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21st Century Business Herald reporter Bai Yang reports from Beijing

Since launching the "buyer" profession in August last year and launching a new e-commerce strategy in a high-profile manner, Xiaohongshu's actions have attracted much attention from the market.

The latest data shows that compared with the beginning of 2023, the scale of Xiaohongshu buyers has increased by 6.7 times, and the number of brands cooperating with buyers has increased by 5.2 times.

At the same time, in the past year, the number of merchants with monthly sales of 5 million or more on Xiaohongshu's e-commerce has increased by 3.5 times, and the number of Xiaohongshu purchasing users has increased by 4.3 times.

The emergence of a large number of buyers and brands, as well as consumers paying with real money, all seem to prove that Xiaohongshu's e-commerce model has worked.

As one of the most competitive sectors in China's business field, e-commerce is a long-term and complex project. The three seemingly simple elements of "people, goods, and places" are not easy to do well.

At present, Xiaohongshu's appeal to the market mainly lies in its growing user base and unique culture of promoting products. This makes Xiaohongshu relatively rare among many platforms, and also becomes the key to attracting more people and goods to continue to flow in.

At the same time, the outside world is increasingly eager to know what the positioning of Xiaohongshu's e-commerce is, which will be directly related to the future growth space and upper limit of Xiaohongshu's e-commerce.

Recently, Xiaohongshu COO Conan gave a clear answer - Xiaohongshu e-commerce is "lifestyle e-commerce".

She explained, "With the diversification of lifestyles, user needs are becoming more and more segmented. What Xiaohongshu e-commerce needs to do is to help users choose and find products that match their personalized needs."

The influx of managers

In Conan's view, the key to lifestyle e-commerce is to activate the power of people in the e-commerce field, and the "people" here are not only consumers and users, but also Xiaohongshu buyers and Xiaohongshu managers.

Recently, a reporter from 21st Century Business Herald interviewed several Xiaohongshu managers. Their brands can be roughly divided into three types: the first type is the brand that originally operated graphic content on Xiaohongshu and started to do Xiaohongshu e-commerce last year; the second type is the new brand that directly chooses to deepen its roots in Xiaohongshu; the third type is the brand that has been operating on other platforms before and is re-positioning Xiaohongshu.

The manager of an original jewelry brand told the reporter that they started to operate content on Xiaohongshu very early, but their main sales platform before was Tmall. "Users often leave messages on Xiaohongshu asking for links, or take screenshots of Xiaohongshu to Tmall to find the same items. When Xiaohongshu started to do e-commerce last year, we immediately opened a store."

A home furnishing brand with nearly 20 years of history first came into contact with Xiaohongshu on the eve of last year's Double 11. The person in charge of the brand told reporters: "We basically have an omni-channel layout. Since last year, more and more people around us have been discussing Xiaohongshu, and we don't want to miss it. After joining, we found that the sales on Xiaohongshu are also good, so this year we will invest more energy in Xiaohongshu."

Data shows that the unit price of the live-streaming pen on Xiaohongshu e-commerce exceeds 500 yuan, and the return rate is relatively low. This is in contrast to the trend of "low-price" or even loss-making to gain publicity in the e-commerce industry.

OKENSHO brand manager LANCE told reporters that on Xiaohongshu, "goods bring people" rather than "people bring goods". The reason for this difference is that the essence of Xiaohongshu is a community, and the core of the community is people and content. Before the emergence of e-commerce business, Xiaohongshu users have developed the habit of reading content, comments, and private messages.

According to Gintoki, the e-commerce operations manager of Xiaohongshu, 75% of orders placed in Xiaohongshu's live streaming rooms are completed after 5 minutes, and it will take longer for some products with higher average order value. In addition, the purchase conversion rate of users who interact is 17 times that of those who do not interact.

It can be seen that Xiaohongshu's "lifestyle e-commerce" emphasizes meeting users' personalized needs, which is naturally friendly to some original brands and personalized brands. However, for some mature and traditional brands, if they want to integrate into Xiaohongshu, they need to make some changes.

In terms of platform strategy, Xiaohongshu has also put forward a clear direction - to find more managers who are in line with the platform's tone and bring them to Xiaohongshu.

How are the live broadcast and group chat effects?

In February last year, LANCE didn’t believe that users could place orders on Xiaohongshu.

"But today, the entire transaction chain of Xiaohongshu has been completely opened up, and users have begun to get used to shopping on Xiaohongshu," he said.

This is because in the past year, Xiaohongshu has opened up live broadcasting and a series of products, algorithms and other transaction infrastructure. Leon, head of Xiaohongshu's e-commerce products, said that "live broadcasting" is a closed-loop link for Xiaohongshu users from discovery to purchase.

Taking the linkage between notes and live broadcasts as an example, on the one hand, Xiaohongshu helps merchants find users who may be interested in these contents through more accurate matching; on the other hand, Xiaohongshu optimizes the identification of products in notes and the connection with live broadcast rooms, making the process from user discovery to purchase smooth.

"Group chat" is another important product of Xiaohongshu e-commerce.

In the past few years, "private domain" has become a very important part of business operations, and every brand or merchant hopes to keep the business firmly in their own hands. Before, when Xiaohongshu did not have the "group chat" function, many merchants would import users into WeChat groups, but with the launch of the "group chat" function on Xiaohongshu, private domain operations have also formed a closed loop on Xiaohongshu.

Leon said that the group chat window is both an operation field and a conversion field, which can bring real conversion and growth to businesses.

The data also proves this point: the average stay time of users who enter the live broadcast room from the group chat is as high as 47 minutes. At the same time, the orders contributed by group users account for 19%, and the same-store repurchase rate of group users in 30 days has reached 40%.

As an Internet platform with more than 300 million monthly active users and still growing, Xiaohongshu has the incremental space that the industry values ​​most.

In the past few years, many platforms have proven through practice that e-commerce is one of the most efficient ways to monetize traffic value. Now, has the e-commerce gold rush come to Xiaohongshu?

E-commerce is a long and complex project with a strong phased nature, so Xiaohongshu still has many challenges to overcome.

For example, a brand manager mentioned to reporters that she recently made a request to the platform, hoping that the official could certify the original merchants.

The manager said, "Plagiarism is very serious in the entire consumer market now. We may have spent half a year or a year on a product, but it only takes a week to plagiarize it. If the interests of original merchants cannot be effectively protected, then everyone may not be willing to create original works."

In fact, almost all e-commerce platforms have encountered this problem.

As the platform grows in size and more and more merchants emerge, how to ensure a balance between scale and quality and how to avoid bad money driving out good money are all compulsory questions that Xiaohongshu needs to answer.