era
Xiaohongshu's development tone and core strategy in 2023 all started with the large-scale organizational structure adjustment in March. There are many team and business details involved in the adjustment of the organizational structure, but the most important changes can be summarized as follows:
upgraded the live broadcast to an independent department, which will be managed by Gintoki (Kanamy), the person in charge of Xiaohongshu community ecology, which is equivalent to Give live broadcast business and community business equal importance; Xiaohongshu coo and community department head Conan (Hua Ming) takes over the commercial product team, which means that community and commercialization are no longer incompatible, and the platform begins to accelerate its promotion Traffic monetization.After the reorganization of
, Xiaohongshu seems to have established a new strategy driven by "dual-core" live streaming e-commerce and community, and has begun to make strides towards the goal of commercialization.
However, the industry is still full of doubts about the coexistence of Xiaohongshu’s e-commerce, community, and commercialization, and they cannot guarantee that Xiaohongshu will not overturn its decision again. After all, there are lessons to be learned from the past. Xiaohongshu has changed its route many times before, and adjustments to its organizational structure are commonplace.
In 2019, Xiaohongshu connected the community and e-commerce for the first time, and upgraded the e-commerce business to the "brand account" department. It seemed that it was going to focus on e-commerce; but in January 2022, Xiaohongshu announced that it would integrate the community department and e-commerce department. The e-commerce department was merged into a new community department, and live broadcasting became a secondary business department under the new department, under the unified management of Conan.
For a long time, there seems to be an irreconcilable contradiction between the Xiaohongshu community and commercialization. The dispute over the commercialization routes of advertising and e-commerce has been going on for many years, and no good solution has been found. Now taking another brave step, where does Xiaohongshu’s determination and confidence come from?
Xiaohongshu’s core user base is extremely sticky and its acceptance of on-site transactions is also increasing. This not only dispels the platform’s concerns that the development of e-commerce may damage the community atmosphere, but also provides the basis for promoting e-commerce.
Xiaohongshu cmo Zhiheng (flower name) revealed that the post-90s generation accounted for 70% of Xiaohongshu’s 260 million monthly active users. The youthful trend of the community is the most prominent among major social media. Young users are very interested in species. Grass-fed goods are not excluded either. In addition, the frequency with which users search for shopping content, browse product information and purchase products through Xiaohongshu posts on the site is increasing.
The data doesn’t lie. Like Douyin and Kuaishou, Xiaohongshu users’ attitude towards e-commerce is changing from disgust to acceptance and even dependence.
From an objective perspective, the upward channel of the e-commerce industry is narrowing. If you don’t enter, you may never have the opportunity.
The commercialization of Xiaohongshu has been swinging between advertising and e-commerce for a long time. In comparison, the advertising business carried by the community has developed significantly more smoothly.
Although Xiaohongshu did not announce the scale of its advertising revenue last year, judging from a series of developments during the year, its ability to attract money on the grass-growing track is still outstanding. At the second will business conference of the year held in December last year, Xiaohongshu launched the slogan "Everything can be planted" to cooperate with enterprises to expand promotion channels and categories. According to participating partners, Xiaohongshu’s investment weight in non-dominant industries such as home decoration, education and training, and automobiles is constantly increasing.
It is particularly worth mentioning that the Xiaohongshu will business conference adopts an invitation system, and it is difficult to get a ticket at the offline venue. The Value Research Institute (id: quanwaicaijing) found that at that time, more than one well-known company senior executive was "begging for votes" everywhere. Learn the secrets of growing grass from Xiaohongshu up close. The commercial potential of Xiaohongshu is evident.
However, the rapid commercialization also makes Xiaohongshu anxious. At the end of last year, news of an IPO came again from Xiaohongshu, but the rumors were quickly refuted by officials. The delay in taking the step of going public is largely due to Xiaohongshu’s concern that excessive commercialization will affect the long-term development of the community. Now that the community and advertising are on the right track, the only difficulty Xiaohongshu needs to overcome is e-commerce.
Xiaohongshu’s three pillars of e-commerce: laying the foundation, recruiting buyers, and fighting for big promotions
After clarifying the strategy of betting on e-commerce, Xiaohongshu recruited troops, stockpiled ammunition, and began to fight hard. live broadcast e-commerce, short video e-commerce, and content e-commerce are essentially "interest e-commerce", and "interest" is Xiaohongshu's unique talent. Based on this, Xiaohongshu’s hobby e-commerce is also following the trend.
After sorting out the dynamics of Xiaohongshu e-commerce in the past year, it can basically be summarized into three main lines.
Of course, the first step is to lay a good foundation and improve various supporting facilities and management standards.
coo Conan revealed at the "link e-commerce partner conference" in August last year that in the past year and a half, the number of Xiaohongshu buyers and managers has increased by 27 times, the number of merchants and transaction users has increased by 10 times and 12 times respectively, and the transaction scale has increased by 10 times and 12 times respectively. The number of merchants with over 100 million yuan surged by 500%, and all data are exploding. The growth of these data is certainly a good thing for Xiaohongshu, but it will definitely make management more difficult.
If the foundation is not solid, no matter how gorgeous the superstructure is, it will ultimately be hollow and crumbling. It is very important to have good management practices. To this end, Xiaohongshu has adopted the strategy of "cultivating both internal and external" in the past year. While continuing to adjust its internal personnel structure and build a professional management team, it has also improved its rules for merchants, buyers, and content management. For example,
announced in October that it would strengthen qualification management and guide big fan accounts to display real-name information in batches; another example is to publish various e-commerce lists in an official form to provide reference for merchants and experts to select products and operations, including for the first time in November last year. The announced “focus30 brand monthly list”, as well as the aforementioned “rise100 e-commerce annual list”, etc.
(picture from Xiaohongshu)
Secondly, we will work hard on the content side to create an exclusive buyer team to create differentiated advantages.
In August last year, Xiaohongshu announced that it would invest 50 billion in traffic to support the growth of buyers. Soon after, Xiaohongshu's self-operated e-commerce businesses "Little Oasis" and "Welfare Club" announced their closure one after another, announcing a full-scale entry into the buyer model.
Xiaohongshu has always instilled in the outside world the concept that buyers are not the same as anchors, because Xiaohongshu’s buyers do not just ask people to place orders, nor do they rely on sidelines or vulgar behaviors to gain traffic. Gintoki also attended a public event in November last year and said that Xiaohongshu buyers are a win-win profession: giving full play to their own value, helping merchants reach more users, and helping consumers find suitable products.
It is true that Xiaohongshu’s traffic is not as scary as Douyin and Kuaishou, and it cannot create super anchors such as Simba and Crazy Little Yang. But Xiaohongshu also has its own advantages: the core user group is highly vertical, has distinct preferences, and has high community stickiness.
In advantageous areas such as beauty and personal care, trendy clothing, snacks and drinks, and maternal and infant pets, Xiaohongshu can rely on its differentiated users and content to incubate top buyers with platform characteristics—the buyer model may not be the upper limit. The highest, but definitely the most suitable route for Xiaohongshu at the moment.
Dong Jie, Zhang Xiaohui, and Wu Xin, the top celebrities who have become popular on Xiaohongshu this year because of their products, have very distinct personal labels: Dong Jie’s intellectual style, Zhang Xiaohui’s light luxury style, and Wu Xin’s popular “common girl” counterattack Feng, you can hardly find competing products on other platforms. The popularity of these top anchors also benefits from Xiaohongshu’s unique community atmosphere and user groups. The two are deeply bound and prosperous, which can effectively avoid the phenomenon of anchors leaving after becoming popular.
Finally, make full use of various major promotion nodes to polish your brand and attract new users, especially to strengthen your weak categories.
In last year’s 618, Double 11, Double 12 and other major promotion nodes, the level of investment in content e-commerce platforms represented by Xiaohongshu was not inferior to comprehensive e-commerce platforms such as Alibaba, JD.com, and Pinduoduo. Taking Double 11 as an example, the live streaming GMV of Xiaohongshu buyers was 3.5 times that of the same period in 2022. During this period, a number of leading live streaming rooms with single-game/cumulative GMV exceeding 100 million were born. The furniture and home appliances category, which is the focus of this Double 11, has also made a lot of progress.
According to Lei Technology’s previous report "Little Red Book is finally going to make home appliances in a big way!" 》, Xiaohongshu held an "e-commerce partner mobilization meeting" on the eve of Double 11 and released a refined operation strategy for the home appliance and household industry and a Double 11 promotion operation strategy, sounding the clarion call for attack. Earlier, Xiaohongshu had established good relationships with merchants through activities such as the "Wow! Life Home" 3C Home Appliances and Home Furnishing Business Conference and "My Extraordinary Smart Home".
(picture from Xiaohongshu)
With a three-pronged approach, Xiaohongshu e-commerce will have an extremely fulfilling 2023, and the final results are worthy of its efforts. The only problem with
now is that its opponents are also working hard, and have made greater progress than Xiaohongshu in the past year - Kuaishou e-commerce gmv is certain to break one trillion, and Douyin e-commerce gmv has soared by 80%, and it is reported that it has already caught up. Pinduoduo.
There is only so much time left on the e-commerce platform. Is there enough time left for Xiaohongshu?
Traffic dividends are gradually decreasing, and Xiaohongshu e-commerce is ushering in the most critical year.
No matter how careful the platform is, improving e-commerce supporting rules and strengthening the management of links to carry goods will more or less affect the ecology of the site.Coupled with some unfavorable changes in the general environment - the accelerated decline of traffic dividends, the platform must make a choice.
Looking at social media other than Xiaohongshu, such as Zhihu, Weibo, etc., we can see that many bloggers and mcn organizations complain that platform supervision will become increasingly strict in 2023. Especially for notes that are "suspected" to involve commercial promotion and product delivery information, the current limit is extremely severe. In the warning sent by
to the corresponding bloggers, the mainstream rhetoric is that the industry certification qualifications are incomplete, the notes contain content that is not encouraged by the community, and there is a phenomenon of transaction diversion. The methods for resolving complaints, without exception, point to obtaining relevant qualifications, using the official "Dandelion" platform for brand launch cooperation, opening official stores, etc. Xiaohongshu's attitude is very clear. It is okay to promote and bring goods, but it must be Go the official route.
’s move is exactly the same as that of social platforms such as WeChat, Zhihu, and Weibo. The purpose is to weaken the blogger’s private traffic advantage and regain the right to distribute traffic back to the platform. A closer look at is closely related to the increasingly prominent traffic anxiety of the platform. Only by taking back the initiative and deeply binding creators to the platform can sufficient traffic be mobilized to serve commercial monetization.
makes a simple metaphor. The traffic accumulated by the community can be regarded as the "oil" that supports the commercial operation of Xiaohongshu and is the most precious energy of the entire platform. When Conan attended an event in December last year, he said that as long as the direction is right, there is no need to worry too much about speed and slowness. But the reality may be more severe than imagined. Xiaohongshu, which has always regarded people with a Buddhist image since its establishment, may find it difficult to continue this slow pace.
Thankfully, traffic is not a non-renewable resource. The original flow mine is in danger of drying up. The platform can speed up the operation of the machine to achieve autonomous hematopoiesis, or discover new rich ores. A more efficient and affordable method is to improve energy utilization and realize energy recycling through artificial means.
will work hard to build a search field in the second half of the year. Leveraging new traffic and shortening transaction links through search is another big move launched by Xiaohongshu.
At the will business conference in December, Xiaohongshu’s vice president of technology, Fengdi (Hua Ming), revealed that the platform has launched a “search direct” model. According to him, as long as the brand and store launch the direct mode, users can directly jump to the store through the search field and the link under the note, or even jump to outside the site to complete the transaction.
Bagpipe believes that this is a manifestation of the further opening up of Xiaohongshu’s ecology, and it can provide a more convenient communication bridge for brands, users and buyers. Data disclosed at the conference showed that active search users accounted for nearly 90% of Xiaohongshu’s monthly active users, and 70% of monthly active users in the search field. Search has become an entrance that can leverage the most resources on the site.
For social platforms that rely on traffic, the decline in dividends is inevitable. Weibo and Zhihu have already experienced the problems encountered by Xiaohongshu, and Douyin, Kuaishou and even WeChat will not be able to avoid them in the future. But as long as the platform is smart enough and willing to put in the effort, it can still use limited resources to create greater value.
As Conan said, Xiaohongshu is indeed on the right path now, it just needs to adjust its rhythm slightly and not underestimate the challenges from the outside world. ’s victory in the Spring Festival Gala is a crucial move for Xiaohongshu e-commerce and the development of Xiaohongshu in 2024. When the time comes, can Xiaohongshu seize this great opportunity to tap into the IP value of the Spring Festival Gala? let us wait and see.
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