New e-commerce forces, Xiaohongshu and Video Accounts secretly compete for 618

The e-commerce industry is undergoing a profound transformation, and Xiaohongshu and Video Account, as emerging forces, have launched a secret battle during the 618 period. This article deeply analyzes how these two platforms have reshaped user needs and consumer culture through innovative content e-commerce models, providing a new perspective and thinking for the future development of the e-commerce industry.

Ever since Pinduoduo and Douyin emerged from the gaps between giants and became new giants, no one dares to say that the overall situation of e-commerce has been determined.

Over the past 20 years, e-commerce giants have emerged one after another in the evolution from shelf e-commerce to content e-commerce and live streaming e-commerce. When Douyin's e-commerce GMV reached nearly 3 trillion yuan and Pinduoduo's market value surpassed Taobao, the emotional story and rational logic were almost completely reversed.

However, some stories that seemed successful in the past showed a different trend in 2024’s 618: super anchors almost disappeared, “howling live broadcasts” were widely complained about, and merchants who were asked to lower prices jointly rejected them…

All the changes, without exception, reveal a fact that cannot be ignored: the e-commerce industry is also exploring a return to reality and essence. Merchants, anchors and users are unwilling to exist as "a flow", but appear in the e-commerce world as "a person". At the same time, the changes in user needs and consumption habits have not been fully met.

At a media communication meeting held by Xiaohongshu e-commerce on June 12, when the media asked about traffic issues, Gintoki, the head of Xiaohongshu e-commerce operations, said, "Users, buyers, and merchants should not be treated as traffic operations. If you treat it as a person, people are simple, but if you treat traffic, it is routine and tool-based. Good content, good products and good interactions are the ways for merchants and buyers to connect with users on Xiaohongshu."

It was also at this communication meeting that the 618 data released by Xiaohongshu e-commerce showed that as of June 10, the order volume of Xiaohongshu e-commerce live broadcast room during the 618 period was 5.4 times that of the same period last year, and the store broadcast GMV was 5 times that of the same period last year.

WeChat Video Account, another one of the two "new forces of e-commerce", has also undergone important changes recently. Video Account e-commerce has been incorporated into the WeChat open platform. Relevant media reports mentioned that "he (Zhang Xiaolong) recently mentioned that goods are content, hoping that WeChat can make goods circulate in a new way." The report quoted the person as saying that if this direction is followed, a realistic possibility may be to innovate the transformation path of content carrier + commodity transaction.

At the end of 2023, the saying that "Xiaohongshu and Video Account are the two most worthwhile platforms to invest in in 2024" has been circulating in the e-commerce circle. The reason is not that these two platforms have a large number of users, but the bigger difference is that they both seem to want to tell a different e-commerce story from the perspective of "people".

After all, it is these essential differences, rather than copying the leaders, that can create the story of the "new e-commerce forces."

01 20 years of e-commerce: the pursuit and migration of traffic

Most of the time, the Internet is about moving existing things to the Internet in a different way.

At the turn of the millennium, domestic e-commerce was still in its infancy, with its foundation relying on simple online shelf layouts and transaction methods limited to emails and original web pages. It was not until 2003 when Taobao and JD.com emerged and entered the e-commerce arena that the domestic e-commerce market experienced its first large-scale growth.

Based on the B2C and C2C models, domestic e-commerce players have greatly reduced consumers' shopping costs and improved shopping convenience, which also heralds the rise of a new consumption model - at any time, no matter where you are, people only need to connect to the e-commerce platform through their devices to browse a wide range of products as if they were in a physical store, and experience the complete process of shelf e-commerce from selection to purchase.

This is the opening story of domestic e-commerce.

Just like Walmart's physical shelves, shelf e-commerce, as a classic symbol of the e-commerce industry, also differentiated the first wave of domestic e-commerce. In the years since then, Taobao, JD.com and other players have also repeatedly submitted impressive GMV answers at time nodes such as Double Eleven and 618, constantly breaking industry records. This is the story of the first 15 years of the entire 20 years.

However, with the evolution of the Internet and the diversification of consumer demands, a single shelf e-commerce has gradually been unable to meet the needs of all users. Even if a customized shopping experience is achieved through consumer behavior analysis and personalized recommendation algorithms, in response to technological innovation, shelf e-commerce under the logic of "people looking for goods" has never been able to keep up with the evolution of consumer culture.

Change begins with a small step.

Taobao Live was launched in 2016. During that year, at meetings attended by some important merchants and TPs (Taobao agents), Jack Ma, then CEO of Alibaba Group, kept encouraging them to join the live broadcast, “saying that this is the opportunity of the next era,” recalled a merchant who participated.

At that time, with the widespread popularization of 4G networks and the significant improvement in the performance of smartphones, a number of live broadcast platforms emerged like mushrooms after a rain. Against this background, the launch of Taobao Live truly marked the rise of live broadcast e-commerce.

2016 is also known as the first year of live streaming.

Two years later, the addition of Douyin and Kuaishou injected more momentum into the model. Since then, live streaming e-commerce has swept the entire market like a tide, spreading rapidly with an unstoppable momentum and reconstructing e-commerce consumption culture.

On the one hand, live streaming e-commerce makes interaction between users and merchants possible through the real-time interactive live streaming format, thereby greatly enhancing the immersion and experience of shopping, effectively making up for the shortcomings of traditional shelf e-commerce in emotional connection, and redefining the relationship between consumers and commodities.

On the other hand, at a time when the e-commerce track has undergone years of baptism by shelf e-commerce, the arrival of live streaming e-commerce is timely.

At that time, it was an era of "commodity explosion". Each product may have thousands of similar styles, with subtle differences in appearance, quality, efficacy and price. The situation of serious homogeneity and information overload has undoubtedly increased the time cost of screening information, and also increased the decision-making pressure of users when purchasing goods. The "goods find people" logic created by the core links of live e-commerce such as product selection and explanation is just a good medicine.

It is worth mentioning that one of the characteristics of the live e-commerce model is that it captures the user's attention through high-frequency content output, and locks in the target audience through precise algorithm recommendations to improve marketing efficiency. This makes short video players show great potential in this regard.

After all, the short video platform is essentially a traffic generation center, where many users continuously create content to form a continuously flowing traffic pool. The platform does not need to purchase a large amount of traffic from outside, but only needs to manipulate and distribute the traffic to match its value.

For this reason, as the logic of live e-commerce continues to evolve, short video platforms have gradually become its strong support.

In August 2020, Douyin and Taobao officially broke up. More than a year later, Douyin's GMV exceeded 1 trillion.

02 E-commerce Warring States, waiting for new variables

Looking at the e-commerce narrative over the past two years, from Alibaba's efforts on Taobao and JD.com's 10 billion subsidies, to Douyin and Kuaishou's entry into shelf e-commerce, and then to Pinduoduo and JD.com's efforts on short videos, various giants have competed to invade each other's hinterland to seek growth, or to launch defensive counterattacks against their opponents' pace.

The logic behind this is that as the Internet dividend gradually fades and the e-commerce industry matures, competition in the field becomes increasingly fierce, and the industry naturally moves towards an accelerated stage of survival of the fittest. This not only puts more stringent requirements on players, but also squeezes the living space of a large number of merchants.

Take this year's 618 as an example. Whether it is traditional shelf e-commerce or live broadcast e-commerce, "the lowest price on the entire network" and red envelope subsidies are still the core strategies to grab users and traffic. However, in this fierce competition environment, the cost of price wars is often passed on to platform merchants by players, forcing merchants to make concessions - the popularization of the "refund only" logic also has this line of coincidence.

This means that even though the penetration rate and GMV of e-commerce platforms are still rising, not all participants can benefit from it. On the contrary, the overly involuted competition environment squeezes various e-commerce platforms into a narrow track, which is constantly accelerating but difficult to break through, and a large number of mid-sized merchants caught in it are unable to withstand the pressure.

The reason is that in the shelf e-commerce stage, e-commerce platforms only serve as display windows for goods, and the core lies in the goods themselves; while in the emerging short video e-commerce, people are still regarded as part of the traffic - e-commerce giants are competing with each other in this traffic game, and ultimately converting traffic into GMV through stimulation and inducement.

However, for new players and e-commerce platforms, focusing on short videos can certainly grab users' attention, but the real content ecosystem needs to be "nurturing". Forcibly introducing content genes by spending money to buy traffic is undoubtedly too crude, which will lead to the content ecosystem being too fragile.

The hasty entry is a reflection of the e-commerce players' panic over the depletion of traffic. As they continue to penetrate into each other's territories, the players are under pressure from lengthening battle lines and dispersing their forces.

On the other hand, in the context of no more room for competition in the market, traditional e-commerce marketing strategies are becoming increasingly powerless, and the growing number of users are tired of dealing with the traditional low-price traffic generation and shouting-style sales strategies, and even feel resistance to them - even the top anchors are currently facing the pressure of declining sales data.

The e-commerce industry urgently needs new variables rather than new traffic forces.

Returning to the essence of e-commerce and serving people's real needs may be the solution.

This is not only a shift in business logic, but also a deep reflection and reshaping of the existing consumer culture - no longer based on short-term impulse induction to achieve conversion, but to grasp each person's unique needs and preferences, and meet real needs in a way that they can truly understand and accept.

Following this logic, Alibaba, which has been fighting all over the country, finally called for a "return to Taobao" to reshape the user's mind and try to stabilize its own basic base; Xiaohongshu and Video Account tried to redefine the relationship between content and e-commerce, providing another possibility for the changing industry.

03 Imagination of New Forces

For new e-commerce players, it is unrealistic to simply rely on following industry trends and wait until the red ocean turns blue.

Therefore, in the context that "the lowest price on the entire network" and traditional hawking-style live broadcasts have been widely adopted by the market, Xiaohongshu and Video Account have taken a different approach and embarked on a unique development path.

As Tencent's "hope of the whole village", Video Account is different from other e-commerce platforms in their logic of fighting in the low-price field. It pays more attention to improving its own quality tone and maintaining the health of the e-commerce ecosystem, and regulates it by adopting strategies to restrict low-price traffic and low-rated products. For example, it has restricted products below 5 yuan from entering the preferred alliance, and investigated the barbaric traffic-generating strategy of "low price and high mail".

The temptation brought by the private domain has also attracted small and medium-sized businesses with limited profitability and a large number of brands to settle in. In response, Video Account did not choose to collect all the receivables, but instead strengthened the entry threshold for brand merchants and reduced the number of new brands and white-label brands on the platform to strengthen the platform's brand power. The rapidly growing Video Account does not seem to want to become the next Douyin and Kuaishou.

Xiaohongshu’s e-commerce flywheel is also accelerating.

In 2023, with the live broadcasts of Dong Jie and Zhang Xiaohui, Xiaohongshu broke out of the red ocean with its buyer characteristics. In the past year, Xiaohongshu has continuously made up for the shortcomings of e-commerce infrastructure, and its buyer ecology has also gradually improved.

It is reported that during the 618 period, the number of buyers on Xiaohongshu’s e-commerce platform exceeded one million, three times that of the same period last year. Take fashion buyer @合合哒 as an example. Within less than a month of becoming a buyer on Xiaohongshu, he achieved sales of 4.3 million per platform, and 13 million per platform during the 618 period.

In addition to the data growth, the buyer ecosystem of Xiaohongshu has also become more diverse. Creators with reputation across the entire network are now transforming into Xiaohongshu buyers one by one; many ordinary users have also got their own piece of the pie through their own efforts.

However, buyers do not seem to be the end of Xiaohongshu. After cultivating e-commerce minds through buyers' live broadcasts, Xiaohongshu is now trying to focus on store broadcasts, trying to achieve e-commerce transformation through "buyers' live broadcasts + store live broadcasts". It is reported that during the 618 period, Xiaohongshu's store broadcast GMV reached 5 times that of the same period last year.

Take Zhiwu Home Furnishing as an example. As a designer home furnishing brand that has been established for less than three years, it has relied on the content base of Xiaohongshu and has rapidly risen through buyer live broadcasts and store live broadcasts in more than a year since it entered Xiaohongshu. During the 618 period, the sales of a store live broadcast exceeded one million.

Zhiwu Home told Photon Planet that Xiaohongshu’s store broadcast is completely different from other platforms. It does not pursue low-price competition or excessive promotion, but tells a story and explains in depth the product’s design concept, materials used, development process, etc. In the presentation of the live broadcast scene, professional photographers and professional cameras will be equipped instead of using mobile phones to ensure high-definition images and better visual experience.

To some extent, compared with the common shouting sales floors of Douyin and Kuaishou, as well as the "supermarket" of shelf e-commerce, the style of Xiaohongshu's store broadcasts is more like "shopping in a mall" - users are no longer just concerned about the absolute advantages in terms of price, but are beginning to pay attention to multi-dimensional factors such as brand selection, experience differentiation and channel tone, and are more willing to pay for the value and culture behind the products.

Therefore, although the internal logic is different, Xiaohongshu has also solved the problems of repurchase rate, return rate and average order value that have plagued e-commerce for many years.

How to allow "people's" needs to be identified and met by others (merchants, anchors/buyers), allowing products to become content and integrate into the community, and solving e-commerce problems in a native way is becoming the direction of Xiaohongshu's e-commerce.

Ultimately, there is no fixed, unique solution in the e-commerce arena.