With a store of 10,000 fans having monthly sales of tens of millions, how should merchants operate e-commerce on Xiaohongshu?

With a store of 10,000 fans having monthly sales of tens of millions, how should merchants operate e-commerce on Xiaohongshu?

As a new player in live streaming e-commerce that has received widespread attention this year, where has Xiaohongshu e-commerce come to now? What benchmark merchants have emerged? What are their respective characteristics?

Recently, after Xinbochang counted the best-selling stores on Xiaohongshu in March, it was found that three stores had monthly sales of over 25 million, and the sales of the top 20 stores all exceeded 10 million, mainly beauty and clothing merchants.

We have disassembled these store cases and combined them with Xiaohongshu’s recent actions to see what opportunities and challenges still exist for merchants.

Which merchants have broken through on Xiaohongshu?

According to the Xiaohongshu store sales list in March compiled by Xinbochang, the monthly sales of the top three merchants have exceeded 25 million, and the monthly sales of the merchants on the list are no less than 10 million.

After studying these stores, we can see the following two characteristics: First, from the type of stores on the list, except for the "Rudai Home Flagship Store" which is a furniture store, the other stores are all clothing, beauty and snacks. Second, from the positioning of the stores on the list, they are basically focusing on quality and the prices are not low. For example, the first-ranked "LAOBANZHOU", the lowest-priced product in the store is a camisole vest, which costs nearly three digits. So far, the number of fans of the store has reached 12,000, and most of the clothing sales have exceeded 1,000.

Also ranking in the top 20 in monthly sales, "Jiu Ma De Shop" promotes the concept of "Real Matcha in China" and produces matcha-related foods. Even though its products are not cheap, with 25 grams of matcha powder priced at 25 yuan and matcha Thousand Layers priced at 80.1 yuan, consumers are willing to pay for "tea grown in the golden producing area of ​​30° north latitude" and "100% blue windmill cream." So far, 16,000 units of the Thousand Layers have been sold.

So, what are the operating strategies of these stores?

First, shape your personality, produce high-quality notes, and drive conversions through content.

The light luxury women's clothing brand "LAOBANZHOU" mentioned in the previous article is managed by a brand manager who also runs his own personal account "Boss Zhou". The notes he updates on a daily basis are about his own fashion outfits, and the accompanying texts are also in line with the trendy "lazy feeling", "high-grade gray", "relaxed feeling" and other dressing styles popular among young women. His personal account has accumulated 161,000 followers, and the most popular note has received 11,000 likes. The release of notes and the update of clothing one after the other can also achieve good traffic conversion.

Second, create a unique brand concept and create a sense of luxury. The women's shoe brand "Yan Erding" has 93,000 fans on Xiaohongshu. It expresses its love for life with the slogan "I love my life, I live alone at this time". Every note is supplemented with exquisite copywriting while releasing new products to create a sense of luxury for the brand. So far, the best-selling shoe in the store has sold more than 10,000 units, and most of the other styles of shoes have also sold more than 1,000 units.

It can be seen that Xiaohongshu stores now follow the route of "buyer-driven, content-driven", relying on the buyer persona created by the store owner and the output of high-quality content notes to achieve the purpose of planting grass and ultimately drive conversion. Behind this is the portrayal of Xiaohongshu's unique "content + social" ecology. And what is different from other platforms is that Xiaohongshu has many female users and high user loyalty, so this kind of high-priced, high-profile stores can also break through.

From the e-commerce journey of Xiaohongshu, we can see that from the early self-operated cross-border e-commerce to live broadcast e-commerce, and then to the clear "buyer e-commerce" model, Xiaohongshu e-commerce has gradually explored its own unique style. When Xiaohongshu was first established as a sharing platform, the PDF of 7 overseas shopping guides answered many questions for all outbound shopping travelers. From this moment on, "shopping" became the foundation of Xiaohongshu. At first, Xiaohongshu attracted users who asked "how to shop overseas" and "how to find good things overseas". Compared with direct purchases, what is needed is methodology. In response to such needs, Xiaohongshu has indeed taken some measures to open a welfare club for cross-border e-commerce and have its own closed-loop business path. However, due to the high cost of self-operated cross-border e-commerce, and the presence of JD.com and Tmall in the industry at that time, Xiaohongshu's competitiveness was not strong. During the exploration, Xiaohongshu realized that in order to take the e-commerce road well, it seems that it should think more about how to play to its strengths and avoid its weaknesses. Xiaohongshu’s slogan reflects the changes in the team’s ideas over the past decade: from 2014 to 2015, it changed from “finding good things from abroad” to “becoming good things for the whole world” - obtaining a certain product is the key; from 2016 to 2018, “good things” became “good life”, and from “good life for the whole world” it evolved into “marking my life” - the “community” attribute of the platform is getting stronger and stronger, and the “human” atmosphere is getting stronger and stronger.

Nowadays, Xiaohongshu has become "young people's own Baidu Encyclopedia". According to the "2024 Xiaohongshu Search Promotion White Paper", Xiaohongshu calls itself "the user's preferred life decision search platform". As of the end of 2023, 70% of monthly active users have search behaviors, and 88% of all search behaviors are active searches. In 2023, after blowing the horn of "buyer e-commerce", Xiaohongshu ushered in the vigorous development of e-commerce. In January 2023, Dong Jie started her first live broadcast on her Xiaohongshu account. Before the live broadcast, Dong Jie had shared many of her favorite clothes and favorite items on Xiaohongshu, and also posted clips of her daily life, creating an elegant and intellectual female image, attracting many fans. Under such circumstances, it is not surprising that Dong Jie was able to achieve a GMV of 50 million in the first live broadcast, and the number of viewers in the second broadcast exceeded 2.2 million, with a GMV of more than 30 million.

Dong Jie's Xiaohongshu has become popular with consumers. In addition to the traffic brought by the particularity of her profession, the user positioning of Xiaohongshu is naturally a foundation that cannot be ignored. So, next, Gigi Lai became another top anchor of Xiaohongshu. This time, Xiaohongshu made more adequate preparations. Before Gigi Lai started broadcasting, Xiaohongshu's live broadcast account "Live Broadcast Department" and "Commercial Advertising Department" and other official departments had preheated the show, and insiders also revealed at the investment promotion meeting that Gigi Lai is a celebrity that Xiaohongshu focuses on supporting. In the end, Gigi Lai also achieved a good result of nearly one million viewers and sales of over 50 million in her first live broadcast in May 2023.

Xiaohongshu's e-commerce continues to accelerate. Today, Xiaohongshu's e-commerce is still accelerating. According to relevant reports, Xiaohongshu finally turned a profit in 2023, and its performance was also impressive: annual revenue was US$3.7 billion, an increase of 85% from US$2 billion in 2022. The key to its turnaround lies in the revenue generated by advertising and e-commerce businesses. In addition, Xiaohongshu's monthly active users reached 312 million in 2023, a year-on-year increase of 20%, making it the fastest growing social media platform in China in 2023. On April 1 this year, according to LatePost, Xiaohongshu added another general-Zhao Weichen, the former secretary of the board and general manager of corporate development and investor relations of Yika Technology (09923.HK), plans to join the platform as the head of commercialization of the Internet industry. Xiaohongshu, which continues to accelerate, has indeed brought new development opportunities for merchants and institutions. Since last year, Xiaohongshu has become a new platform that many institutions and brand merchants have paid attention to. Why are you optimistic about Xiaohongshu? First, Xiaohongshu has advantages in user groups and community ecology; second, Xiaohongshu has a decentralized traffic distribution mechanism, which allows amateurs and new entrants to obtain traffic. However, it is precisely because of this that it is destined to be difficult for merchants to start an account on Xiaohongshu. By attracting users through "useful" grass-planting notes, it precipitates into private domain fan traffic that trusts its professionalism in the field; and after the conversion to bringing goods, the selection of products is also more demanding, and it must be consistent with the buyer's own labels and content fields, and pursue quality. This also means that due to its own brand positioning problems, under the premise of high pricing, merchants must be more cautious to ensure the quality of product selection. Once negligence causes consumers to have a bad experience, the previous reputation of "high quality" may usher in a stronger backlash. Taking "久抹的茶" as an example, someone on Xiaohongshu posted a post complaining that the matcha thousand layers made by the merchant "tastes average"; and Erding's store also has many thunder-avoiding posts. When both the buyer and the seller insist on their own opinions, it is difficult to distinguish which is true and which is false.

But no matter what, this cannot stop Xiaohongshu from becoming a new battlefield for many institutions and businesses to rush to. What do you think of Xiaohongshu e-commerce? Are you in the game or are you preparing to join?

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