Buyers, managers, small and medium-sized businesses: semantic extension of Xiaohongshu e-commerce

While pursuing commercialization, how Xiaohongshu can maintain its unique platform characteristics has become a topic worthy of attention. This article deeply analyzes how Xiaohongshu shapes the unique semantics of its e-commerce business through buyer culture, the concept of managers, and attention to small and medium-sized businesses, and explores the challenges and opportunities behind this strategy.

All content platforms will face the trade-off between commercialization and content, and Xiaohongshu is particularly faced with this problem. This is partly because in the current Internet environment, its content ecosystem is highly recognizable.

The formation of this impression is not only due to the clear positioning of the platform and the control of the tone, but also due to the choice of algorithm. It is well known that Douyin and Kuaishou are both short video platforms, and there is a relative difference in "centralization and inclusiveness" in traffic distribution. The former has stronger control over traffic, while the latter has better fan stickiness.

Similarly, Xiaohongshu's algorithm also has distinct platform characteristics. For example, the often-mentioned CES algorithm assigns points to interactive behaviors such as likes, favorites, reposts, comments, and follows, forming a ladder-style algorithm recommendation. In the end, users feel that the content is more useful and easier to browse.

The underlying logic of the content ecosystem determines the differences in business models. Douyin and Kuaishou have each found labels for their e-commerce businesses, pursuing extreme efficiency or flaunting trust between the two parties. In contrast, Xiaohongshu's e-commerce has proposed more than one new term, trying to point to a clear operational path.

On September 13, Xiaohongshu held its first growth brand conference for small and medium-sized businesses, stating that it would support small and medium-sized businesses, including launching the "Juguang Lite" delivery tool for small and medium-sized businesses.

Since last year, Xiaohongshu's commercialization sector has undergone multiple organizational structure and personnel adjustments, and has also tried various monetization paths. In addition to e-commerce, which is recognized as the track with the highest ceiling, it has also tried out local life, online literature and other fields, and all of them emphasize the integration of business and platform tone.

In essence, Xiaohongshu is still facing the often-discussed "dilemma" of choosing between accelerating commercialization and not losing the "Xiaohongshu characteristics".

01 Obsessed with the “Little Red Book Flavor”

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

Let’s briefly review these two definitions. “Buyers” is a refinement of content creators in the Xiaohongshu community. In terms of their identity positioning in the e-commerce transaction path, they are similar to common live streamers and bloggers who promote products, playing the role of gatekeepers of consumption.

But this seemingly fancy concept is itself a product of the fashion circle. After World War II, the fashion and cultural industries flourished, and a number of small and exquisite shops were born under the market drive. The shop owners are usually both buyers and sales staff, and they select goods based on their personal aesthetics. This model was subsequently extended from fashion to beauty, furniture and other fields, and formed a certain cultural influence.

The part that Xiaohongshu has refined is the ability of buyers to eliminate information gaps in transactions, helping to better link consumer demand with commodities, in which the value of personal aesthetics is magnified. At that time, anchors who became popular on Xiaohongshu, such as Dong Jie and Zhang Xiaohui, all had the label of "taste".

The consumer circles targeted by buyer e-commerce are also relatively fixed, including non-standard products, designer brands, and small and medium-sized businesses. The corresponding demands of these suppliers are more segmented and scenario-based, so they particularly need an intermediary to communicate whether they have what they need.

Lifestyle e-commerce is, to some extent, an upgraded concept based on buyer e-commerce, and its meaning is completely consistent with the platform positioning. Xiaohongshu itself is generally defined as a lifestyle community, as its official slogan says, "Mark my life."

On this basis, lifestyle e-commerce has a stronger demonstration meaning, and the categories covered extend to all aspects of life. Combining community sharing and e-commerce transactions is still the underlying logic, and the smooth flow of transaction links still requires strong content intervention, but the role of "manager" is proposed, which emphasizes the identity of merchants rather than "buyers" rather than the role of middlemen. At the same time, lifestyle e-commerce pays more attention to the diversity of consumption scenarios, thereby introducing more "potential categories".

It was not until Xiaohongshu clearly listed small and medium-sized businesses as the protagonists at the first Growing Brands Conference that we could see some patterns in the extension of Xiaohongshu's e-commerce language.

What remains unchanged is the pursuit of unique positioning. This is due to objective reasons such as the incomplete platform e-commerce infrastructure and the fierce competition in the mainstream standard product market. It is also Xiaohongshu’s subjective choice. Just like the prefix it gives to e-commerce every time needs additional explanation, using symbols to abstract behavior and using concepts to package positioning, to some extent, it is a kind of "Xiaohongshu flavor".

But at the same time, in its repeated annotations on e-commerce, Xiaohongshu is also looking for some balance to allow the relatively abstract positioning to point to a more specific operational path.

From buyers and managers to small and medium-sized businesses, Xiaohongshu wants to further clarify who will play the leading role and how to devote resources. 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 the GMV of small and medium-sized businesses increased by 436% year-on-year.

The high growth is due to the low base, but it also shows to a certain extent that the previous rounds of business promotion have accumulated a lot of samples of "small and medium-sized merchants gaining growth on the platform", allowing this path to be summarized and summarized into a methodology, which becomes the basis for the advancement of e-commerce business.

02 Striving for a balance between standardization and personalization

According to CICC data, the total time spent on the social sector in 2Q24 increased by 5% year-on-year, of which the total time spent on Xiaohongshu increased by 28% year-on-year, and the absolute value of the total time spent began to approach that of Weibo. Its average MAU and DAU in 2Q24 increased by 12% and 22% year-on-year to 210 million/100 million people respectively. The faster growth of DAU also reflects the further improvement of its user stickiness. In 2Q24, the average daily time spent on Xiaohongshu per person was 77 minutes.

Judging from the user activity as a content platform, Xiaohongshu is in its prime, and the outside world has high expectations for its commercial prospects. However, although the previous article used Douyin and Kuaishou as a comparison, Xiaohongshu and Douyin and Kuaishou are not completely opposite in terms of content. The path to content e-commerce that Douyin and Kuaishou have opened up is based on short videos and live broadcasts, while Xiaohongshu used to rely most on pictures and texts.

On August 30, Xiaohongshu held the "300 Familiar People·Xiaohongshu Creator Annual Meeting" in Shanghai, awarding community creators for the first time. There are two points of information worth noting.

First, the top creators are marked in the form of a list, and the scope of high-quality authors and high-quality content is defined. When many content platforms enter the e-commerce business, they will intentionally amplify the influence of top creators to gather more potential consumers, such as the vertical V matrix operated by Weibo for many years.

More importantly, Xiaohongshu is emphasizing the development of its video and live broadcast ecosystem. According to the "2024 Xiaohongshu Creator Trend Report" released by the conference, in August this year, the total number of live broadcast creators on Xiaohongshu was 2.48 times that of the same period last year, and the number of video preference creators was 1.43 times that of the same period last year, and the growth rate exceeded the growth of the overall number of creators. At the same time, among the creators shortlisted for the "300 Familiar People", 90% of the creators' video notes accounted for more than 30%.

Live streaming is indispensable for content e-commerce, whether it is due to its instant interactivity or the emotional connection between the audience and the anchor, which is easier to convert into consumption motivation, etc. The market has long verified the chemical reaction between video/live streaming and e-commerce. Although Xiaohongshu has joined the content e-commerce array, its reserve of video creators is far less than that of the former.

Therefore, in this creator meeting, Xiaohongshu said frankly that it is striving to become the preferred platform for "individual video creators" and frequently mentioned users' demand for video content consumption. The report data shows that the proportion of Xiaohongshu users reading video notes is 22% higher than the proportion of video notes published.

On the other hand, at the Growth Brand Conference held yesterday, Xiaohongshu also emphasized the iteration of tools for merchants, including the launch of the quick delivery tool "Juguang Lite" tailored for small and medium-sized merchants and the one-stop marketing delivery platform "Chengfeng". The former corresponds to the needs of customer information collection, and the latter corresponds to the needs of e-commerce marketing.

Improving the "skills" is a compulsory course for all e-commerce platforms, especially in today's world where consumers' attention is scattered and they are accustomed to switching between apps. E-commerce operations are more efficiency-oriented. Alibaba's full-site promotion, which is being vigorously promoted this year, is based on a similar idea.

Whether it is "make-up" video content or improving tools, Xiaohongshu e-commerce has done more to improve the standardized process, trying to make the growth curve of e-commerce clearer and more certain. After all, the concept of castles in the air needs to be implemented, and when it is difficult to derive a tailor-made methodology, imitation may be the only option.

03 Conclusion

After several interpretations of e-commerce business, Xiaohongshu is actually targeting the relatively non-standard and non-mainstream e-commerce world. It just found buyers, lifestyle managers, and small and medium-sized businesses one after another. These concepts are not mutually exclusive, but more like expanding boundaries and extending fields.

Xiaohongshu still needs to face the problem of how to scale up, including the establishment and optimization of the supply chain system, the cultivation of user purchasing habits, the balance between community and e-commerce, etc. Fortunately, as e-commerce is recognized as the ceiling of monetization, the penetration rate still needs to be improved. By achieving the ultimate efficiency in the subdivided fields, there is still ample room for growth.

But for the track that Xiaohongshu is currently focusing on, the trade-off between scarcity and popularity will exist for a long time. As a reference, there are probably several reasons why the original buyer profession has shown a tendency to decline in consumer culture. It may be that aesthetics are converging and losing their characteristics; or the brands favored by buyers have taken back the operating rights after they have grown and become stronger, making it difficult for buyer stores to continue; or after the global communication and logistics revolution, they have been impacted by e-commerce, and buyer stores have lost their appeal due to the single product.

By extension, buyers like Xiaohongshu will also face similar challenges. For example, how to expand the buyer group while ensuring their high product selection ability; how to grow together with mid-tier brands and always have "bargaining power"; and, as is often mentioned, how to have both the grass-roots mentality and the consumption nature.

As we mentioned at the beginning, it is precisely because of the particularity of Xiaohongshu's content ecology that it has no precedent to follow. It can only withstand the pressure and constantly try to break the balance while maintaining it.

Author | Gong Baifei Editor | Wang Wei This article is written by the author of Operation School [New Standpoint], WeChat public account: [New Standpoint Pro], original/authorized to be published on Operation School, and any reproduction without permission is prohibited.

The title image is from Unsplash, based on the CC0 protocol.