Recently, the e-commerce industry has entered another phase of competition for market share. A notable signal is that, following a slowdown in growth, several major e-commerce platforms have readjusted their primary assessment goals from "low prices" back to "GMV" (Gross Merchandise Volume).

Prior to the start of this new round of fierce competition, RED, as a latecomer in the e-commerce industry, has also accelerated its commercialization process. On July 24, RED held the 2024 LINK E-commerce Partner Conference and Live Streaming Partner Conference, introducing a new concept of lifestyle e-commerce and announcing a series of support plans. From this definition, it is evident that in an era of extreme efficiency pursuits, RED aims to differentiate itself through its small yet exquisite approach.

Externally, this is an opportune moment for an offensive – some brands are struggling on other e-commerce platforms, while RED, as a new platform, still offers traffic dividends and represents one of the few areas of growth.

During this year's 618 shopping festival, when mainstream e-commerce platforms like Alibaba and JD.com showed signs of fatigue, RED capitalized on this opportunity, with its live streaming orders reaching 5.4 times that of the same period last year – among them, store live streaming orders grew the fastest, at 9.4 times the previous year's figure.

Following buyer live streaming, store live streaming has emerged as a significant growth area for RED.

A service provider leader told "Growth Factory" that due to limitations in RED's overall atmosphere, user composition, and traffic scale, not all brands and categories are suitable for RED. Currently, startups with aesthetic appeal and emotional value are more suited for store live streaming on RED.

I. Store live streaming: the key to RED's commercialization success

"Commercialization" has always been a challenge for RED. On one hand, its e-commerce journey started relatively late. On the other hand, beyond commercialization, RED, as a content community, places great importance on maintaining its community atmosphere, compromising some efficiency in balancing content and commercialization.

An e-commerce practitioner told "Growth Factory" that RED's content and commercialization departments have been engaged in a constant tug-of-war. Currently, as RED prepares for its IPO, commercialization has become a more crucial metric, making the community department a significant casualty of layoffs. The most direct consequence is the significant reduction in image-text content on RED, with resources shifting towards video and live streaming.

RED initially ventured into self-operated e-commerce but later realized its limitations in products, supply chains, and logistics. In 2023, it shut down its self-operated e-commerce platforms "Xiao Lvzhou" and "Fuli She", pivoting to live streaming. A milestone in RED's e-commerce journey was the incubation of a group of buyer live streamers that aligned with RED's aesthetics, with the debut live streams of Zhang Xiaohui and Dong Jie each generating over RMB 50 million in GMV.

However, this is far from sufficient for RED.

Zhuang Shuai, founder of Bailian Consulting, analyzed for "Growth Factory" that based on RED's rumored revenue target of RMB 37.5 billion, e-commerce should contribute roughly half of that, implying that RED's e-commerce GMV needs to reach approximately RMB 200 billion.

According to industry interviews conducted by "Banshu Finance", RED's current influencer live streaming GMV stands at around RMB 100 billion. To achieve the RMB 200 billion target, focusing on store live streaming becomes the only viable path.

RED is now Tilt resources towards 「 Shop broadcast 」. This increased investment in store live streaming by RED aligns with the overall trend of live streaming e-commerce.

In an era of slow growth, store live streaming offers a more cost-effective option for brands compared to influencer live streaming. It is controllable and long-lasting, with the accumulated private domain users serving as a brand's long-term asset. According to reports from Huxiu and 36Kr, in 2021, the ratio of Taobao store live streaming to influencer live streaming was roughly 7:3, while Douyin's was around 5:5, with plans to further reduce the influencer live streaming ratio.

RED officially stated that it will develop both "buyer live streaming" and "store live streaming" concurrently, merging merchant operations and buyer businesses into a secondary e-commerce department under the leadership of Shi Yin, the former head of live streaming. This integration allows for resource allocation under a single leader, avoiding internal friction between the community and commercialization departments.

In fact, a former RED employee told "Growth Factory" that influencer live streaming served as a prototype for RED's live streaming e-commerce, with store live streaming poised to become the primary force in the future.

A service provider that has worked with RED also stated that RED's investment in store live streaming this year will exceed that in buyer live streaming.

Influencer live streaming is quickly approaching its limit. RED cannot mass-produce "tasteful yet sales-driving" anchors, and influencers may Loss . Zhang Xiaohui, a benchmark influencer on RED, also launched live streams on Taobao. Store live streaming addresses the sustainability issue in live streaming, enriching both content and product offerings while strengthening RED's control over upstream products.

II. The biggest competitor may be Tmall

An e-commerce industry insider said that theoretically, whenever RED ventures into e-commerce, it competes with all e-commerce platforms. In reality, RED finds it challenging to significantly impact Pinduoduo or Kuaishou. In the short term, RED is unlikely to significantly disrupt Douyin's core business, making Tmall its primary competitor.

A direct comparable metric is the "average transaction value per customer" (ATV). RED's current ATV for store live streaming exceeds RMB 400. According to a 2022 report by "Wan Dian LatePost," among various e-commerce platforms, Kuaishou's ATV is around RMB 50-60, Douyin's is RMB 90, and Taobao/Tmall's is RMB 120-150.

Specifically, RED's 2024 618 store live streaming rankings primarily feature two types of merchants: niche brands with high brand premiums and store live streams by brand owners. The latter, akin to buyer boutiques, are unique to RED but challenging to scale, while niche brands with high brand premiums originally belonged to Tmall's domain.

Blankme, a domestic beauty brand established in 2016, ranked third in RED's store live streaming during the 2024 618 period. According to a 2023 report by "Cosmetics Observer," Blankme originated on Tmall, with 30% of its daily sales coming from Douyin and 70% from Tmall.

These brands have limited budgets, and allocating funds to one platform reduces the budget for others. The choice of platform ultimately depends on where brands can acquire customers and convert them most efficiently.

Compared to Taobao/Tmall's shelf logic, RED's content-driven approach naturally yields lower conversion efficiency. Taobao/Tmall encourages merchants to "stream more and expose more," advocating for frequent and extended live streams. In contrast, RED requires anchors to build anticipation through preliminary posts, leading to a more relaxed approach, with weekly or monthly streams common and daily streams rare.

Compared to Douyin, another content-driven e-commerce platform, RED lags in traffic and commercialization capabilities. A former RED employee noted that e-commerce feels like a forced addition to RED, with its relationship to the community still unclear. Douyin's e-commerce success stems from its strong advertising capabilities, which RED lacks. "E-commerce is akin to another form of advertising. If you see an ad here and make a purchase, those with stronger advertising abilities will prevail," the former employee said.

RED's advantage in store live streaming lies in its strong fan engagement built through long-term content interactions, serving both sales and branding purposes. For small brands struggling for visibility and profitability on Taobao and Douyin's vast traffic pools, RED offers a cost-effective alternative. For major brands yet to enter RED, it serves as a complementary e-commerce scenario.

Rong Rong, head of the store live streaming department at Qihe Culture, said their experience shows that compared to Taobao and Douyin, RED requires pre-stream efforts to evoke product empathy among users, achieving breakthroughs in the quantity and quality of seeding posts. They then extend viral posts through differentiation and use private domain tactics to retain users. Their current cases achieve roughly 12 million monthly exposures, 200,000 reads, and a CTR (click-through rate) of approximately 15%.

While this result is decent on RED, it's average compared to Douyin and Taobao.

Douyin's unexpected slowdown in growth in 2024 underscores that e-commerce's essence lies in abundance, speed, quality, and affordability, with content serving as one path to reach users. As a content community, RED faces even greater challenges, lacking advantages in product supply, pricing, logistics, and service experience. RED needs to continuously ponder not just how to grow but how to excel, finding an irreplaceable value in an ultra-competitive market.

III. The primary issue is fostering users' transactional mindset

A brand leader told "Growth Factory" that RED cultivates a "seeding" mindset, not a "transactional" one.

This becomes RED's primary challenge – instilling a transactional habit in its users. If users are unaware they can shop on RED, the transactional path cannot be navigated.

This explains why RED's current key performance indicator is the daily average number of ordering users, focusing on the penetration rate of its e-commerce mindset among users rather than the transaction volume or order count commonly emphasized by e-commerce platforms.

RED needs to provide users with a clear reason to shop. Its current approach aims to make live streaming feel like browsing offline stores, placing products in lifestyle contexts and using "people" rather than just "products" to facilitate transactions.

This aligns with RED's community atmosphere, but its effectiveness for brand management remains to be proven over time.

RED's store live streaming is still in its infancy, with only niche brands testing the waters and no outstanding benchmark cases yet.

For RED, these small yet exquisite brands represent an opportunity, aligning with emerging consumption trends toward finer-grained aesthetics and preferences.

Additionally, an industry insider analyzed that for RED's store live streaming to make an impact on both the user and commercialization sides, transforming from a seeding platform to an e-commerce platform requires the introduction of mature major brands.

Rong Rong, head of the store live streaming department at Qihe Culture, told "Growth Factory" that high-ATV products from major brands naturally lend themselves to seeding on RED, with subsequent transactions following naturally. Whether major brands join depends on RED's resource allocation, while attracting many such brands depends on RED's ability to cultivate its own "Zhang Xiaohuis" in store live streaming.

"Growth Factory" learned that some mature major brands are observing RED due to its long-term transactional ceiling.

RED's decentralized content operation and traffic distribution logic preclude absolute head players, making it challenging for brand official accounts to accumulate followers and further convert them into transactions.

A former RED employee said that new brands currently dominate, with previous buyers now considered "new influencers."

E-commerce is a complex endeavor involving people, products, and markets. For RED, this journey has just begun.