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author: kyra

editor: ray

as a fashion expert, lisa uses xiaohongshu as her "electronic bestie" during her growth. "if i want to buy clothes, i search on xiaohongshu. if i don't know what to eat for dinner, i search on xiaohongshu. recently, i've been studying mbti on xiaohongshu."

"i really can't live without xiaohongshu. now i want to search on xiaohongshu before doing anything." lisa excitedly shared with her colleagues.

as xiaohongshu coo conan once said, "xiaohongshu has become the entry point for ordinary people to search for their lives."

according to data released at the 2023 will business conference, 60% of users conduct high-frequency searches on xiaohongshu every day, with an average daily search volume of nearly 300 million times.

with its strong user stickiness, xiaohongshu is increasingly becoming the second "home" for many young people in the internet world. however, before this, xiaohongshu also experienced transformation iterations and difficulties again and again.

xiaohongshu was founded in 2013 and is one of the few internet unicorn companies cultivated locally in shanghai.

the original xiaohongshu was just a pdf document called “xiaohongshu overseas shopping guide”.

as the demand for cross-border shopping grew at the time, this “little red book” quickly became popular, with more than tens of thousands of downloads in just one month.

however, no one knew at the time that this document would become a super unicorn worth 30 billion us dollars ten years later.

in december 2013, xiaohongshu officially launched the overseas shopping sharing community "mobile app", inviting authors from all over the world to share their overseas shopping experiences. with good content as the foundation and social demand, xiaohongshu quickly accumulated a large number of loyal fans. in august 2014, xiaohongshu had millions of users, most of whom were women. at that time, the domestic e-commerce industry was developing in full swing. faced with the difficulty of traffic monetization, xiaohongshu decided to transform into a cross-border e-commerce.

relying on a large user base, xiaohongshu successfully established its own bonded warehouse in zhengzhou in 2015, and in shenzhen in june of the same year.

at that time, xiaohongshu envisioned that "content and e-commerce" would be carried out simultaneously, but the reality was not the case. in 2016, xiaohongshu's cross-border e-commerce market share was only 6.5%, far behind the major competing platforms in the same period.

at that time, due to xiaohongshu's lack of relevant e-commerce experience, problems often occurred in product procurement and the authenticity of goods, and complaints about counterfeit goods occurred frequently. based on these problems, xiaohongshu shifted its focus back to community ecosystem construction.

although it lost something in one place, it gained something in another. thanks to the development of domestic internet technology at that time, xiaohongshu began to shift its content from manual operation to machine distribution. this move can be seen as xiaohongshu's "industrial revolution", which enabled it to "soar" on the road of high-quality content.

in 2017, xiaohongshu used the celebrity effect to break out of its circle and introduced lin yun, wu jinyan, qi wei, zhang yuqi and others. in june 2018, xiaohongshu's monthly active users (mau) exceeded 50 million; in july 2020, xiaohongshu's mau exceeded 100 million; 15 months later, mau exceeded 200 million.

at that time, while growing rapidly, xiaohongshu also attracted the attention of capital and received a total of us$400 million in financing from the two giants tencent and alibaba.

the expansion of the user base also means the diversification of the audience groups, but xiaohongshu has always regarded female users as the top priority of its operations. among them are confused students who are about to graduate from their senior year, working girls who have been working in beijing for 10 years with a monthly salary of less than 6,000 yuan, and digital nomads who travel around the world...

these users seem to have one thing in common: their love for the details of life is almost obsessive. their activeness not only enriches the community content, but also promotes xiaohongshu to become an all-round life sharing sanctuary. as of 2023, xiaohongshu has more than 350 million users, of which women account for more than 70%.

unlike other platforms, xiaohongshu has a strong long-tail demand, and amateurs can also gain greater attention through content, and their commercial value is higher than that of kocs (key consumers) on other platforms.

in the past 11 years, xiaohongshu has evolved from a simple pdf shopping guide to a vibrant content community, and then from a popular tool for recommending products to a comprehensive lifestyle community. however, behind these constant changes, the growth "crisis" and the "confusion" of direction have always been with it.

since 2024, xiaohongshu's organizational structure has changed frequently, with obvious personnel shocks.

the turnover rate has always been a hot topic at xiaohongshu. a media report previously stated that "the average length of service for xiaohongshu employees is only about half a year, and those who have worked for more than two years can be called 'living fossils'. many people leave after only three or four months."

in the first quarter of this year, he tong (shu ming), the head of community content at xiaohongshu, resigned because the daily active user growth of xiaohongshu did not meet expectations.

the organizational structure of the e-commerce operation department of xiaohongshu's e-commerce secondary department has been adjusted at the end of june. according to media reports, after the adjustment, the e-commerce operation team is no longer managed by yinshi (shu ming) alone, but is jointly managed by multiple persons in charge. specifically, the industry merchant group is managed by yinshi, the buyer group is managed by meixian (shu ming), and the newly established ka (key account, key customer) group is managed by xuanshuang (shu ming), who is also the person in charge of the commercialization of meisuifu.

dong zhang (shu ming) integrates the e-commerce strategy middle platform with the strategy middle platform, performance middle platform, and strategic team of the commercialization department to form a grand integration of business and e-commerce middle platforms.

on august 16, xiaohongshu announced internally that it would simplify its management hierarchy, mainly including "no longer setting up r-level positions", "simplifying management hierarchy", and "appointment system for leaders at all levels".

staff turnover does not only occur among current employees. currently, there are still many xiaohongshu positions listed on boss direct recruitment.

behind the frequent personnel adjustments, xiaohongshu’s "commercialization" problems are highlighted.

on the one hand, xiaohongshu started later than the e-commerce field, and on the other hand, as a content community, it attaches great importance to maintaining the community atmosphere. therefore, in the process of seeking a balance between content and commercialization, some efficiency was sacrificed.

it is reported that as of the end of 2023, xiaohongshu had 312 million monthly active users, with revenue of us$3.7 billion (approximately rmb 27 billion); net profit was us$500 million, marking the first time it has achieved profitability.

but compared with other platforms, xiaohongshu is not on the same scale as them. data shows that alibaba's revenue in fiscal year 2023 will be 868.687 billion yuan, while jd.com, pinduoduo and kuaishou will be 1084.7 billion yuan, 247.6 billion yuan and 113.47 billion yuan respectively in 2023.

like douyin, xiaohongshu is also leveraging user engagement to expand into e-commerce and other services. but one of the most obvious features of xiaohongshu’s commercialization is “planting grass”: using content to stimulate users’ interest in a certain product so that users will buy it in the near future.

in reality, although many users do become interested in a product and make purchasing decisions through posts on xiaohongshu, their final transaction platform is often not on xiaohongshu, but on established e-commerce platforms such as alibaba's taobao and tmall, and jd.com.

for xiaohongshu users, the shopping suggestions on the platform are priceless, but after reading the suggestions, they will turn to other places outside xiaohongshu to look for cheaper prices - even though xiaohongshu, like douyin and kuaishou, requires suppliers to provide prices as low as (or even not lower than) other platforms.

according to statistics, at least 20% of the traffic of taobao and tmall comes from xiaohongshu.

although xiaohongshu has about half of douyin's monthly active users, its total revenue is less than one twentieth of douyin's.

how to make a community that takes sharing of high-quality content as its core concept also have the value of an e-commerce platform? this seemingly smooth business model is actually full of difficulties in actual operation.

in fact, in the years when xiaohongshu has been developing rapidly, the continuous growth of users and the fluctuation of operation strategy have also begun to lead to uneven quality of content on the platform.

in 2019, the xiaohongshu team discovered that there were some content on the platform that had poor art style and was eye-catching but had traffic; in a nationwide survey in 2020, some users reported that a large number of merchants' advertising made them doubt the authenticity of xiaohongshu's recommendations.

therefore, in april 2021, xiaohongshu released a community convention to clarify what content the platform advocates and opposes, and to strengthen constraints on the xiaohongshu community environment.

for example: avoid using exaggeration, curiosity and other means to attract users to click; encourage ordinary people to speak and share; interact based on content. generally speaking, appearance, figure and age are not necessary elements for discussion; avoid showing off your spending power that exceeds that of ordinary people, etc.

one of the biggest attractions of xiaohongshu is its active community atmosphere and high-quality content. how to maintain the platform's consistent tone and principles in the process of commercialization is an inevitable challenge facing xiaohongshu.

for today's internet companies, "growth" is an eternal topic, and the ultimate goal of growth is to maximize commercial returns.

xiaohongshu is now faced with the choice of whether to develop strong content or strong business. go left or go right? this is the question.

exquisite content is the root of xiaohongshu's traffic value, and the other side of "exquisiteness" is the "niche" of users. however, as a life community platform with more than 100 million daily active users, its commercial value cannot be underestimated. as "the user's preferred life decision search platform", xiaohongshu has obvious advantages in commercial realization among many content community peers.

data shows that as of september 2023, 50% of xiaohongshu users are from first- and second-tier cities. 50% of users are born after 1995. this means that the platform has a large concentration of high-net-worth customers with strong spending power, and merchants can sell high-priced products.

according to online information, 60% of xiaohongshu users will actively search, and the platform's average daily search query volume is nearly 300 million times. six out of ten users who enter xiaohongshu will actively look for the content and products they need in the search box. if the platform commercializes the search entrance, search keywords, hot search list, etc. and implants certain promotional content, this is the business model that baidu, weibo, etc. have opened up.

the reason why xiaohongshu can attract a large number of young users is due to its high-quality ugc content output and relatively "hidden" and comfortable commercial experience. in view of this, it is particularly important for xiaohongshu to maintain a good community atmosphere and continuously output good content.

of course, the commercialization process is bound to be accompanied by the "consumption" of user experience. as mentioned at the beginning of this paragraph, how to balance the relationship between the two and make the right choice at the right time is the top priority of xiaohongshu's "second half".

frankly speaking, in the field of content seeding, no one can recreate a xiaohongshu. the creation of a community atmosphere and sharing experience is the key to xiaohongshu becoming xiaohongshu.

at present, xiaohongshu has a significant "pillar" effect of top anchors. following dong jie and zhang xiaohui, in march this year, the well-known host wu xin started her second official live broadcast on xiaohongshu, which lasted for 10 hours and the gmv exceeded 35 million.

the advantage of xiaohongshu is that the community's "grass-planting gene" is constantly strengthened. users come to xiaohongshu for very clear needs, that is, to find professional content; and "grass-planting" itself is the scene closest to money. users can place orders after reading reviews, which is a huge commercial closed loop. however, how to make the closed loop not become a barrier and burden to isolate users, and how to make the community atmosphere not be dragged down by the "stench of money"? the choice of commercialization is naturally not an easy thing.

"tidal business review" believes that xiaohongshu does not need to impact all-category comprehensive e-commerce like other platforms. it only needs to return to its own strengths and try to carry out commercial practices in small steps and fast pace in the "small and beautiful" content sharing community track.

left or right? it seems that when we make a decision, we always inertialy hope for a definite answer. however, the young 11-year-old xiaohongshu stayed where it was before thinking clearly, and moved forward or backward in time with the changes of the "waves", which may be another wisdom of business choice.

just as xiaohongshu became popular 11 years ago, why can’t xiaohongshu continue to be xiaohongshu?

"i love xiaohongshu so much. as soon as i open it, i see posts that interest me. it is also much more convenient to buy things on it now. sf express will pick up the goods at my door for returns and exchanges. recently, i have placed orders directly after being attracted by xiaohongshu." lisa excitedly showed her friends the clothes she had just bought.

you see, that's how business works.