Let’s talk about Xiaohongshu e-commerce again: Breaking the law of “old wine in new bottles” in community e-commerce

This article describes the current situation of domestic community e-commerce and Xiaohongshu’s unique community e-commerce environment, and analyzes the key parts of Xiaohongshu’s “native” marketing. It is suitable for friends in the e-commerce marketing track to read.

I remember two years ago, I was discussing the e-commerce industry with a senior industry insider, and he made a "bold statement": There are no successful cases of Chinese community platforms doing e-commerce. I was a little surprised, because at that time, short video platforms were already doing e-commerce very well, and many graphic communities were also doing e-commerce, and the paper data was still quite good. However, this friend said that those were "simple combinations of content platforms and e-commerce", using new bottles to put old wine, and there was no real integration of the two. Specifically:

• Take the live streaming e-commerce, which was already very popular at the time, for example. In a 2-3 hour live broadcast, the top anchors would often talk about more than 50 products, and each product was only given 3 minutes to explain. What "content" could be covered in such a short time? People were only paying attention to the big sales of big-name products that they were already familiar with.
• As for the sales of small and medium-sized anchors and short videos, they are still mainly "impulsive consumption" to a large extent, with low customer unit prices and high return rates, which are essentially unrelated to the content. Such impulsive sales are essentially outside the platform's content genes and are no different from simple and crude information flow ads.
• As for the promotion of products on most graphic and text platforms, it is even more abrupt. The creators and platforms have no experience in how to organically combine content with products. The final effect is just a not-so-clever product placement, and its conversion rate and sustainability are quite questionable.

I have to accept the above view. Over the years, I have seen almost all content platforms talking about "bringing goods" and "e-commerce closed loop", but only a handful of them have really done it well. The only clear stream among them is Xiaohongshu - as a light user of Xiaohongshu, I have developed the habit of reading shopping notes on it before going to bed. Recently, I saw the conversation between Xiaohongshu COO Conan and Geek Park, which gave me a deeper understanding of Xiaohongshu's e-commerce and even the overall commercialization concept.

During the conversation, Conan mentioned something that touched me: Xiaohongshu is a community. People have always had two doubts about the community. The first is that the community cannot grow, and the second is that it is difficult for the community to make money. However, Xiaohongshu believes that community and business are not contradictory, and a prosperous business ecosystem can grow. Many brand merchants want to operate for a longer period of time, which means being able to establish connections with consumers and directly hear their voices. At the beginning, merchants only focused on reaching the user base on a large scale; slowly, they began to think about how to accumulate users more stably and build user assets. What Xiaohongshu wants to do is to help everyone better operate in the long term and build Xiaohongshu's "native" business system.

I am not a Xiaohongshu creator, but two things left a deep impression on me: first, the threshold for Xiaohongshu creators to realize their business is extremely low, and creators with hundreds or thousands of fans can receive good business orders; second, Xiaohongshu's commercial content is indeed based on "content", introducing products or brands in a narrating manner, which is in sharp contrast to the "oppressive sales" popular on other content platforms. This is what Conan said about the "nativeness" of the business ecosystem to the Xiaohongshu community!

Let me give you a vivid example: I recently assembled a NAS private cloud at home to store personal data and audio and video libraries. I had planned everything, but I didn't expect the huge noise caused by the operation of NAS. I searched for relevant answers on major e-commerce platforms, forums, and Zhihu, but couldn't find a silent solution that suits me. I was helpless and thought of Xiaohongshu. I didn't expect to find two or three practical solutions immediately. One of the creators made a "acrylic soundproof mini cabinet" that I liked. I am asking him if he has it for sale and how the heat dissipation performance is. You know, digital 3C has never been considered the strength of Xiaohongshu, but I solved my own digital 3C problem here!

The legendary Xiaohongshu NAS cabinet recommendation notes. But to be honest, the heat dissipation of acrylic cabinets is a problem that needs to be properly solved before it can be used on a large scale.

To put it in a fashionable way, I was attracted by the "acrylic soundproof cabinet" on Xiaohongshu. In fact, the concept of "grass planting" originated from Xiaohongshu, which originally refers to a new generation marketing method based on real content. Therefore, "grass planting" must be native to the community and centered on authenticity. Now mainstream e-commerce platforms are emphasizing "grass planting and weeding integration". They first occupied the "weeding" link and moved towards the upstream "grass planting"; Xiaohongshu first occupied the "grass planting" mentality and is actively developing "weeding". Both of these paths are correct and feasible, but Xiaohongshu's path is obviously more dependent on its community attributes. In other words, in the "people-goods-field" iron triangle of e-commerce, Xiaohongshu takes "people" as the starting point, relies on "people" to establish a "field", and then fills this "field" with more and more "goods".

Currently, Xiaohongshu is working on, first, strengthening the scientific and quantifiable nature of the promotion, and second, opening up the supply chain and introducing more merchants. Since the beginning of this year, the above development strategy has achieved phased results, and it is no longer the "community that does not make money but earns publicity" in everyone's stereotype. This is particularly evident in the following aspects:

• The role of e-commerce buyers on Xiaohongshu has become a new profession in the e-commerce industry. In addition to buyers Zhang Xiaohui and Dong Jie, whose GMVs for a single Xiaohongshu live broadcast exceeded 100 million, a large number of buyers with GMVs of several million or tens of millions have emerged. Xiaohongshu buyers have attracted widespread attention from the outside world with their non-oppressive live broadcast style.
• During this year's Double 11, the number of Xiaohongshu's e-commerce orders was 3.8 times that of the same period last year, the number of participating merchants was 4.1 times that of the same period last year, and the GMV of the live broadcast room was 4.2 times that of the same period last year. It is no exaggeration to say that this year's Double 11 marks that Xiaohongshu has officially taken its place at the table of the retail e-commerce industry.
• According to third-party data, Xiaohongshu live streaming sales have the characteristics of "three highs and one low", namely high customer unit price, high conversion rate, high repurchase rate, and low return rate, which is in sharp contrast with traditional live streaming sales. Therefore, the "gold content" of Xiaohongshu's e-commerce data is higher than it seems on the surface.

There are two key roles in Xiaohongshu e-commerce: "buyers" and "managers". The former is the creator who communicates between brands and consumers, and the latter is the person in charge and creator of the brand (often designer brands, D2C fashion brands, etc.). Both roles are inseparable from "content creation", and they are content creation with tone, warmth, and community native. Therefore, we can understand why compared with similar platforms, Xiaohongshu e-commerce has a significantly higher average order value and a significantly lower return rate: on the one hand, it is due to the sense of trust brought by real content; on the other hand, consumption is based on deep understanding rather than impulse, and the actual effect is naturally improved.

Looking ahead, the next stage of development path of Xiaohongshu e-commerce was clearly stated in Conan’s interview. I think there are two points that I am most looking forward to and optimistic about:

The first is search. We know that search is the most important user entrance and monetization source for all e-commerce platforms. Now, 70% of Xiaohongshu's monthly active users use search, and 1/3 of monthly active users go straight to search when they open Xiaohongshu. Some people jokingly call Xiaohongshu the "real version of GPT", and the fact proves that this title is not in vain. If the search is done well and the coverage is expanded, it will undoubtedly further improve the efficiency of e-commerce content reaching users. Take me for example, I found a new world by searching for "NAS noise reduction". From this perspective, it is actually not wrong to say that Xiaohongshu is a "new generation" search engine.

The second is some very segmented vertical products that are being hatched from Xiaohongshu. For example, there is a store on the Xiaohongshu platform that has been very popular recently, which sells customized "pet felt" - users can send photos or videos of their pets to the store owner, and he will customize very cute pet image felt for you. The comment area of ​​this store shows that the orders have been scheduled for several months! Such segmented vertical categories were difficult to imagine before, and the community native content of Xiaohongshu can give birth to such categories. Thinking from another angle, the NAS noise reduction cabinet I am consulting is not a segmented vertical category? It may not be difficult to simply find such a cabinet, but if you want to find a high-value cabinet that is quite ornamental in the living room, you can only find it on Xiaohongshu.

From a broader perspective, Xiaohongshu's "community native content" atmosphere is not only a unique advantage for e-commerce, but also a unique advantage for commercialization as a whole. Like any content platform, Xiaohongshu's commercialization is not limited to the e-commerce closed loop (i.e. "grass planting and weeding integration"), but also includes traditional advertising business (i.e. "grass planting" in the general sense). As long as the commercial content and the community are organically integrated, not abrupt, and give users a sense of trust, then whether it is through the e-commerce closed loop monetization, or jump to the third-party platform's performance advertising, or pure product promotion advertising, it will be effective in occupying the user's mind.

By the way, in this interview, when faced with the question "Is Xiaohongshu a slow company?", Conan's answer was very insightful: "The community has its own nativeness and growth. You must follow its native direction to better meet native needs. What does faster mean? It means to 'graft' as soon as possible. Grafted things are the fastest, but they may not be suitable for us, nor may they really meet the real needs of the native ecosystem. I think it is indeed challenging to build a community business system, but this is the only way to make it more native and better integrated into the community. There is no better way."

This probably explains why other community platforms often simply “patchwork” or “old wine in new bottles” when doing e-commerce, while Xiaohongshu’s e-commerce and even commercialization can be integrated with the community atmosphere. Of course, this process will not be a one-time thing, and we must carefully maintain balance and efficiency. I hope Xiaohongshu can do this well in the future.

Author: Pei Pei, leader of the Phantom Thieves

Source: WeChat public account "Internet Phantom Thieves" (ID: TMTphantom)