On the eve of 618, Xiaohongshu fully opened the "notes to bring goods"

Xiaohongshu has fully opened the "Sales Notes". This time, Xiaohongshu has finally started to seriously convert. Many creators and service providers began to sigh when they heard the news. So facing the upcoming 618, can the sales notes add fuel to the GMV of Xiaohongshu during the big promotion? Let's follow the author to read on.

"Xiaohongshu has finally started to take conversions seriously." A Xiaohongshu service provider exclaimed.

After establishing a new live broadcast department, setting up live broadcast rooms for top anchors such as Dong Jie, and vigorously developing the live broadcast sales business, Xiaohongshu e-commerce has started a new way of "sales" - "note sales". Some merchants told Yibang Power that in the new "note sales" function, brands can finally cooperate with influencers in the form of pure commissions, and no longer have only advertising as a cooperation model.

"There are more ways for influencers to monetize. Xiaohongshu has built a product pool for influencers to directly select products." According to one of the merchants, Xiaohongshu's new "notes bring goods" function is open to both merchants and influencers. Merchants can configure commissions in the background and choose suitable influencers to cooperate with note chains to bring goods. Influencers can see a product selection center and choose suitable goods and merchants through the product selection pool.

Yibang Power has learned from multiple sources that the product selection center can be seen in the background of Xiaohongshu influencers, but the product notes function has not yet been opened to all merchants.

"From the beginning of May when I participated in the internal beta test to now, I haven't generated much sales data, but the intuitive feeling of traffic is still very exciting." said an expert who participated in the internal beta test of note-based sales.

1. Xiaohongshu Notes e-commerce “opens”

As the above merchants said, Xiaohongshu has always had the model of selling goods through notes and links, but previously only the merchant accounts that opened stores could post product links. After the new function is launched, individuals and bloggers can publish notes with links.

In 2022, the "Product Notes" function launched by Xiaohongshu is considered an important attempt by Xiaohongshu on the transaction side. However, Yibang Power learned that under the product notes function, more merchant accounts produce content on their own and link products to guide users to complete transactions. During this period, the essence of the cooperation model between merchants and influencers is still advertising. Merchants need to place orders with influencers on Dandelion, and the settlement method is also based on the advertising fee of a single note of the influencer.

The updated note-based product promotion function allows merchants and influencers to settle accounts in the form of commissions, and influencers can actively select products in the product selection center and initiate cooperation with merchants. In addition, in terms of the presentation of notes, the previous product notes would display the word "Sponsored" in the lower right corner, while the upgraded product promotion notes are not significantly different from ordinary notes.

Notes for product promotion (left); product notes (right)

"Previous product notes were designed for brand promotion. If there were sales, it would be better. If not, the advertisements had already been placed. Now the product notes are the real product promotion route." A Xiaohongshu service provider summarized the huge changes before and after the upgrade of the note function.

"There are actually very few influencers who can actually make sales after accepting advertisements." He revealed that merchants have actually been looking forward to having notes settled by commission for a long time. "The form of commission cooperation makes up for the disadvantages of advertising cooperation to a certain extent, ensuring the conversion efficiency of merchants on Xiaohongshu, and also provides a new monetization channel for influencers. Some vertical field influencers with relatively few fans can earn more income by relying on commissions for bringing goods."

Ebrun Power learned that merchants who enable the note-based sales function can choose between two cooperation modes: the general plan and the targeted plan. Under the general plan, the merchant's products will be directly entered into the "Note-based Sales Selection Center", where the blogger will initiate product selection and add promotional sales. Merchants can set up commissions and free samples for the corresponding products, which are visible to all bloggers. Under the targeted plan, merchants can complete communication and confirm cooperation with the designated blogger in advance, and then set up an independent commission plan visible only to the blogger to carry out note-based sales cooperation.

For influencers, the changes brought about by note-taking are more intuitive. Whether influencers or personal bloggers, they now have an additional way to "make money" on the platform.

Previously, an industry insider revealed that a blogger with 10,000 fans on Xiaohongshu only earns 20,000 yuan a year. "Currently, advertisers pay a few hundred to more than a thousand yuan, and not necessarily every month. The trend of getting rich from advertising fees is over." The method of settling commissions for selling goods through notes can at least free some influencers from their dependence on advertisers, and provide an additional channel to flexibly seize the initiative.

In terms of the specific commission settlement form, Yibang Power learned that the commission is settled monthly based on the order dimension, and the blogger's commission amount = effective sales amount * CPS commission rate set by the merchant * (1 - platform technology fee). When operating withdrawals, individual bloggers will be charged a 10% comprehensive service fee, while MCN-signed bloggers or independent studio bloggers will not be charged a comprehensive service fee.

It is reported that the blogger-side note-based product promotion function has been fully launched to qualified influencers and individual bloggers a few days ago. Currently, all individual bloggers who have stores, products on shelves, or columns associated with stores can use it directly. As of press time, the merchant side still only supports merchants invited by some platforms to enter the experience.

2. How can businesses seize new opportunities?

"For merchants, the platform has further connected the two aspects of selling products and promoting products." A Xiaohongshu agent operation service provider said that the "closed-loop conversion" problem that was originally criticized by merchants the most on the platform may be solved to a certain extent by the selling notes.

It is understood that the platform has designed a traffic support mechanism for the new function. According to the above-mentioned service provider, in addition to natural traffic, high-quality content of a single product note will also receive an additional 10,000 to 100,000 traffic exposure.

An expert who has participated in the internal testing of the note-based sales promotion function said that after publishing the first note-based sales promotion function, the official will first give about 10,000 free traffic. After that, the notes will receive a certain degree of traffic rewards on the premise of completing the official release task, and the specific amount will still depend on the quality of the notes. The expert said, "In general, the traffic is not bad, and the 'little eyes' (reading number) of the notes are good."

According to the MCN agency to which the influencer belongs, the traffic of video notes is generally higher than that of pictures and texts. "Even if we take a picture, we will send it out in the form of a video. But it does not mean that pictures and texts will not have good traffic." said the head of the agency.

Previously, Xiaohongshu has started internal testing of the "video streaming" function. As for whether the video streaming will be integrated with the product notes, the head of the agency said that it will definitely be in the future, but the corresponding functions and tools have not yet been launched.

Xiaohongshu "Video Stream" function

However, what can merchants do to seize the new opportunities brought by sales notes?

A Xiaohongshu service provider said that for most brands that have been on Xiaohongshu for a while and have a certain degree of popularity, they may have become accustomed to purchasing on various e-commerce platforms, and it is not easy to pull consumption habits back to Xiaohongshu, but it can be gradually achieved through the "exclusive mechanism." "Let users only buy certain products through Xiaohongshu, or set an absolute price advantage on Xiaohongshu."

A small home appliance merchant who mainly sells underwear washing machines said that a mid-to-high-end product priced at around 1,000 yuan that the brand promotes on Xiaohongshu is listed on Tmall and Mini Programs at a higher price for product display only, and other channels will not list the product. "After users see the product link through search on Xiaohongshu, they will go to other platforms to search for price comparisons, and eventually return to Xiaohongshu to make a deal." The merchant said that the user habit of planting grass on Xiaohongshu and then making a deal on other platforms still exists, and he is trying to use "exclusive traffic-generating products" to keep the transaction on Xiaohongshu.

Someone close to Xiaohongshu pointed out that for merchants who hope to find new sales through Xiaohongshu notes, they need to cooperate with the brand's product and price layout on other platforms to maximize the conversion brought by notes. "Xiaohongshu's traffic cost is not as high as other platforms. Brands can use Xiaohongshu's content and exclusive products to attract users to private domains for repeat purchases, which plays a multiplier role."

At present, merchants who use product exclusive mechanisms to promote the conversion of notes to bring goods are mainly divided into two categories. The person further pointed out that the first category is brands with relatively high product unit prices. For such products, users have actually formed a certain degree of willingness to buy, so they will come to Xiaohongshu to search and buy; the second category is new brands with smaller scale. The person believes that the operation team and budget of such merchants are limited, and they hope to focus on "penetrating" on one platform.

In addition, white-label merchants who do not emphasize brand awareness and merchants with supply chain advantages will also have the opportunity to use notes to promote sales on Xiaohongshu to achieve better conversion results. "This type of merchant usually operates by promoting a single product. When a product is almost sold out, they will switch to the next model," the person added.

3. Can the grass-planting notes effectively promote products?

The QuestMobile report shows that the number of brands placing Internet advertisements has been on a downward trend since the first half of 2021, and fell by 38.3% year-on-year in 2022. The proportion of advertising expenses of the top brands in some industries has narrowed. For example, the proportion of advertising expenses of the top two sub-brands in the beauty, automobile, personal care and dairy industries has declined year-on-year.

According to the data released by Xiaohongshu, advertising revenue accounts for 80% of Xiaohongshu’s revenue, while e-commerce revenue accounts for only 20%. Against the backdrop of tightening advertising revenue for brands, it is inevitable for Xiaohongshu to focus on e-commerce for revenue growth. Moreover, the route from “notes to conversions” has been verified by other platforms.

In February this year, Douyin e-commerce fully opened the entrance for pictures and texts to sell goods, and users can attach product links when posting pictures, texts and videos. According to official data released by Douyin, the average daily views of Douyin pictures and texts selling goods increased by 150% and the average daily transaction volume increased by 214% from March to April this year.

But, can Xiaohongshu Notes, which has always been known for its grass-roots content, do a good job in promoting products?

A practitioner in the Xiaohongshu industry told Yibang Power that for the same product and the same consumer, if the average order value is higher than 50 yuan, the consumer is more likely to place an order on Xiaohongshu.

"From the perspective of influencing consumption, Xiaohongshu's users are very precise." The above-mentioned practitioners pointed out that users on Xiaohongshu have the expectation of being planted with products, which has long been reflected in their reading habits. "Xiaohongshu users will enter a note through the note title, and are likely to read the entire note, because the fact that users come to Xiaohongshu indicates that they have a purchase demand. Users of general short video platforms are more likely to be planted with products by videos of a few seconds during entertainment, and are more likely to make impulse purchases."

A research report released by Tianfeng Securities shows that from the perspective of content consumption efficiency, the "cover + title" display format can quickly match users' interests and needs, and the information reception efficiency is higher than that of video streaming.

Whether it comes from the platform users' grass-roots mentality or the content form, from the actual data results, the conversion rate of Xiaohongshu's content grass-roots is much higher than that of other platforms. According to data released by QuestMobile in 2020, among the three content platforms of Douyin, Kuaishou and Xiaohongshu, the average conversion rates of Douyin and Kuaishou were 8.1% and 2.7% respectively, while the average conversion rate of Xiaohongshu was as high as 21.4%.

In addition, "search" as one of the most important behaviors of platform users also provides rich imagination for the conversion ability of Xiaohongshu notes to bring goods.

"The search rate of Xiaohongshu users is very high, and the essence of search is demand." A service provider told Yibang Power that the search traffic of some mature e-commerce companies can reach 80%, and the proportion of Xiaohongshu may be even higher than this. "We can deduce that if there are 50,000 search traffic per day in a category, the conversion rate is 5%, which means there are 2,500 orders. However, there was a lack of direct conversion before, and there may only be 100-200 orders per day on the platform. 2,300 orders in the middle were transferred to other platforms. For Xiaohongshu, keeping these 2,300 orders on the site will create new growth space."

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. And these search users who have shopping needs have the opportunity to make transactions directly in their notes.

Another relevant practitioner said that influencers and brands with content capabilities will gain more conversion opportunities through notes in the search domain. "If a note promoting products is a 'hot article', the probability of users placing an order after searching will increase by 50-60%."

With the upcoming 618, will the Notebook Shopping app help boost Xiaohongshu’s GMV during the big promotion? Some service providers believe that, judging from the time until 618 and the plan to fully launch the function, 618 may not be the explosive period for the Notebook Shopping app’s GMV, but it is definitely an opportunity that merchants cannot miss. And this function may help Xiaohongshu’s performance reach a higher level during the year-end promotion.

Author: Li Mengqi

Source: Yibang Power (ID: iebrun)