Source | BohuFN (bohuFN)

If Xiaohongshu turned into Taobao, would you shop on it?

According to 36Kr, "Xiaohongshu's e-commerce buyer operation business has merged with the merchant operation business to form an e-commerce operation department, becoming a second-tier e-commerce department." Industry insiders analyze that "Xiaohongshu has shifted from focusing on buyer live streaming to promoting buyer live streaming, and then to the coordinated development of store live streaming, aiming to achieve the unity of 'people' and 'goods'."

It has been observed that the recommended page on the homepage of Xiaohongshu has increased the content promotion of "live streaming store opening." Among the live streaming sections, two out of the four displayed contents are "Quitting my job to open a sweet potato shop at home" and "How to start a new account for beginners." Additionally, some live streaming stores are using slogans like "making friends" and "giving benefits to sweet potato sisters."

With the diversion of notes, the stimulation of orders from buyer live streaming, and the support for store broadcasting merchants, it is evident that Xiaohongshu has put in a lot of effort in e-commerce this time.

However, what Xiaohongshu faces is the challenge of balancing content ecology and commercialization after years of failed listings. Having been involved in e-commerce for a decade, can Xiaohongshu find the answer to monetization through store broadcasting this time?

01 Relying on Store Broadcasting to Open a New Path to "Monetization"

Last year, Xiaohongshu achieved profitability for the first time, which was a rare moment for the platform to stand tall. Subsequently, there were rumors of its listing, but Xiaohongshu denied the news. Regarding the persistent failure of listing, industry analysts said, "Xiaohongshu's profitability remains to be investigated, its business model is too single, and its valuation is also facing the risk of decline."

In itself, the model of content community commercialization is simple: generally relying on advertising, and the other is converting traffic into GMV through e-commerce.

Xiaohongshu also relies mainly on advertising, with this part of revenue accounting for nearly 80% of total revenue last year. However, based on the platform's built-in note seeding attribute and the high degree of fit between users and e-commerce users, e-commerce has always been the path that Xiaohongshu most hopes to achieve commercialization.

Xiaohongshu has been involved in e-commerce for almost a decade.

In 2014, Xiaohongshu launched the Welfare Society, providing users with a channel to directly purchase recommended products.

This was Xiaohongshu's initial attempt at a new commercialization path and the beginning of its e-commerce dream.

Subsequently, Xiaohongshu experimented with various approaches such as self-operation, live streaming with goods, and note-driven sales, but unfortunately, the results were not significant, and it did not form a shopping mindset among users. Industry analysts said, "Xiaohongshu's early e-commerce investment was blind or indecisive, resulting in poor performance."

The real turning point came in 2023, when Xiaohongshu promoted top-tier "buyers" like Dong Jie, Zhang Xiaohui, and Yi Nengjing, driving the platform's e-commerce to grow on a large scale.

During last year's Singles Day alone, Zhang Xiaohui's single-session sales exceeded 100 million yuan.

It was also last year that Xiaohongshu shouted the slogan "The Era of Buyers Has Arrived" and cut off poorly performing self-operated e-commerce platforms like Xiaoluzhou and Welfare Society. At the same time, it set a flag to "support 1 million buyers" and "1 million merchants" to promote normalized store broadcasting.

It is evident that Xiaohongshu's ambition in store broadcasting has been brewing for some time.

Not only has Xiaohongshu merged the buyer operation business and merchant operation business to form a second-tier e-commerce department this time, but it has also repeatedly "poached" talent to invest in the e-commerce department this year.

At the beginning of the year, Xiaohongshu recruited Wu Yingbing, the former head of supply and demand strategy at Didi, and Zhang Rui, the former head of Didi's ride-sharing business. Wu Yingbing is responsible for part of Xiaohongshu's e-commerce business, while Zhang Rui joined the commercialization team;

In March, Ye Heng, the former head of e-commerce products at Kuaishou, was also recruited to serve as the head of C-end products for Xiaohongshu's e-commerce;

Until now, the newly formed second-tier e-commerce department is headed by Yin Shi, the former head of Xiaohongshu's live streaming business, who reports directly to Conan, the Chief Operating Officer (COO) of Xiaohongshu.

From the front end of e-commerce products to the entire merged e-commerce department, there are professionals responsible for business at all levels, demonstrating Xiaohongshu's determination to expand its e-commerce operations this time.

Strategically speaking, the merger of buyer operations and merchant operations also marks the increasingly clear blueprint for Xiaohongshu's e-commerce. After building a live streaming ecosystem with buyers, it gradually enriched the supply side of store live streaming, forming a closed loop between "people" and "goods."

Moreover, the advantages of store broadcasting are not limited to this.

Store broadcasting differs from well-known live streamers like Li Jiaqi and Xiaoyangge. The former is conducted by store owners, eliminating middlemen, while the latter relies on the high traffic of live streamers, leading to good sales results but also high commissions. The most important thing is that brand and merchant exposure varies depending on the level of commissions.

Therefore, while live streaming by anchors has become very popular in recent years, more and more small and medium-sized merchants have found that costs are increasing and survival is becoming more difficult. Store broadcasting, on the other hand, provides development opportunities for small and medium-sized brands, cutting out middlemen and passing on real benefits to users.

Store broadcasting is gradually becoming a hotly contested area among e-commerce platforms.

Last year, Taobao, JD.com, and Pinduoduo all released relevant store broadcasting reports. Industry "bosses" like Zhong Xuegao Lin Sheng and Hongxing Erke Wu Rongguang rushed to enter live streaming rooms, engaging in one store "competition" after another.

This year, Xiaohongshu announced its 618 sales report in advance, with the number of merchants broadcasting being 3.8 times that of the same period last year, and the store broadcasting GMV being 4.2 times that of the same period last year. The official emphasized that "store broadcasting has become the strongest growth engine for merchants."

Obviously, store broadcasting has also become a new growth engine for Xiaohongshu.

Compared to other e-commerce platforms, Xiaohongshu's advantage in store broadcasting lies in its years of involvement in e-commerce yet still being in a "blank period."

For merchants, the unexplored high-traffic e-commerce market on Xiaohongshu provides greater development opportunities for brands;

Second, the platform's strong support for store broadcasting also provides greater development potential.

Based on this, more and more merchants are willing to come to Xiaohongshu to try new earning opportunities.

Just like Xiaohongshu, it is also exploring more commercialization possibilities in e-commerce.

02 How to Balance "Elegant" Female Users?

Even with Xiaohongshu's ambitious e-commerce goals, from a user perspective, would everyone really choose to place orders on Xiaohongshu?

For a long time, Xiaohongshu has cultivated an image as a content seeding community platform. Nowadays, when people have questions, they can choose to come to Xiaohongshu to find real reviews instead of asking Baidu, but when it comes to shopping, Xiaohongshu may not be the first choice.

As a user of Xiaohongshu, I can see that the shopping links or live streaming content for store openings on the platform's homepage have increased, but I am still more accustomed to reading bloggers' notes and placing orders on various e-commerce platforms.

The factor influencing ordering is habit, but the more crucial elements rely on the platform's functional improvement, diverse product categories, and guaranteed after-sales service.

Currently, Xiaohongshu has not yet formed a complete shopping closed loop.

By relying on both buyers and store broadcasting, Xiaohongshu has cultivated users' shopping mindset through buyer live streaming and attracted more merchants to enter the platform through store broadcasting, laying the groundwork for the transition from people to goods in the early stage. However, to stimulate user repeat purchases, it relies not only on diverse product categories but also on the improvement of platform functions and guaranteed after-sales maintenance.

Currently, the shopping cart interface on Xiaohongshu is relatively hidden, not located in the primary interface when entering the platform. Upon entering the shopping cart, one can also find a lack of functions like finding similar items for price comparison, indicating that the functionality is not yet complete.

At the same time, the platform's product variety is obviously not as mature as other e-commerce platforms, with limited options. This can be seen from sales and reviews:

Taking Anta's flagship store as an example, its best-selling items on Taobao have reached over 100,000 sales, while on Xiaohongshu, the best-selling items only have 3,000+ sales, with only 1,034 reviews. The sales of other unknown stores on Xiaohongshu are even fewer, with only a few or no reviews.

This reveals that the pool of merchants or products on Xiaohongshu is not large enough.

Looking at after-sales service, Xiaohongshu currently cooperates with the express delivery company Fengchao, which provides 24-hour return and exchange services, meeting users' diverse needs in terms of usage time, shipping scenarios, and operation methods.

However, shortcomings have also emerged. Fengchao's reputation has declined in recent years due to charging incidents, and its strength is also inferior to other logistics companies like "San Tong Yi Da." It can be inferred that the after-sales guarantee provided by Xiaohongshu may not be as solid as that of other e-commerce platforms.

The most important point is how to "balance" the refined female users on the platform.

As a content community platform, Xiaohongshu enjoys a highly active and sticky user base that other e-commerce platforms envy, but how to balance user conversion has always been the biggest obstacle to its commercialization.

In the past, Xiaohongshu was cautious about monetization for fear of affecting user experience and damaging the community atmosphere, resulting in insufficient commercialization capabilities and being questioned by capital for its failed listing attempts. Now that Xiaohongshu has finally embraced both buyer and store broadcasting to develop e-commerce, what kind of user feedback will it receive?

After all, fellow content community platform Bilibili is currently struggling in a quagmire of losses. In the past two years, the introduction of advertising and gaming businesses has led to排斥 or caused the loss of many users.

Can Xiaohongshu strike the right balance?

Reference Materials:

1. Huxiu Business Consumption Team: Xiaohongshu Finally Gets It

2. Lingtai LT: Emphasizing Store Broadcasting: Xiaohongshu Cannot Wait

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