Kuaishou, Bilibili, and Xiaohongshu are trying to grow during 618

In the fierce competition of the 618 promotion, in addition to the low-price competition among traditional e-commerce giants, Kuaishou, Bilibili and Xiaohongshu, which started out as content platforms, are also exploring their own e-commerce growth paths. This article deeply analyzes how these platforms find new growth points and breakthroughs in the e-commerce field through differentiated strategies and innovative attempts, and provides new ideas and cases for the diversified development of the e-commerce industry.

During this year's 618 promotion, Taobao, JD.com, and Pinduoduo are competing in low prices, while new e-commerce companies - Bilibili, Kuaishou, and Xiaohongshu, which are latecomers who started out in the e-commerce field with content, are trying to differentiate themselves.

Taobao, JD.com, and Pinduoduo are so-called “shelf e-commerce platforms”. They try to continuously deepen their brand image of “lowest prices on the entire network” through face-to-face price comparisons and automatic price tracking, which also makes the competition between them more direct. Platforms such as Kuaishou, Xiaohongshu, and Bilibili, which started with content, have gradually found their own distinctive e-commerce development paths in the attempts to bring goods through media forms such as short videos, live broadcasts, and graphic notes. Whether it is building a closed loop or embracing an open loop, it is a differentiated choice made according to the characteristics of the platform.

It is worth mentioning that compared with the "first echelon" who have been through many battles in the promotion but are always eager for growth, the "second echelon" members who are still latecomers are still on the fast track of scale expansion, which is an advantage of a small base. However, in addition to the double-digit percentage or even multiple growth, they also need to solve problems in traffic distribution and tool construction, especially how to maintain a delicate balance between content and commercialization while focusing on e-commerce.

01 Both closed-loop and open-loop have growth

The growth of the “second echelon” of e-commerce is recorded in the interim battle report of 618.

Kuaishou, whose e-commerce GMV (transaction volume) will exceed one trillion yuan in 2023, saw a 32% year-on-year increase in the number of active merchants on the platform and a 25% year-on-year increase in the number of new merchants from May 20 to May 25. In addition to more new merchants participating in the platform promotion, pan-shelf scenarios such as shopping malls, recommendations, searches, and stores are becoming new growth points: the number of pan-shelf payment users increased by 59% year-on-year, and the number of pan-shelf payment orders increased by 67% year-on-year; the number of platform search payment users increased by 60% year-on-year, the search payment GMV increased by 65% ​​year-on-year, and the number of search payment orders increased by 57% year-on-year.

Compared with 618 in 2023, Kuaishou e-commerce pays more attention to the cross-domain operation of merchants and influencers, and further promotes the full-domain interconnection of "content field + shelf field" products. At the same time, user experience is elevated to a new level, and products with high quality and price ratio and merchants with high praise are expected to obtain more traffic.

A Kuaishou merchant told the power plant that although Douyin can achieve explosive sales in a short period of time, "Douyin's fans are not sticky." In contrast, Kuaishou, which focuses on private domain traffic, is a "steady and long-term" business. The return rate of its business categories on Kuaishou is "at least 5 points higher than Douyin." Even if other platforms perform poorly, Kuaishou is expected to serve as a "pension" channel. The merchant also said that some users even identify the source of the goods through the uniform packaging, "They told the customer service, I don't want things that are not from you."

Xiaohongshu, which proposed the concept of buyer e-commerce and tasted the sweetness, continues to increase its investment in live streaming. In its previously released 618 promotion registration guide, live streaming is called the "first engine" of e-commerce growth, and most of the incentive policies launched by the platform are also related to it.

The power plant noticed that Xiaohongshu e-commerce has begun to focus on store broadcasts (i.e. store live broadcasts), and has launched a series of live broadcast resources and interactive gameplay for merchants at different stages of operation. From the "Super Store Broadcast Day" suitable for mature merchants, to the "Store Broadcast Qualifying Competition" and "Store Broadcast Rebate Coupons" that take into account both mature merchants and small and medium-sized merchants, as well as the "Store Broadcast Rising Star Plan" for new merchants, support is provided at the level of traffic and subsidies. Nie Ping, the manager of the designer home brand Zhiwu, mentioned that during the 618 period, Xiaohongshu's traffic support was significantly strengthened. Nearly 10,000 people made reservations for the large-scale live broadcast of its store, and the number of viewers reached 46,000, which is the sum of the live broadcast sessions in the previous few months.

At the buyer level, Xiaohongshu e-commerce has launched two modes of play: buyer competition and buyer sprint competition. Similar to store broadcasts, the incentives for buyer live broadcasts include traffic and platform voucher subsidies, and the core evaluation indicators are broadcast duration, broadcast frequency, and GMV. A Xiaohongshu maternal and child blogger found that during the 618 period, the homepage of Xiaohongshu frequently pushed the homepages of bloggers who were broadcasting live to users, and "the traffic tilt was very obvious." Not only that, in her follow list, many Xiaohongshu bloggers with thousands or tens of thousands of fans started their first live broadcast with goods. Another Xiaohongshu home blogger who participated in Xiaohongshu's offline product selection meeting also told the power plant: "Now buyers tend to contact bloggers who can broadcast live, which may be because the platform attaches importance to it and the effect is relatively good."

According to data released by Xiaohongshu e-commerce, as of June 10, the number of orders on Xiaohongshu e-commerce during the 618 shopping festival was three times that of the same period last year, the number of orders in the live broadcast room was 5.4 times that of the same period last year, and the GMV of store broadcasts was five times that of the same period last year. Among them, the number of buyers with a single transaction volume of over one million on Xiaohongshu was three times that of the same period last year, and the number of buyers with a GMV growth of more than 100% was 2.8 times that of the same period last year; the number of store broadcasts with a single sales volume of over 100,000 was four times that of the same period last year.

Taking the Zhiwu brand as an example, buyer live broadcasts account for the bulk of its store's turnover, but Nie Ping has "very high expectations" for store broadcasts. She hopes that in the future, with the platform's traffic support and its own marketing strategy and cargo differentiation, "a more symbiotic state" can be achieved. Yin Shi, head of Xiaohongshu's e-commerce operations, told the power plant that Xiaohongshu e-commerce will not make a choice between buyers and store broadcasts. This is not a multiple-choice question, but a complete ecosystem driven by two wheels. There is no so-called "traffic distribution balance" internally. What needs to be done is how to benefit every type of merchant and buyer. Exploring potential consumer users and improving the accuracy of recommendations are the core work directions of Xiaohongshu e-commerce in this regard.

Compared with Kuaishou and Xiaohongshu, which build e-commerce closed loops and strive to keep transactions on the site, Bilibili's choice is a "large open loop" strategy. At the analyst meeting after the first quarter of 2024 financial report, Bilibili Vice Chairman and COO Li Ni mentioned that in addition to JD.com, Taobao, Tmall, and Pinduoduo, Bilibili has also expanded its cooperation with Vipshop, Dewu, Xianyu and other platforms. "We are actively introducing merchants' budgets together with e-commerce platforms, which will bring great growth and increment in the future."

She also revealed that compared with 618 in 2023, this year's overall platform budget has increased by more than 30% year-on-year, and the merchant budget has increased by more than 250% year-on-year. In addition to simple traffic cooperation, Bilibili has also included content cooperation in the scope of cooperation, and it is expected that brand advertising revenue will increase by 40% year-on-year. One example is that according to the 618 goods-carrying incentive plan released by Bilibili, UP hosts will have the opportunity to obtain traffic incentives if they participate in live streaming for the first time, publish goods-carrying videos with 618 official topics added, and complete the target goods-carrying GMV. In addition, Bilibili's cooperation with vertical industries has been further strengthened, expanding from platforms to platforms and merchants, promoting the formation of a complete link from planting grass to conversion, transaction, and consumption. "Bilibili's budget for all e-commerce nodes and its share in customer budgets are actually continuously increasing, and its ranking is also in the forefront." Li Ni added.

02 Advancing and improving through trial and error

Similar to the "first-tier" e-commerce platforms, the income sources of the "second-tier" players are roughly divided into three parts: e-commerce advertising, transaction services, and direct sales of goods. Ideally, merchants and anchors operating on the platform will inevitably conduct traffic-based advertising in order to meet marketing needs and obtain more sustainable exposure. Kuaishou's "internal circulation" advertising revenue comes from this.

The aforementioned Kuaishou merchant revealed to the power plant that from August 2023 to date, the commercial promotion expenses consumed by it on Kuaishou are around 6 to 7 million yuan. However, after reaching 10%, ROI (return on investment) "is very difficult to go up." Although Kuaishou's influencer-led ecosystem is becoming more and more mature, the merchant still focuses on store broadcasting and has not tried influencer distribution. "The influencer sells tens of thousands of pieces for you, and he leaves after finishing his work. Once the goods are returned, they are mine. Who will deal with them for me?

However, not all businesses can achieve rapid growth on Kuaishou without relying on influencers. In the view of a beauty brand business, there are "relatively few" brands that have successfully promoted store broadcasts on Kuaishou and "done very well." Her explanation is that on Douyin, which is relatively "de-headed", the link from influencer fans to merchant fans is more feasible, but on Kuaishou, users are more willing to believe in their favorite influencers. If a Kuaishou influencer's live broadcast room is explaining the products sold in his store, the most intuitive manifestation is that the traffic acceptance and conversion of his store at the same time are "not much."

Another person from a beauty brand holds the same idea. In his opinion, when users are more interested in influencers than brands, it doesn't matter which merchant they buy from or what they buy. "For us, this is more of a sales growth channel."

Unlike Kuaishou, Xiaohongshu only clarified the concept of buyer e-commerce last year. Prior to that, it has always been a platform for brand promotion and user recommendation. In the words of a personal care products merchant, "the e-commerce attributes are too weak."

Dong Jie and Zhang Xiaohui's performance as live streamers has made Xiaohongshu firm in its current e-commerce route - instead of jumping into the red ocean and selling at low prices, it is better to start with its own characteristics and fight for a place in the high-priced field. After all, as a lifestyle platform, Xiaohongshu users are keen on "asking for links", and what the platform needs to do is actually write the answer in the blank space.

However, this cannot be achieved overnight. Behind the launch of each live broadcast room and the release of each note, the infrastructure and product capabilities of Xiaohongshu's e-commerce need to be continuously supplemented. A Xiaohongshu service provider told the power plant that to this day, it is still a "business that can be done" for institutions to settle in Xiaohongshu. The review and certification efficiency of corporate accounts is low, and the traffic momentum is insufficient in the early stages of operation. Nie Ping recalled that when Zhiwu settled in Xiaohongshu in March 2023, there were not many brands settled in, but from the second half of 2023, with the expansion of Xiaohongshu's live broadcast volume and the acceleration of brand entry, this situation has gradually improved, and the category selection pool and buyer selection center have become increasingly rich. However, the aforementioned Xiaohongshu maternal and child blogger believes that at present "the richness of products is still not enough", "I hope that the investment flow can be more accurate, and the merchants can expand more. Many Taobao merchants have not settled in Xiaohongshu."

In this regard, Yinshi said in an interview with the power plant and other media that Xiaohongshu live e-commerce has been developed for less than two years, and compared with other platforms, there are some links in the middle that are "not as perfect". To this end, Xiaohongshu will continue to fill in the specific pain points of merchants, buyers, and users, and solve problems according to priority.

To some extent, Xiaohongshu has an advantage that other platforms cannot match - it can monetize even with a small number of fans. The aforementioned Xiaohongshu service provider believes that this is the conclusion drawn by the brand after repeated verification, "the large number of amateur bloggers on Xiaohongshu also works." He met a blogger who posted a product placement note with only more than 600 views, but received more than a dozen private messages from users asking about the brand of the product and the purchase platform.

However, users on Bilibili have contradictory attitudes towards UP hosts, and the latter have experienced a rather tortuous process to become a salesperson. Moreover, as brands increasingly emphasize the pursuit of delivery effects, the actual revenue that UP hosts on Bilibili can generate is the key to their commercialization process.

Of course, in the face of profit goals, nothing can stop the pace of Bilibili's "big open loop" strategy. On June 18, 2024, some users jokingly called Bilibili "a shortcut to every e-commerce platform"-jumping from the splash screen ad may be faster than directly clicking on the icon of the e-commerce platform App. The other side of the ridicule is the complaint that how to balance the content ecology and commercial development has always been a difficult choice for content platforms. In this regard, Li Ni said that Bilibili has achieved an increase in advertising inventory and expanded advertising scenarios such as dynamic search on the basis of ensuring user experience and community atmosphere. "On the current basis, compared with other platforms, Bilibili's adload (ad loading rate) still has a lot of room for the future."

The strategies and choices are different, but the common point of the "second echelon" of e-commerce platforms is to move forward through trial and error and improve through development. They have no shortage of experience to learn from in order to increase the market share of a stock, but the only way to find the right path is to explore it yourself. Every big promotion now is a rehearsal for the future, whether it is the 618 shopping festival or the next Double 11 shopping festival.