All content platforms will face the dilemma between commercialization and content, and Xiaohongshu is particularly affected by this, partly because its content ecosystem is highly recognizable in the current internet environment.

This impression is not only formed by the platform's clear positioning and control over tone, but also a choice of algorithm. It is well known that Douyin and Kuaishou, both short video platforms, have relative differences in traffic allocation between "centralization and inclusiveness." The former has stronger control over traffic, while the latter has better fan stickiness.

Similarly, Xiaohongshu's algorithm also has distinct platform characteristics, such as the frequently mentioned CES algorithm, which assigns scores to interactive behaviors like likes, favorites, reposts, comments, and follows, forming a step-by-step algorithm recommendation. As a result, users perceive the content as more useful and "easier to browse."

The underlying logic of the content ecosystem determines the differences in business models. Douyin and Kuaishou have found their own labels for their e-commerce businesses, pursuing either ultimate efficiency or emphasizing trust between both parties. In contrast, Xiaohongshu e-commerce has proposed more than one new term, attempting to point to a clear operational path.

On September 13, Xiaohongshu held its first Growth Brand Conference for small and medium-sized businesses, announcing support for these businesses, including the launch of "Juguang Lite," a targeting tool specifically for small and medium-sized businesses.

Since last year, Xiaohongshu's commercialization sector has undergone multiple organizational and personnel adjustments, with various attempts at monetization paths. In addition to e-commerce, which is widely recognized as having the highest ceiling, Xiaohongshu has also experimented with local lifestyle and online literature, emphasizing the integration of business and platform tone.

Essentially, Xiaohongshu still faces the common "dilemma" of accelerating commercialization while maintaining its unique characteristics.

01. Struggling with the "Xiaohongshu Flavor"

Since last year, Xiaohongshu has added two prefixes to its e-commerce business: buyer and lifestyle.

A brief review of these two definitions. "Buyer" refines the content creators in the Xiaohongshu community, positioning them similarly to livestreaming hosts or product recommendation bloggers in terms of their role in the e-commerce transaction path, playing the role of consumer gatekeeper.

However, this seemingly fancy concept is inherently a product of the fashion industry. After World War II, with the thriving fashion and cultural industries, a group of small, exquisite boutiques emerged driven by market demand. Shop owners were often both buyers and salespeople, selecting goods based on their personal aesthetics. This model later extended to beauty, furniture, and other fields, forming a cultural influence.

The part that Xiaohongshu refines, the buyer's ability to bridge the information gap in transactions and better connect consumer demand with products, amplifies the value of personal aesthetics. Popular livestreamers on Xiaohongshu, such as Dong Jie and Zhang Xiaohui, were labeled as having "taste."

The consumer group targeted by buyer-based e-commerce is relatively fixed, focusing on non-standard products, designer brands, and small and medium-sized businesses. These suppliers cater to more segmented and scenario-specific demands, making a middleman essential for communication.

Lifestyle e-commerce is, to some extent, a conceptual upgrade based on buyer-based e-commerce, fully aligned with the platform's positioning. Xiaohongshu is inherently defined as a lifestyle community, as reflected in its official slogan, "Mark My Life."

On this basis, lifestyle e-commerce carries more demonstrative significance, covering various aspects of daily life. Combining community sharing and e-commerce transactions remains the underlying logic, where strong content intervention is still necessary for a smooth transaction process. However, it introduces the concept of "curator," which emphasizes the merchant identity more than that of an intermediary for product recommendations, compared to "buyer." Meanwhile, lifestyle e-commerce places greater importance on the diversity of consumption scenarios, leading to more "potential categories."

As Xiaohongshu explicitly made small and medium-sized businesses the protagonists at its inaugural Growth Brand Conference, we can observe some patterns in the evolution of Xiaohongshu's e-commerce language.

The constant pursuit of unique positioning stems from both objective factors like incomplete e-commerce infrastructure and fierce competition in mainstream standardized product markets, as well as Xiaohongshu's subjective choices. Just as every prefix it gives to e-commerce requires additional explanation, abstracting behaviors with symbols and packaging positioning with concepts, to some extent, constitutes the "Xiaohongshu Flavor."

Yet, in annotating e-commerce repeatedly, Xiaohongshu is also seeking balance, directing its relatively abstract positioning towards more concrete operational paths.

From buyers and curators to small and medium-sized businesses, Xiaohongshu aims to clarify who the protagonists are and how resources should be allocated. Official data shows that in the first half of 2024, the number of small and medium-sized businesses operating on Xiaohongshu increased by 379% year-on-year, and their GMV grew by 436% year-on-year.

While the high growth can be partially attributed to a low base, it also indicates that previous business pushes have accumulated numerous samples of "small and medium-sized businesses gaining incremental growth on the platform," enabling this path to be summarized and methodologized as a basis for e-commerce advancement.

02. Pursuing Balance in Standardization and Personalization

According to CICC data, the total time spent on social media platforms increased by 5% year-on-year in Q2 2024, with Xiaohongshu's total time growing by 28% year-on-year. Its absolute total time is approaching that of Weibo. Xiaohongshu's average MAU and DAU in Q2 2024 increased by 12% and 22% year-on-year to 210 million and 100 million, respectively. The faster growth in DAU also reflects further enhancement of user stickiness, with the average daily time spent on Xiaohongshu reaching 77 minutes in Q2 2024.

Looking solely at user activity as a content platform, Xiaohongshu is in its prime, leading to high expectations for its commercialization prospects. However, despite comparisons to Douyin and Kuaishou, Xiaohongshu's content does not fully align with theirs. Douyin and Kuaishou's content-driven e-commerce path leverages short videos and livestreams as springboards, while Xiaohongshu has traditionally relied heavily on image and text content.

On August 30, Xiaohongshu held the "Acquaintances 300 - Xiaohongshu Creator Annual Meeting" in Shanghai, awarding community creators for the first time. Two pieces of information are noteworthy.

Firstly, top creators were highlighted through rankings, defining the scope of high-quality creators and content. Many content platforms deliberately amplify the influence of top creators when venturing into e-commerce to attract more potential consumers, similar to Weibo's long-running vertical influencer matrix.

More importantly, Xiaohongshu emphasized the development of its video and livestream ecosystem. According to the "2024 Xiaohongshu Creator Trends Report" released at the conference, the total number of livestream creators on Xiaohongshu in August 2024 was 2.48 times that of the same period last year, while video-preferring creators increased by 1.43 times. Both growth rates exceeded the overall creator growth. Additionally, 90% of creators selected for "Acquaintances 300" had over 30% of their posts in video format.

Livestreaming is inevitable in content-driven e-commerce, given its immediate interactivity and the ease with which emotional connections between viewers and hosts can translate into consumption motivation. The market has already validated the synergy between video/livestreaming and e-commerce. Although Xiaohongshu has joined the content-driven e-commerce fray, its video creator pool pales in comparison to its competitors.

Therefore, at the Creator Meeting, Xiaohongshu openly aspired to become the preferred platform for "individual video creators" and frequently mentioned users' demand for video content. Report data shows that the proportion of Xiaohongshu users reading video posts is 22% higher than that of video posts published.

Meanwhile, at yesterday's Growth Brand Conference, Xiaohongshu also emphasized tool iterations for merchants, including the launch of "Juguang Lite," a quick targeting tool tailored for small and medium-sized businesses, and "Chengfeng," a one-stop marketing platform. The former addresses customer data collection needs, while the latter caters to e-commerce marketing demands.

Refining "techniques" is a compulsory course for all e-commerce platforms, especially in an era where consumer attention is fragmented, and efficiency is paramount in e-commerce operations. Alibaba's recent push for full-site promotion follows a similar rationale.

Whether it's catching up on video content or refining tools, Xiaohongshu's e-commerce endeavors have focused on improving standardized processes, aiming for a clearer and more predictable growth trajectory. After all, conceptual castles in the air require operational grounding, and when tailored methodologies are elusive, imitation may be the only option.

03. Conclusion

After several interpretations of its e-commerce business, Xiaohongshu has consistently targeted the relatively non-standard and niche segments of the e-commerce landscape. It has successively identified buyers, lifestyle curators, and small and medium-sized businesses as protagonists, with these concepts not replacing but rather expanding boundaries and domains.

Xiaohongshu still faces challenges in scaling up, including establishing and optimizing its supply chain system, nurturing user purchasing habits, and balancing its community and e-commerce aspects. Fortunately, e-commerce, as a universally recognized monetization ceiling, still has room for penetration growth, and maximizing efficiency in niche segments offers ample room for expansion.

However, in Xiaohongshu's current focus areas, the trade-off between scarcity and popularity will persist. As a reference, the original buyer profession has shown signs of decline in consumer culture for several reasons: aesthetic homogenization leading to loss of uniqueness, favored brands reclaiming ownership after growth, or the impact of e-commerce on boutique shops post-global communication and logistics revolution.

Extending this line of thought, Xiaohongshu-style buyers will also encounter similar challenges, such as expanding the buyer group while ensuring high product selection capabilities, growing alongside mid-tier brands while maintaining bargaining power, and balancing product recommendation mindset with consumption nature, as often mentioned.

As we mentioned at the beginning, Xiaohongshu's unique content ecosystem leaves it without precedents to follow. It must withstand pressure, continually test the benefits of breaking the balance, while maintaining that balance.

*Images in the headline and article are sourced from the internet.