Merchants trapped in traffic flock to Xiaohongshu

A large number of businesses have flocked to Xiaohongshu, either to save themselves or to seek new growth points. Why can Xiaohongshu still attract a large number of businesses in today's fierce traffic war? How should brands plan for Xiaohongshu?

"Xiaohongshu is the only platform that is not losing money at the moment," Yang Shen, founder of whoscase mobile phone cases, told Morketing.

"I plan to switch to Xiaohongshu this year," anchor Xixi decided.

"The live broadcast atmosphere on Xiaohongshu is quite different," netizen Xiao Huan told Morketing.

When the communication chain of "merchants-anchors-consumers" forms a complete closed loop on Xiaohongshu, a new battle for traffic begins.

1. Newcomers take the lead, and big brands follow suit

In the past year, Xiaohongshu has accelerated its pace of commercialization, from setting up the live broadcast business group as an independent first-level department to integrating the e-commerce business and the live broadcast business into a first-level department parallel to the community department and the business department. Xiaohongshu has finally opened the "door" to the community and started to seriously engage in e-commerce and live broadcasting.

When e-commerce platforms competed with each other for low prices and anchors were anxious about reaching their peak traffic, Xiaohongshu achieved very good results with a "peaceful time" attitude: in February, Dong Jie's first live broadcast GMV exceeded 30 million; in May, Zhang Xiaohui's first live broadcast GMV exceeded 50 million; in October, Zhang Xiaohui's live broadcast sales exceeded 100 million; in November, Dong Jie's Xiaohongshu live broadcast during the Double Eleven period was watched by more than 2.07 million people, facilitating a transaction volume of 130 million...

According to the development law of live broadcast, after a dormant period and the attraction of celebrities, a large number of anchors will emerge and compete for the top spots. Xiaohongshu is currently in this stage. Therefore, a large number of businesses have flocked to Xiaohongshu, either to save themselves or to seek new growth points.

According to Morketing's observation, the pattern presented by Xiaohongshu's live broadcast is that emerging brands and small and medium-sized businesses are constantly charging forward, and big brands and well-known businesses are also starting to make money.

On the one hand, the live streaming groups are currently mainly concentrated in emerging brands, small and medium-sized businesses and some independent buyers. The products are mostly clothing, accessories, books, flowers, tableware, mobile phone cases and other categories that women are more interested in. And these brands all have strong personality characteristics.

Well-known brands include "The Beast of the East", an oriental herbal sustainable skincare and lifestyle brand founded in 2020, "Grado", an original design furniture brand, "Soft Mountains", a handmade silverware brand focused on exploring the beauty of tradition, "Linhuanying", an independent designer new Chinese brand named after the designer Lin Huanying, and "simple pieces", which is committed to providing Chinese women with "careful trouser solutions"...

Xiaohongshu platform is still very friendly to small and medium-sized businesses. They have proposed the concept of "traffic equality". The distribution logic of Xiaohongshu is not to distribute content according to the number of blogger fans, but according to the popularity of the note.

As the handmade silver jewelry brand Soft Mountains said: "For brands with smaller teams and immature development, Xiaohongshu provides a cost-effective e-commerce sales channel and a fairer product display opportunity, allowing brands to invest more costs and energy in design itself."

On the other hand, more and more big brands are starting to develop Xiaohongshu e-commerce.

In the 24 annual beauty and skincare selected brand cases compiled by Xiaohongshu last year, Morketing observed that many brands have already taken advantage of Xiaohongshu live streaming. For example, Afu Essential Oils has previously cooperated with Dong Jie to achieve closed-loop celebrity live streaming on the site. According to official data, Dong Jie's sales on the first day of the show exceeded 1 million, and her Tmall store product sales reached 2 million within 3 days, ranking first in the total sales of beauty and skincare brands on the site.

Ninebot told Morketing: "For us, Xiaohongshu is a platform where we will focus our marketing efforts for a long time. This is because the content on Xiaohongshu is authentic and useful, and it has a large number of high-quality female users who love to share and are often the main force in consumer decision-making. Xiaohongshu live broadcasts and other platforms now seem to have different styles, and we will certainly join in to meet the needs of users. We hope that from brand live broadcasts to e-commerce live broadcasts, brands and platforms will develop together."

Kärcher, a cleaning brand founded in Germany in 1935, has also achieved good results on Xiaohongshu, solving the problem of C-end public's perception of the brand and tapping into the deep value of the Kärcher brand.

2. Xiaohongshu is popular for making money by “standing”

Morketing believes that the fact that Xiaohongshu can still attract a large number of merchants today when the battle for traffic is so intense has a lot to do with Xiaohongshu's unique live broadcast atmosphere.

The live broadcast of Xiaohongshu is a typical slow live broadcast. When you open a live broadcast room at random, you will find that most of the hosts are quietly talking about products and content. There are almost no hosts talking about mechanisms and benefits. Some even don’t speak at all. For example, a blogger who sells potted plants can buy the products by showing the link while singing. There are also book merchants who create a beautiful scene. The hosts only need to read books quietly, and the assistants in the comment area will help the audience find books.

There is no need to make a fool of oneself to attract attention, and no need to shout loudly to attract traffic. Xiaohongshu is popular for making money "while standing" (as opposed to making money "by kneeling and licking one's boots"). This is very close to the overall community atmosphere of Xiaohongshu.

This is positive for users, merchants, and the platform itself.

For users, this kind of atmosphere is what they are used to. Xiaohongshu has been a "life guide" platform since it started with pictures and texts. Live streaming is just a change in the way of communication.

Many users can also directly change their identities and become buyers. For example, "Yike KK", a top anchor on Xiaohongshu, is a reverse salesperson. She was a reporter before. Later, she became popular for sharing her home furnishings on Xiaohongshu. Many fans asked her where she bought the furniture and how to match the decoration. So she naturally became a buyer on Xiaohongshu and started to share some experiences and products with everyone in the live broadcast.

There are many such cases, and the UGC attribute is one of Xiaohongshu’s biggest advantages and resources.

For businesses, such an atmosphere is more conducive to retention and conversion .

Users always need high-quality content and products. The same reason why JD.com's live broadcast room became popular last year. Consumers have long been accustomed to the anchor's words. For non-essential products, these words are undoubtedly numb and uninteresting. Most of the products promoted on Xiaohongshu are not essential, so where is the growth value? Emotion and content.

The two examples of potted plants and books mentioned above are actually creating emotions and conveying a relaxed and comfortable lifestyle. In this regard, Yi Nengjing's live broadcast room is very representative. Many consumers come to her for her image as a caring big sister. When she resonates with consumers, consumers will naturally project their emotions onto the products she recommends.

Then the added value of the content is also the key point of conversion. The food anchor "Vincent is very hungry" studied at the French Le Cordon Bleu Culinary Institute and graduated with first place in cooking; the home buyer "Miss Wild Persimmon" previously had her own home brand and would share many designer concepts in the live broadcast room.

Whoscase founder Yang Shen also mentioned in an interview with Morketing: "Although Xiaohongshu has a low number of viewers, it has a high conversion rate, high average order value, high repurchase rate, and low return rate. And as long as the product has a selling point and good quality, the repurchase rate will increase."

For the platform, this is a fundamental approach that does not harm the foundation.

Xiaohongshu has not been fully commercialized before, probably because it is weighing the impact of commercialization on the community, so they need to find a different path from previous e-commerce.

As Xiaohongshu COO Conan said: "For Xiaohongshu, we can only build along the native needs and links in the community that we really see and feel. It has its own rhythm and rules of ecological growth, which is our core reference system. The company does not particularly worry about the issue of speed. Although building a community business system is indeed challenging, this is the only way to make it more native and better integrated into the community. There is no other way."

3. The best way to layout Xiaohongshu

So what are the most important "knowledge points" that brands need to master when deploying Xiaohongshu?

On the one hand, we should make full use of the grass-roots . The biggest advantage of the Xiaohongshu platform is grass-roots. To do e-commerce live broadcast on this platform, we must understand that 1+1>2.

Take the skincare and lifestyle brand "Eastern Beast" as an example. Before the brand was officially launched, Eastern Beast entered Xiaohongshu, and the first three articles published received very efficient exposure. The brand founder He Yi described Xiaohongshu as a platform that provided great support from 0 to 0.5.

Many seed users, and even some key partners, got to know the East Beast, which had no brand foundation at the time, after seeing content on Xiaohongshu. When Zhang Xiaohui first live-streamed the East Beast on Xiaohongshu, many people posted notes saying that they were attracted to it, which further boosted the sales and popularity of the East Beast.

In addition, some small tips can also help brands grow better on Xiaohongshu.

The Beast of the East: "We try to combine self-broadcasting with offline activities to further tell the brand culture to the precise customer groups of Xiaohongshu."

Zhadian Dairy: "Corporate accounts should be personalized and content-based, avoid being too commercial, and form effective interactions with users. Selling goods is incidental, not the only purpose."

Simple pieces: "The team responsible for Xiaohongshu are deep users of Xiaohongshu. They have a deep understanding of it, rather than hiring a new media operator to think abstractly about what Xiaohongshu should do. Notebook sales, influencer sales, and store self-broadcasting should be done at the same time. New supporting teams should be added in a timely manner according to sales trends."

Kahn: "We set up a separate operations department based on the characteristics of the Xiaohongshu platform, selected the people who are most suitable for Xiaohongshu and can empathize with Xiaohongshu users to operate it, and gave the team members ample space for operation and trial and error."

IV. Conclusion

As Cai Hong, Chief Marketing Officer of Kraft Heinz China, summarized in an interview with Morketing: "Each platform attribute has a tendency towards commercialization and branding. To some extent, we will sacrifice a lot of brand tone on some platforms. But Xiaohongshu is still in a development stage, and that is why there are many things worth exploring."

Author: Tiana

Source: WeChat public account "Morketing (ID: Morketing)"