Has Xiaohongshu e-commerce found its way?

As we all know, Xiaohongshu has been committed to vigorously developing in-site e-commerce in recent years. It has also been promoting anchors such as Zhang Xiaohui and Dong Jie. It has achieved remarkable results in this year's Double Eleven. However, when everyone is fighting a price war, Xiaohongshu took a risky move and told the story of brands and buyers. Let's take a look!

Xiaohongshu has finally let go and made a big leap into e-commerce. After the concept of buyers was proposed some time ago, the platform's top buyers Zhang Xiaohui and Dong Jie finally made a breakthrough in the early stage of Double 11, and both of them achieved a single live broadcast of over 100 million yuan. On a larger scale, many buyers with single-game sales exceeding one million or ten million yuan have also appeared in the platform ecosystem.

With the surge in buyers, merchants are more willing to participate. Platform data shows that as of November 12, the number of merchants participating in Xiaohongshu's e-commerce Double 11 was 4.1 times that of last year, and the number of platform orders was 3.8 times that of the same period last year.

Behind the data growth is Xiaohongshu’s remedial efforts in e-commerce infrastructure.

From product notes to buyer live broadcasts, and then to merchant store broadcasts, the three steps are the completion of Xiaohongshu's e-commerce ecosystem. Each step of exploration is inseparable from the value of Xiaohongshu's genes and ecology, just like Xiaohongshu's buyer ecology is a subset of Xiaohongshu's community ecology.

The process of improving and closing the business chain is also the process of Xiaohongshu e-commerce learning to be independent.

In 2021, Xiaohongshu cut off its external links to Taobao, and then launched the "account and store integration" strategy to attract a group of start-up brand merchants. In 2023, Xiaohongshu shut down its self-operated e-commerce business and focused its energy and resources on diversified e-commerce in the form of buyers.

During this Double 11, when other platforms were competing for prices, Xiaohongshu was telling the stories of brands and buyers. Is this the platform's wishful thinking of being different, or is it just hitting the unspeakable pain points of brands?

1. What is the difference between live streaming and selling products on Xiaohongshu?

From the outside, it seems that Gigi Lai and Dong Jie have completely opened up the pattern of buyer live streaming on Xiaohongshu.

Before the start of Double 11 this year, in mid-October, Zhang Xiaohui's second live broadcast sales on Xiaohongshu officially exceeded the 100 million yuan mark. This was also the first time that Xiaohongshu's sales exceeded 100 million yuan since it started live streaming to sell goods.

Five months ago, Gigi Leung launched her first live broadcast on Xiaohongshu. The sales of 50 million were surprising enough, which made Xiaohongshu's buyer e-commerce popular.

In the past, Xiaohongshu has always been eager to develop e-commerce, but it has not found the right direction and has been in a state of suspension.

Starting from the beginning of January this year, Dong Jie started live broadcasting on Xiaohongshu once a month. At that time, this leisurely and unhurried style was deeply rooted in people's hearts. Then Zhang Xiaohui appeared and completely helped Xiaohongshu open the door to traffic with two live broadcasts.

Xiaohongshu has found a differentiated positioning in the traditional hawking live broadcast atmosphere, laying the foundation for the platform's low-frequency, slow-paced live broadcast style. This kind of plain live broadcast that does not compete or fight, but only focuses on explaining the product features, brings a completely different sense of freshness to the audience.

Compared with the frequency of several live broadcasts a week by hosts on Douyin and Taobao, the frequency of live broadcasts by Zhang Xiaohui and Dong Jie on Xiaohongshu is more Buddhist.

Except for the top female stars, overall, the frequency of live broadcasts by Xiaohongshu buyers is not very high. Buyers with hundreds of thousands or even millions of fans have a monthly live broadcast frequency of a few to more than ten shows.

Take @王大奇奇, a fashion blogger with 141,000 fans, for example. From August to October, she had 2, 3, and 4 live broadcasts on Xiaohongshu respectively. And @文森特别鸿, a food blogger with over a million fans, had 7 and 14 live broadcasts in September and October respectively.

However, on Douyin, some accounts with less than 40,000 followers have 40 live broadcasts in less than a month. Another Hong Kong celebrity live broadcast account @郭少芸, with nearly 1.5 million followers, also has a stable frequency of 40 live broadcasts per month on Douyin.

In comparison, although the number of fans of Xiaohongshu buyers is not large, their influence is not bad. After all, the number of fans of Gigi Leung and Dong Jie is only 1.53 million and 3.3 million respectively.

Unlike traditional e-commerce platforms, where live broadcasts are driven by selling goods, Xiaohongshu’s buyer live broadcasts are unique. In the view of Xiaohongshu’s COO Conan, the idea of ​​Xiaohongshu’s e-commerce is to understand and solve the user’s segmented needs from the user’s perspective, and then link the products that fans want.

Different from the products outside the site, the products that users can buy on Xiaohongshu are not necessarily the hard currency that is well known to the public, and the core advantage is not just the price. The subtlety is that Xiaohongshu presents the value behind the product price through buyers based on user needs. These values ​​may be function, professionalism, or aesthetics and style.

Based on the different underlying logic of the products, this series of values ​​is delivered to fans and users through shopping scenes created by notes and live broadcast rooms.

During this year's Double 11, store broadcasts became a new growth engine for Xiaohongshu's e-commerce. In Xiaohongshu's definition, store broadcasts and buyer live broadcasts are of the same origin, and the value of communication cannot be ignored.

Gintoki, the person in charge of Xiaohongshu live broadcast, mentioned that when some brands do store broadcasts, the first KPI is not to sell goods, but to see whether they communicate with users and whether the product value is conveyed. A common feature is that both store owners and brands have very clear sales propositions and selling points.

This year, more brands and types of merchants joined the store broadcast. In the past, the people sitting in front of the screen were mostly real brand managers or brand designers, but now more store broadcasters are full-time employees of the brand. This is a major signal and change in the Xiaohongshu e-commerce ecosystem.

2. E-commerce Ecosystem Trilogy

Xiaohongshu is good at independent thinking and taking unconventional paths. It has been exploring the e-commerce industry for nearly a decade.

Today, Xiaohongshu's business volume has reached tens of billions, and merchants have a complete business chain on Xiaohongshu. Buyer live broadcasts represented by Dong Jie and Zhang Xiaohui are only part of Xiaohongshu's e-commerce closed loop. Notes, live broadcasts, and store broadcasts together compose the business trilogy of Xiaohongshu.

Since the first half of this year, Xiaohongshu has been busy adjusting its organizational structure to allow e-commerce to slowly surface.

First, in March, "LatePost" reported that the live broadcast business, which was previously under the business group of the second-level department under the community department, was upgraded to an independent department. The live broadcast content and live broadcast e-commerce are no longer managed separately. The head of the new department is Gintoki (nickname).

At this time, it had only been one month since Dong Jie ended the 6-hour live broadcast with over 2.2 million viewers and a single-show GMV exceeding 30 million.

After the new live broadcast department was established, Gigi Lai made her smooth debut, which completely set the tone for Xiaohongshu's "buyer live broadcast".

Xiaohongshu's thinking and layout for e-commerce are not limited to this. Soon after, the "Notes with Goods" function was fully launched. This means that previously only store merchant accounts could link products in notes. After the new function is launched, individuals and bloggers can publish linked notes.

A huge change is that, unlike the "Product Notes" function launched in 2022, under the "Notes Bringing Goods" function, the cooperation and settlement model between merchants and influencers will be taken to a higher level. Merchants and influencers will settle the cooperation fees in the form of commissions, while the previous "Product Notes" were advertising fees, taking the brand promotion route.

The launch of the "Notes Bring Goods" function has completely turned the grass-seeding notes into a sales channel, which represents another closed loop in the transaction chain of Xiaohongshu. For influencers, it can reduce their reliance on advertising and provide them with an additional survival path.

From "notes to conversions", from the perspective of the platform, this is actually a kind of self-protection that is unwilling to be a wedding dress for others. Xiaohongshu has a superior grass-planting gene. Data released by Tianfeng Securities in 2022 showed that 60% of Xiaohongshu's traffic came from search pages, and 90% of Xiaohongshu users searched on Xiaohongshu before purchasing.

This also means that if transactions can be closed within the Xiaohongshu platform, the conversion rate of content seeding will have great potential.

Zhadian Dairy, a dairy company in Yunnan, has rapidly increased its sales by posting links in its notes. In just a few months, it has become a local dairy brand with monthly sales of one million on Xiaohongshu.

In Xiaohongshu’s current complete business chain, notes are only one of the important areas. Creating an account and posting notes is only the first step. The next step is to find buyers who match the brand’s aesthetics and tone to do live broadcasts. After cooperating with buyers, you can then enter the store broadcast to achieve stable operations. A complete business chain is completed.

3. Brand asset accumulation

For brands and merchants, joining Xiaohongshu not only brings an increase in actual sales, but Xiaohongshu e-commerce also has unique value that other platforms do not have.

Gedu is one of the brands on the Focus30 brand list of Xiaohongshu this year. It is also an original furniture design brand that has been established for 9 years. Founder Chai Xiaodong recalled that since the brand was invited by the platform to open a Xiaohongshu store in early March this year, it has gone through 6 stages in half a year and achieved a closed sales loop.

This is a process of deep integration of brand and platform.

Before opening a store on Xiaohongshu, Gedu’s sales on Xiaohongshu were 0. As of September this year, Xiaohongshu’s sales have accounted for 40% of the total online sales.

Gedu has its own brand concept and the lifestyle it advocates. In the past six months, Gedu has been looking for buyers suitable for the platform through the core users of the brand and interacting with fans. When new products are developed, Gedu will also choose to publish them on Xiaohongshu, and adjust product design details and production in a timely manner based on the feedback of Xiaohongshu users.

After the test and adjustment are completed, the next step is to work with buyers to create a hit product on the platform. After the first cooperation with @野柿子小姐 blew up the live broadcast room, Gedu reached a strategic cooperation with the 野柿子 team. The two parties decided to jointly develop products needed by the fan group and incorporate the pain points and needs of the products.

The effect of the cooperation is very good. For example, a Moxian sofa, which was first broadcast live in September, became the best-selling product of that live broadcast. So far, the brand's own content matrix has been formed, new users continue to come in, and the stickiness of old users is getting higher and higher.

In the process of close integration between the brand and the platform, Chai Xiaodong gradually realized the unique charm of Xiaohongshu. In the past, when doing e-commerce, the focus was on selling goods. It was difficult for brands to communicate and exchange ideas with users about their products, and it was also difficult for users to feel the warmth of the brand.

For example, before a product is launched on the market, it has to go through dozens of trials, but these cannot be presented on the product details page. Xiaohongshu is different, as it can present the three-dimensionality and richness of the brand, which is very different from the purpose of traditional platforms for trading and bringing goods.

In the view of He Yi, founder of the oriental herbal sustainable skincare and lifestyle brand "Eastern Beast", Xiaohongshu looks at products and brands from a buyer's perspective, rather than positioning them in one sentence or piling up selling points. The biggest difference of Xiaohongshu lies in the diversity and multiple touchpoints of product expression.

Moreover, the efforts made by brands on Xiaohongshu will eventually be accumulated into brand assets. Whether it is commercialization or seeding, note content or self-broadcasting in private domains, they can be reused continuously to generate compound interest. And users all have asset value, including search, which can also be linked to assets.

The platform's overall population assets - KOLs and buyers with consistent values, as well as the high-net-worth customers attracted by them, are the value of Xiaohongshu that East Beast values ​​most. In the future, the brand hopes to see more visible population portraits on the platform.

Perhaps, this is also the expectation of all brands.

Author: Li Huan

WeChat public account: New-Daybreak (ID: new-daybreak)