Xiaohongshu's local life is still playing with the ticket period

At present, the popularity of group buying has not diminished at all, and Xiaohongshu has also joined this track. So what are the characteristics of Xiaohongshu group buying? How to convert grass into grass? What is the development trend? The author of this article gives a detailed analysis. Let's read it together.

In just a few months, the flame of the Hundred Regiments Campaign has already burned in the local life track. As one of the latecomers, Xiaohongshu is also trying to catch up through frequent official operations.

Following the internal testing of the group buying function at the end of April this year, Xiaohongshu announced the launch of the store exploration cooperation center on July 18. The first batch of cities open for the store exploration cooperation internal testing include Beijing, Shanghai, Guangzhou and Shenzhen.

It is reported that the Store Exploration Cooperation Center is a transaction cooperation service platform specially launched by Xiaohongshu for the local life track. The official said that the goal is to provide more business possibilities for bloggers who love store exploration.

Compared with Xiaohongshu's barely launched store exploration center, Douyin and Kuaishou's offensive pace on local life is more intense, while the "old player" Meituan has stepped up its defense.

Screenshot of Xiaohongshu

Douyin APP has tested a new version of the first-level traffic entry label. "Group Buying" has replaced "Same City" as the first-level traffic entry label of Douyin. In the "Group Buying" page, the "Takeout" aggregation page appeared for the first time; Kuaishou Local Life launched the "Dare to Compare Prices" service, and the official price of the participating goods and services (excluding flash sales and coupons) is lower than that of other platforms; Meituan not only launched the "Super Popular" live broadcast room, but also in the latest policy, as long as users buy vouchers on Dianping, the platform will not only return part of the 5% commission to the merchant (up to 4.4%), but also give the merchant multiple exposure clicks, retaining the merchant with the attraction of real money...

Compared with other platforms, Xiaohongshu's local life faces the same difficult problem as its own commercialization department: it can promote content but cannot drive sales.

This seems to form a paradox. Xiaohongshu is a promoter of Internet celebrity stores and can bring popularity and traffic, but it is difficult to become a distributor of Internet celebrity stores and share this piece of cake.

1. The characteristic is "expensive". Can group buying of 100 yuan attract sophisticated white-collar workers?

Expensive is the most obvious feature of local group buying on Xiaohongshu.

At present, local group buying on Xiaohongshu is mainly open to first-tier cities such as Beijing, Shanghai, Guangzhou and Shenzhen. On the group buying special page, it is difficult to find low-priced popular products with a unit price of around 9.9 yuan. The group buying catering packages in each city are also closely related to the local food culture - Shanghai brunch and Western light meals are popular, while Chaoshan hot pot and Cantonese dim sum are mostly served in Guangzhou and Shenzhen.

The homepage or note content of the merchants who have joined the group buying on Xiaohongshu has a link to the group buying discount, and users can place an order directly.

From the perspective of restaurant types, many brands have a high-end tone, with an average cost of around RMB 100 per person, and their target customers are mainly sophisticated white-collar workers , such as the Western food brand Wagas and the Cantonese tea restaurant Tao Tao Ju. Some brands will launch exclusive packages only available on Xiaohongshu to reduce the impact of price comparisons on consumers.

Some of the merchants that have settled in Xiaohongshu

As for large-scale chain restaurant brands with wider store layout and more diversified consumer groups, Xiaohongshu's local group buying has not yet penetrated deeply , but such brands have already formed a scale trend on Douyin and have become the key to brand marketing.

Take McDonald's as an example. During the pre-sale period of Double 11 last year, McDonald's sold 10-25 million yuan worth of group purchase coupons, surpassing KFC and Luckin Coffee to take the first place in Douyin's local lifestyle brand sales list. In addition to the brand's own popularity, McDonald's also offers sufficiently favorable prices on Douyin, such as buy one get one free for McMc Crispy Chicken for 13.5 yuan, and a three-piece set starting from 19 yuan.

In addition, new tea beverage brands such as Heytea, Nayuki, and Chabaidao have also launched super-low-priced online packages on Douyin, using Luckin Coffee's low-price discount strategy.

Douyin's new tea drink consumer data insight report shows that in 2022, the number and playback volume of Douyin's new tea drink related content showed a monthly increasing trend. Comparing June 2022 with January of the same year, the number of Douyin tea drink content videos increased by 58%. In June alone, the playback volume of related content exceeded 14.7 billion, and received more than 280 million likes and more than 47 million comments.

Douyin New Tea Drink Consumer Data Insight Report

Some users will use the most direct way in the video to inform that there is a promotion for a tea drink event, and that users can click the link in the lower left corner to purchase coupons . Although the routine is simple and easy to copy, the practicality of the message is obviously higher than the content of the video.

On Xiaohongshu, users' discussions about these large chain restaurant brands are often in the form of tutorials on how to get bargains, ordering strategies, taste reviews, etc. With the help of the graphic format, users will clearly list how much sugar a certain milk tea should have, what ingredients to add, and whether it should be ice-free or at room temperature. It has become a unique DIY formula.

However, compared with the natural temptation of low prices and discounts, UGC content is still less competitive. Even if bloggers share relevant strategies for local lifestyle brands on Xiaohongshu, users may eventually choose to go to Douyin or Meituan for off-site transactions due to price reasons.

2. From seeding to trading, it is still a problem

Planting grass is Xiaohongshu’s strong point, but the hurdle from planting grass to making transactions is difficult for Xiaohongshu to overcome, and this is also true in the local life sector.

There have been media reports that in the early days of the group buying function on Xiaohongshu, store bloggers did not receive any commission after posting group buying links for merchants. They could only get a free meal in exchange, and they could not see the transaction volume facilitated by the group buying links. They could only infer the sales situation by referring to the content views of the group buying notes.

This no-commission model has improved since the launch of the store exploration cooperation center. Xiaohongshu officials said that bloggers can view the commission for each order in the store exploration cooperation center. In the official screenshot, a light meal priced at 78.2 yuan shows that the commission for each order is 2.99 yuan, and the commission ratio is about 3.8%.

Xiaohongshu store exploration cooperation process

Xiao Lin, a store exploration blogger, told Yifan that he had operated a group buying account on Douyin. The commission rate of influencers depends on different categories. The commission rate in the catering industry is generally not high, ranging from 1% to 5%. The beauty and skin care industry is relatively high, and some businesses are willing to give a 30% rebate rate. However, user transactions alone cannot bring income to store exploration bloggers. The commission will only be credited after the user redeems the group purchase voucher. According to a report by Zhongtai Securities, the redemption rate of Douyin's local life push-type group purchase vouchers in 2022 will be about 50%-60%, and Meituan's redemption rate in the same period can reach about 90%.

Referring to the above sets of data, it can be seen that the commission ratio of Xiaohongshu's group purchases is basically at a normal level, but considering the transaction conditions such as the write-off rate, the income scale of Xiaohongshu's store exploration bloggers is still in its early stages.

In Xiaolin's opinion, Douyin has already established a mature cognitive system for store explorers based on commissions from purchases. If Xiaohongshu cannot come up with sufficiently attractive conditions, it will be difficult to attract a large number of store explorers to participate in the creation of local group buying content.

According to the official statement of Xiaohongshu, bloggers with more than 1,000 followers and healthy accounts can apply for store exploration cooperation permissions, which means that most amateur bloggers can join in.

Image source: Internet

Compared with inviting top bloggers to join, the cost of testing the waters in batches of amateur bloggers is relatively lower. For amateur bloggers, participating in Xiaohongshu's official activities can obtain traffic and commission support, which is also a win-win situation.

Although there is a precedent of Douyin mass-producing store explorers, Xiaolin continued to point out to Yifan that Xiaohongshu is facing more intense competition now than before. "At that time, Meituan did not think that Douyin could make a breakthrough in the local life group buying market, and there were almost no restrictions on merchants. Even Meituan itself put group buying ads on Douyin. However, now Meituan has also realized that Douyin is grabbing market share, and sometimes even suggests that merchants make a choice between the two platforms. "

During his store visits, several merchants have expressed their intention to suspend Douyin group buying for a period of time.

3. In the battle of local life, Xiaohongshu is still too slow

According to a report by iMedia Consulting, it is estimated that by 2025, the scale of the domestic local life service market will exceed 2.5 trillion yuan. In addition to first-tier and new first-tier cities, the potential of the sinking market will also be fully tapped.

This has made local life a market that Internet platforms have been vying for in recent years, and it is also one of the few markets that can see growth. In this regard, Douyin has already set a good example.

According to media reports, Douyin's local life real transaction target this year is close to 400 billion yuan. Among them, the target for in-store and hotel and travel business is 290 billion yuan, which is close to the level of Meituan's related business in 2021; the target for food delivery business is 100 billion yuan.

In response to this, the person in charge of Douyin’s life service said that the data was inaccurate.

However, Douyin's ambition for local life has obviously made Meituan feel a sense of crisis. Some merchants said that Meituan has recently lowered some commissions to attract merchants to launch "exclusive" group purchase packages only on Meituan.

The competition between Douyin and Meituan is like the flapping of a butterfly's wings, and it also affects Xiaohongshu's local life layout.

Local brands that take the internet celebrity marketing route often use content channels such as Douyin and Xiaohongshu to divert users from online to offline, ultimately promoting consumption.

Since Douyin recommends content in the form of a feed stream, the initiative lies with the platform rather than the user. Data shows that Douyin conducted multiple tests in the first half of 2022 and found that once the e-commerce content displayed by Douyin exceeds 8%, the user retention and user usage time of the main site will be significantly negatively affected.

On the other hand, Xiaohongshu can display multiple notes on one screen, so users do not feel that they are being passively pushed local life content, but this also weakens the presence of local group buying on Xiaohongshu.

"Xiaohongshu is still too Buddhist," Xiao Lin gave his own evaluation. When he first became a Douyin store exploration blogger, he had to go to different merchants almost every day to shoot store exploration videos, and the cost ranged from 200 to 500 yuan. Sometimes he would meet colleagues who were also exploring stores in different stores. But when he came to Xiaohongshu, he obviously felt that there were not enough business orders, and merchants were not enthusiastic enough about the store exploration of influencers. "Xiaohongshu has not yet run a model for commercial realization. Sometimes users will not go to this store when they see that it is a promotion. After all, the discount is not very big."

Tik Tok screenshot

According to statistics, 60% of Xiaohongshu users said that their main purpose of using Xiaohongshu is to "learn about product introductions and user experience" rather than shopping.

This seems to be a prophecy, which is reflected in different aspects of Xiaohongshu from e-commerce to local life.

However, Xiaohongshu's customer base is different from that of other platforms, and it may bring opportunities to local life businesses. However, the current speed is still not fast at the moment.

Note: Kobayashi in the article is anonymous.

Author: Thick Code

Source public account: Yifan YIFAN