Seven predictions about Xiaohongshu’s “buyer e-commerce”

What opportunities might the "buyer-based e-commerce" mentioned by Xiaohongshu have in the future? What development path might it take? In this article, the author makes seven predictions about Xiaohongshu's buyer-based e-commerce. Let's take a look.

Zhang Xiaohui mentioned during the live broadcast: " If I were 20 years old now, I would be a buyer for Xiaohongshu. "

Buyers have always been a very mysterious profession. In the eyes of ordinary people, they are fashion tourists traveling around the world and fashion experts who are adept at all kinds of matching. Some people even give them the same filter as the financial circle, "millions of dollars in a minute." In fact, buyers are more like purchases, and their "businessman" identity is stronger. They conduct market research, data collation, business negotiations, group purchases, etc. every day.

What kind of collision will occur if all buyers are put on one platform for unified operation? Not long ago, Xiaohongshu proposed the buyer-based e-commerce, which is being put into practice.

As someone who has been in the Xiaohongshu circle for many years, Party A Finance has objectively analyzed several predictions about Xiaohongshu's "buyer-based e-commerce".

1. The average customer spending is high enough

The high average order value should be the core competitiveness of Xiaohongshu's buyer e-commerce, which distinguishes it from Douyin, Kuaishou, and Taobao.

Kevin Kelly mentioned the famous "1,000 Hardcore Fans Theory" in "Out of Control". The high-customer-unit-price industries are all composed of 20% of user groups, which contribute 80% of sales. Now high-customer-unit-price brands are very common on Xiaohongshu; the luxury industry also likes Xiaohongshu the most when it comes to advertising. The "first generation of socialites" live broadcast debut with a customer unit price of 596 yuan also indirectly verifies that Xiaohongshu has a fixed 20% high-consumption group.

In addition, the female group on Xiaohongshu is more easily influenced by the "strong trend" of high-priced products, and is more intuitive in evaluating high-priced products through pictures, texts and videos. Recently, Douyin e-commerce supports free commissions for pictures and texts, which also shows that the grass-planting model of pictures and texts is still powerful.

The most important thing is that Xiaohongshu’s mechanism of planting grass, pulling grass, clearing mines after ordinary people’s purchase, and Amway is more complete, so good products will be accepted even if they are a little more expensive.

2. The brand of the person in charge will grow on Xiaohongshu

Compared with the commercial brands of Douyin and Taobao, Xiaohongshu provides more fertile ground for the growth of brands managed by people with personality and aesthetic taste.

Because Xiaohongshu's community is precisely matched with fashion, "fashion", as Xiaohongshu's strong content, has always been among the top three categories most mentioned by users. The development of buyer-based e-commerce has provided brand managers with a way to promote their designs, and their fashion insights have been empathized by consumers. Xiaohongshu can open up the "last mile" between brand managers and consumers.

Moreover, users on Xiaohongshu have strong purchasing power and are willing to pay for designs. For example, the clothing brands HIDEMI, Zhizhi, COSY COZY, and MSMIN that appear in Dong Jie's live broadcast room are all independent Chinese designer brands. Now HIDEMI and Zhizhi are showing signs of becoming popular.

3. Niche brands can be saved by buyers

Someone has said before that Xiaohongshu is a tool for discovering niche brands.

This is because Xiaohongshu's niche vertical group accounts are watched by both targeted and general groups. Niche fragrances, niche beauty products, niche women's clothing, niche men's clothing, niche accessories, etc. are all shared by people, and these people are niche buyers.

Moreover, buyers’ sharing of niche products is not mindless recommendation. The originator of a niche brand, theordinary skincare products, which mainly promotes explosive news, grew up on Xiaohongshu. It is the "ancestor" of the ingredient party in the current skincare circle. In fact, it was the group of people who dug up the ingredients of the ordinary on Xiaohongshu that evolved into the later "ingredient party". The ordinary brand has experienced many changes such as the death of its founder and the cessation of operations, but it has never been depressed and has its own core audience circle. Xiaohongshu has played a huge role in this.

By the way, niche brands are more dependent on buyers’ aesthetic tastes, and different people have different opinions. On mass platforms, it is completely algorithmic recommendation, and niche aesthetics cannot be effectively reflected. However, in addition to algorithmic recommendations, Xiaohongshu also has editorial screening, which can also play a certain role in equalizing the rights of niche circles.

4. Buyer anchors will become a new way for anchors to compete internally

Buyers used to be the "anchors" in the offline era. It is true that the platforms used to be business districts and the live broadcast rooms were the buyers' stores.

Xiaohongshu’s current positioning is to enter the market by discovering and cultivating mid-level anchors (buyers) on its own platform and matching them with small and medium-sized brands (new brands).

The biggest feature of buyer anchors is their professionalism. According to the characteristics of buyer-based e-commerce, some buyer anchors can accurately introduce affordable luxury women's bags priced between 1,000 and 5,000 yuan, some are good at introducing accessories from designer brands, some are good at promoting famous watches worth tens of thousands of yuan, and some are good at introducing the outfits and fabrics of clothing brands above a thousand yuan level. Everyone has their own duties.

For example, Party A Finance observed that on Xiaohongshu, some buyer stores are already selling skirts of the brand Zimmerman. Zimmerman was made popular by Princess Kate and has unique color prints. Ordinary people may think that these color prints are good-looking but they don’t know how to match them. However, with the live broadcast of the buyer store and the introduction of the buyer, a skirt worth thousands of yuan can easily be accepted by high-priced customers.

Therefore, for professional buyer anchors, the control of trends is clearer. A Xiaohongshu blogger with good aesthetics and frequent updates can carry the function of a buyer store. Consumers no longer need to go out to be exposed to many trendy brands with emotional memories.

5. The development speed of Xiaohongshu buyer-based e-commerce will not be that fast

Xiaohongshu has always been developing slowly, and many actions have emerged naturally with the development of the community. Buyers are indeed more accurate. For example, the live broadcasts of Dong Jie, Zhang Jingchu, and Zhang Xiaohui are actually carried out in an orderly manner, so Xiaohongshu will not be able to incubate buyer-based e-commerce very quickly.

Secondly, the selection, trial and selling point extraction of buyers’ live broadcasts are more complicated than those of fast-moving consumer goods, which also restricts the development speed of Xiaohongshu. For example, if you want to sell some designer brands, the designer’s own delivery speed is not that fast, and there may be only a few new products in a quarter, unlike Zara and Uniqlo, which can release thousands of new products in two weeks. Currently, there are only a few anchors who have become popular on Xiaohongshu, such as Dong Jie, Zhang Jingchu, and Zhang Xiaohui, which is not as fast as the rollout of live broadcasts on Douyin.

The most important thing is that buyer-based e-commerce sells products by "exporting lifestyles". For example, when Zhang Xiaohui is live-streaming, she can tell a story about everything from toiletries to clothing, which includes her understanding of brands and life. This leads to slow output efficiency and slow acceptance efficiency, so Xiaohongshu's attempt to directly speed up the commercialization process through buyer-based e-commerce is unlikely to be very effective, but there is still hope for expanding the commercialization base.

6. There will be many more non-standard products and personalized customizations. Pay attention to the community safety of Xiaohongshu

Another difference in products between buyer-based e-commerce, interest-based e-commerce and trust-based e-commerce is that there will be many more non-standard products and much more customization.

In buyer-based e-commerce, in addition to the sales of some designer brands, sometimes the products provided by buyers may be one-to-one. In this case, the platform's supervision must keep up.

A friend who often hangs out in boutiques told Party A that it is not easy to prove that she bought fakes or the quality of the goods she bought in the boutiques did not meet her requirements. Generally, boutiques do not accept returns or exchanges. She once bought a piece of clothing from a luxury brand and felt that the workmanship was particularly poor. She could not find this piece of clothing on Xiaohongshu or other social media, so she suspected that it was a counterfeit. The boutique said it was a show model but could not provide photos of which show it was from. She sent it to the China Inspection and Quarantine Agency, which said that "there are too few signs that can be tested and it is impossible to determine whether it is real or fake."

Therefore, as the buyer-based e-commerce platform expands, if the customization needs of buyer-based e-commerce increase, how to ensure product quality and consumer rights is also a problem that Xiaohongshu should think about and solve.

7. Does Xiaohongshu cultivate buyers? In fact, it is the community environment that cultivates buyers

According to Xiaohongshu's official statement, Xiaohongshu will invest a lot of resources to support the training and development of Xiaohongshu buyers in the future. However, it is not realistic to train "buyers" by the platform, just like the top scorers in the college entrance examination are never made up by "remedial classes".

First, buyers make their living by fashion sense, and Xiaohongshu’s investment can only be to dig out the fashion environment of first-line designers, which is the atmosphere for cultivating buyers. A fashion industry practitioner said that you can’t cultivate a forward-looking fashion sense by relying on the community environment of Xiaohongshu. You need to pay attention to each fashion week and watch more shows to know what the color combination of the next season is and what the trend of the next year is. You can appreciate it after watching more and then post it on Xiaohongshu.

Secondly, the incentives of buyers are different from those of creators. The results of their product selection will be reflected in the operational data. Whether they select a bunch of garbage or a bunch of treasures will affect the buyer's voice and future. How Xiaohongshu balances this remains to be considered.

Third, Xiaohongshu needs to create fair and just rules for buyers. For example, the e-commerce anchors of Douyin and Kuaishou have formed a higher conversion rate, and the live broadcast room has more exposure opportunities. This is a mature game rule. Xiaohongshu is not doing e-commerce entirely for charity. It will formulate rules that benefit buyers, how to show the incremental value of content, and how to explore the supply and demand relationship through content. These are all yet to be laid out.

As mentioned above, the prospect of Xiaohongshu's "buyer-based e-commerce" is bright, which is in line with the consumption concept of young people who pursue quality and appearance. It is a good move in the current competitive e-commerce market. However, the game is not over yet. How to use the community and user accumulation over the past 10 years, combined with the role of "buyer", to create a buyer-based e-commerce building with compliance as the bottom, high conversion and high sales as the pillars, and personalization as the top, Xiaohongshu still needs to make some efforts.

Chief Writer: Huanjie; Article Architect: Miaomiao

Source: Party A Finance (ID: jiafangcaijing2019). I hope there is no Party A dad in the world who wastes money in vain.