The “first bite of crab” of Xiaohongshu e-commerce, 9 yuan with free shipping, is it really tempting?

Since last year, small-scale merchants have begun to flock to Xiaohongshu. They sell mobile phone cases for 9.9 yuan with free shipping, hairpins for 10 yuan for 10 pieces, pendants for 4 yuan with free shipping... Facts have proved that these merchants are grabbing the traffic dividend. How to facilitate transactions in Xiaohongshu notes, what is the future of Xiaohongshu e-commerce? The author of this article will take you to explore.

Xiaohongshu, which started out as a content community, has always given its users keyword labels such as trendy, fashionable, and exquisite.

Xiaohongshu has always hoped to follow these labels when doing e-commerce. From Dong Jie's live broadcast case to the e-commerce conference in the fashion industry, Xiaohongshu is trying to forge its own style of e-commerce.

Since last year, many small-scale and unbranded businesses that seem to have nothing to do with the community have flocked to Xiaohongshu. They are not selling beauty devices or luxury goods worth thousands of yuan, but mobile phone cases with free shipping for 9.9 yuan, hairpins for 10 yuan, and pendants with free shipping for 4 yuan. These businesses have not disappeared from Xiaohongshu, but are grabbing the traffic dividend.

Many novice e-commerce merchants can earn at least 10,000 yuan a month on Xiaohongshu. They attract users with low prices and exquisite pictures and texts. They publish product notes in the store, and users will place orders directly after seeing the content and complete the transaction conversion on Xiaohongshu.

The closed loop of planting and removing grass that Xiaohongshu has been pursuing for many years is being tested by these businesses to blaze a new trail.

Xiaohongshu hopes that the next "Perfect Diary" can grow on the platform. But now they need these small businesses more, after all, Xiaohongshu's e-commerce is just getting started.

01 Small businesses flock to Xiaohongshu

HEIDI is considered to be one of the earliest entrepreneurs doing e-commerce on Xiaohongshu.

In April last year, HEIDI started to open a store on Xiaohongshu, selling only mobile phone cases with a per-customer price of around 10 yuan.

The reason why HEIDI chose Xiaohongshu was that other platforms were too competitive and had no bonuses. "At that time, I was doing the IP incubation business for short video accounts, but there was no value in the end because it was too competitive. It happened that another partner wanted to try the Xiaohongshu platform, and I knew a mobile phone case factory in Shenzhen, so I decided to make mobile phone cases."

Compared with other platforms, Xiaohongshu is a platform with low investment of effort and cost. In 2021, after Xiaohongshu launched the "account and store integration", individuals without any fan base can open a store on Xiaohongshu without too much capital requirement. Especially for those e-commerce novices or new brands that have just started their business, Xiaohongshu is one of the few "newbie-friendly" e-commerce platforms at this stage.

Lico, the founder of Weekend Perfumery, has been doing custom perfume making online. Compared with traditional shelf e-commerce, Xiaohongshu platform better meets her needs in this field.

Lico said, "Xiaohongshu users have high aesthetic standards, which matches our customer needs." Chen Jiang, an entrepreneur who has an original jewelry store on Xiaohongshu, also told Tech Planet that she used to run a store on a shelf e-commerce platform, but as a newcomer, it was difficult to gain volume on an already mature e-commerce platform. "Other platforms display you based on your sales volume, not based on the content you post."

Chen Jiang originally planned to divert traffic from Xiaohongshu to other platforms for conversion, but the effect was not satisfactory. So starting this year, he began to use Xiaohongshu as an e-commerce channel rather than a traffic diversion platform.

Since last year, more and more small-scale businesses have emerged on Xiaohongshu.

They integrate into the Xiaohongshu content community, and attract Xiaohongshu users to place orders immediately after being attracted by exquisite pictures and low customer unit prices. Some of them are new brands that are in the stage of going from 0 to 1 and intend to go the original route. Others are individual merchants who have sources of goods or understand content operations. Even many merchants without sources that can no longer survive on other platforms have appeared on Xiaohongshu.

In their eyes, Xiaohongshu is one of the few platforms that can generate traffic dividends for small businesses like them, and its decentralized traffic distribution mechanism can benefit small businesses like them. Although the price is also 9.9 yuan and free shipping, the businesses and products on Xiaohongshu are different from those on other shelf e-commerce platforms.

The products that can impulsively attract Xiaohongshu users all have a common feature: they are not daily necessities, but products for women, such as mobile phone cases, stationery, accessories, nail art, hairpins, etc. Low prices cannot completely attract Xiaohongshu users, and exquisite pictures and texts are needed to promote orders.

Jiang Xing placed his first order on Xiaohongshu because of a nice-looking phone case picture. Like most people, Jiang Xing spends several hours on Xiaohongshu every day, but once he sees a product on Xiaohongshu, he will habitually switch to Taobao, Pinduoduo and other e-commerce platforms to place an order.

Until this year, a beautiful mobile phone case picture and text appeared on Jiang Xing's Xiaohongshu homepage. Jiang Xing did not hesitate at all, immediately clicked into the note, placed an order and paid, "After all, a mobile phone case with free shipping for 9.9 yuan does not require too much time to make a consumer decision."

After the first time, more and more products with free shipping at 9.9 yuan appeared on her homepage, including mobile phone cases, accessories, hairpins and other small gadgets that can capture girls. With free shipping at 9.9 yuan, Jiang Xing has placed 5 orders on Xiaohongshu in one month. In the past 5 or 6 years, Jiang Xing had never considered buying things on Xiaohongshu.

02 Merchants who earn hundreds of thousands of yuan a month and benefit from the platform bonus

Chen Jiang started posting product notes and live-streaming accessories displays in January this year, but the results were not ideal.

"No one liked it at first, but I persisted," Chen Jiang told Tech Planet. After a few months of no one paying attention, Chen Jiang's account had its first hit content.

Although the note only has 3,000 likes, Chen Jiang's store can already generate sales of 10,000 to 20,000 yuan per month. After Chen Jiang pinned this content, it continued to bring her orders. In the Xiaohongshu community, merchants obtain public domain traffic and reach users not through searches and entries, but through content.

Merchants need to continuously publish pictures, texts or video notes to reach users.

Because of the long-tail traffic distribution mechanism of Xiaohongshu, a popular content will be seen for a long time. In the past year, HEIDI has opened six mobile phone case stores on Xiaohongshu, and the performance of four of them has exceeded her expectations. "The monthly turnover of four stores can reach 500,000 or 600,000. If there is a popular product, it may be more," HEIDI revealed to Tech Planet.

HEIDI admitted that the sales volume is inseparable from the stage of the Xiaohongshu platform itself, and it is now in the "wool-pulling" stage. In the past year, HEIDI has made almost no marketing investment on Xiaohongshu, and has not sought out influencers on Xiaohongshu to promote products. It has only used influencers to live broadcast products once, but it was suspended due to poor results.

All HEIDI stores rely on their own content operations to gain platform traffic. The founder of the original brand EKKERT told Tech Planet that she and her peers have estimated that if they can have a note with more than 10,000 likes, they won’t have to worry about sales in the next one or two months.

EKKERT originally only focused on overseas markets. After being constantly asked by fans in China to buy products, they considered opening a store on Xiaohongshu. They did not focus on Xiaohongshu, and overseas was their main battlefield. The Xiaohongshu store has only been in operation for less than half a year, and the monthly sales have stabilized between 50,000 and 100,000.

This is why Zhimai EKKERT decided to invest in Xiaohongshu this year. In Zhimai EKKERT's view, he did not focus on investment in the past six months, did not invest in traffic, and did not find influencers to promote it. "Before, I just opened a store, posted notes, participated in platform activities, and then added live broadcasts."

Compared with other platforms, Xiaohongshu is still in its infancy in e-commerce.

During this stage, as long as you conform to the tone of Xiaohongshu and follow their rules, you will get corresponding rewards.

However, this seemingly smooth content-driven and note-driven sales chain is only applicable to products with low average order value. Once the average order value exceeds RMB 50, this closed loop will encounter problems. Gionee cannot rely solely on pictures and texts to facilitate transactions in the maternal and infant market on Xiaohongshu.

As a service provider of short video platforms, Gionee started to try Xiaohongshu last year and tested multiple tracks on the platform. He told Tech Planet that for products with a unit price of 100 yuan, it is impossible to directly facilitate transactions in the content of Xiaohongshu notes. Xiaohongshu can only be used as a drainage channel to guide traffic to private domains for transactions. It can be seen that Xiaohongshu cannot escape the e-commerce rule of acquiring customers at a low price.

03 Xiaohongshu needs small businesses

Relying on the platform's traffic bonus period, this group of low-priced, small-scale merchants who make money on Xiaohongshu seem to be out of place in the Xiaohongshu community. They are not the niche, design, fashion, and trend that Xiaohongshu has always pursued.

But at this stage, Xiaohongshu needs these merchants. Xiaohongshu's e-commerce ecosystem is still in its early embryonic stage and needs to cultivate users' shopping habits. Merchants also understand that Xiaohongshu is still cultivating users' thinking about consumption on Xiaohongshu. "Many people have never bought anything on Xiaohongshu, so Xiaohongshu keeps sending coupons."

Although it has achieved good results on Xiaohongshu, EKKERT still feels that the e-commerce shopping atmosphere on Xiaohongshu is far from being formed. EKKERT has noticed that if a buyer show on Xiaohongshu becomes a hit, the repeat purchases it brings will also be deposited on e-commerce platforms such as Taobao. "Many users will spend the original price to buy from Taobao stores even though Xiaohongshu has discounts. People are still used to planting seeds on Xiaohongshu."

In the early days of the platform, various merchants were needed to improve content conversion rates and cultivate user habits in order to attract more merchants and users. Although those low-priced and free shipping products are somewhat inconsistent with the tone of Xiaohongshu, their role in the platform is to help Xiaohongshu cultivate users' shopping habits on the site.

As a platform in its infancy, merchants also need to face the imperfect infrastructure while having traffic. Compared with other platforms, the traffic tools of Xiaohongshu platform are too slow to iterate. Many merchants told Tech Planet that they did not invest in Xiaohongshu because Xiaohongshu's traffic investment tools were not accurate, and their peers who tried to invest in traffic did not get good feedback.

Compared with mature platforms, merchants generally feel that Xiaohongshu e-commerce is inconvenient in a series of operations, from entering to operating stores. Some merchants told Tech Planet that it takes one to two months longer to successfully open a store on Xiaohongshu than on Douyin.

Some merchants know clearly that the bonus period of any platform is temporary. She wants to develop a long-term brand on Xiaohongshu, but the current categories cannot support a brand. But she is more worried about whether the iteration of Xiaohongshu platform itself can really support new brands, rather than a single white-label merchant.

Recently, Xiaohongshu is testing the "notes bring goods" function. Merchants who have opened this permission can select platform experts to cooperate with note chain. For merchants who are really doing branding, the release of experts bringing goods is more conducive to long-term store opening on Xiaohongshu. A merchant told Tech Planet that Xiaohongshu officials revealed that the platform will make achievements during the 618 period. Xiaohongshu is also further lowering the threshold for opening stores.

In addition, a seller revealed to Tech Planet that Xiaohongshu is opening up some special categories, such as the health track. Industry analysts believe that these actions of Xiaohongshu are all to build momentum, including the establishment of Dong Jie's live broadcast room, which is also to set a benchmark and let the outside world see Xiaohongshu's determination in e-commerce.

Chen Jiang decided to focus on Xiaohongshu this year, not only because of the feedback from the store, but also because she saw the popularity of Dong Jie's live broadcast room. "This at least shows that Xiaohongshu wants to do e-commerce well." She also knows that what Xiaohongshu needs more at this stage is herself. (Note: Jinli, Chen Jiang, and Jiang Xing are all pseudonyms.)

Author: Xi Rui

Source: WeChat public account: "Tech Planet (ID: tech618)"