As a content community starting from cross-border e-commerce, xiaohongshu is constantly deepening e-commerce business after successfully transforming the “grass planting” platform.
On January 25, it was reported that xiaohongshu had recently adjusted its organizational structure. The original community department and e-commerce department would be merged into a new community department, and xiaohongshu coo Conan would be responsible for e-commerce business.
In this regard, xiaohongshu responded to the reporter of new consumption daily, saying that xiaohongshu’s community vision is to become a gathering place of multiple lifestyles for more users, and trading is an important part of community life. “The transaction mentality of users should be developed in the community, and the transaction ecology of businesses should grow in the community. The merger of community and e-commerce business is a natural iteration of the organization in the process of realizing the common vision.”
In the Kwai Chung, the faster electric providers bigger and bigger, Taobao tiktok directed at the small red book hinterland, the organizational restructuring is regarded as the signal of the book red book full layout of the electricity supplier. However, for a long time, it has been a difficult problem from “planting grass” to transformation of content. Whether xiaohongshu can borrow this adjustment to keep the transaction link in the closed loop is the key .
growth history of “grass planting” platform
At the beginning of its establishment, xiaohongshu once proposed the model of “community + self operated e-commerce” to develop cross-border e-commerce. However, with the change of regulatory policies, xiaohongshu began to transform to UGC community. At that time, the mobile Internet traffic dividend gradually slowed down, users’ attention was distracted by multiple fragmented entrances, and the incremental market focused on the competition for attention resources.
Xiaohongshu became popular with grass planting content in line with the tone of young shopping groups, but its commercialization did not go well. It is understood that the commercialization value of xiaohongshu is mainly reflected in advertising business, search traffic, private domain traffic, etc.
Dongxing Securities Corporation Limited(601198) mentioned in the research report that looking forward to the future, if xiaohongshu wants to fully realize the traffic value of the platform in the future, the core of evolution is to evolve into a business platform. With high-quality user groups and strong mental influence ability, live e-commerce may be the breakthrough point for xiaohongshu to complete the business closed loop .
In June 2019, xiaohongshu started live broadcasting and officially launched in April 2020. However, xiaohongshu’s live broadcasting e-commerce Gmv is low. According to the Research Report of Dongxing Securities Corporation Limited(601198) , the scale of live broadcast e-commerce market is huge, reaching 2 trillion in 2021. AI media advisory report shows that in 2020, the GMV tiktok broadcast business exceeded 500 billion yuan, and Taobao exceeded 400 billion yuan. Kwai’s GMV is 381 billion 200 million yuan, and Xiao Hong’s GMV is less than 7 billion yuan .
In addition, xiaohongshu had hoped to transform the transaction internally through self operated welfare agencies and shopping malls. In February 2019, xiaohongshu incorporated the “three party e-commerce” business in the independent e-commerce Department into the community brand (commercialization) system, and the self operated e-commerce still exists as an independent business.
In the second half of 2021, xiaohongshu will intensify its commercial transformation. In July, xiaohongshu announced that it planned to cancel the external chain function of Taobao. In August, the strategy of “integration of number stores” was officially implemented to provide a platform for brands to “directly connect consumers”.
however, the phenomenon of “planting grass in xiaohongshu and running to tmall to place an order” is still unknown.
In recent years, xiaohongshu has played an indispensable role in the rise of new consumer brands in recent years, such as perfect diary, Yuanqi forest, huaxizi, colorkey and bubble mart, but the main purchase channels of end users still point to Amoy platform.
During the promotion period, this phenomenon is more common. During the “double 11” period, the perfect diary, Zhiben, ubras, inside and outside of domestic brands that have entered the forefront of tmall’s sales are all planted with grass behind the contents of xiaohongshu.
In fact, xiaohongshu has always hoped to further expand the e-commerce business and complete the business closed loop, but the progress is not ideal. “Xiaohongshu has been deeply cultivating grass content operation, and has not gone deep into the e-commerce supply chain, which also leads to its lack of perfect supply chain, payment, after-sales service and logistics systems.” Chen Tao, an analyst of e-commerce industry, told reporters that without basic guarantee, it is difficult for consumers to convert from content planting to purchase, which will also have a certain impact on the repurchase rate.
According to the analysis of practitioners, the advantage of xiaohongshu lies in the relatively strong consumption ability of core users, and the customer unit price of live broadcast goods and shopping malls is generally high, so it is still exploring ways to further improve the sales conversion rate of KOL.
Before this organizational adjustment, xiaohongshu completed a round of financing and supplemented “ammunition” at the end of 2021. Tianyancha information shows that xiaohongshu has completed a new round of financing of US $500 million, with a post investment valuation of more than US $20 billion, led by Temasek, Tencent and Ali.
Xiaohongshu did not indicate the specific financing amount and purpose of funds, but combined with the organizational structure adjustment, the industry speculates that xiaohongshu will focus on the closed-loop transaction in 2022.
Kwai tiktok, jitter, Taobao platform, can Xiao Hong Book break through?
Since 2016, content-based has become an important direction of Taobao. Through external investment and internal ecological construction, Taobao has built internal and external matrices such as Youku, microblog, Taobao headlines, Taobao live broadcast, love shopping on the second floor of Taobao, good goods and so on. In addition, the recently launched Taobao shopping function has become the representative of UGC and PGC columns focusing on commodity recommendation and sharing, and has launched a positive competition with xiaohongshu.
Compared with xiaohongshu, the content richness of Taobao shopping and other functions is slightly insufficient. It only depends on the occupied stores to complete the update. Although the volume is large, the coverage content is not professional and interesting. Benefiting from the content, you can directly jump links, get close to consumers’ buying habits, and enjoy the natural flow pool of Taobao platform. Previously, it was this convenience that stimulated the rapid rise of Taobao live broadcast.
After testing the content of the live broadcast, xiaohongshu once signed Fu Peng, the “little assistant” of Li Jiaqi’s live studio, as the chief life experience officer. The first live broadcast set a record of 200 million viewing. However, after that, Fu Peng did not bring the popularity of live broadcast of xiaohongshu. Since then, the average number of viewers was only 150000. The first few people who brought goods on “double 11” in 2021 did not appear Fu Peng’s name.
Tiktok, Taobao’s rapid rise in the field of live broadcasting business has begun to make Kwai Hung’s e-commerce business harder to expand. In January 2022, tiktok began testing the first class entrance of grass planting in APP, and it made important reference to the content and grass. The tiktok box is gradually spreading all over tiktok culture, high-end fashion, makeup and skin care.
Tiktok has basically built a closed loop of live broadcast of the electricity supplier. Tiktok is one of the fastest ways to solve the cash flow dilemma. ” tiktok has been built closed loop, is the effect that Xiaohong hopes to achieve. At present, the little red book is suffering from a lot of content and insufficient commercialization capability,” said. Chen Tao.
According to the 2021 Little Red Book Brand Research Report released by toubao Research Institute, the revenue of little red book in 2021 is mainly composed of advertising and e-commerce, accounting for 80% and 20% respectively. The revenue of e-commerce business has not yet achieved large-scale growth.
This proportion is basically the same as that in 2020. According to the information previously disclosed by xiaohongshu, its advertising revenue will be US $600-800 million in 2020, accounting for about 80% of the total revenue; The revenue of e-commerce is about 150 million to 200 million US dollars, accounting for about 20% of the total revenue.
At present, Xiaohong’s written attack on the left and right can break through the tight encirclement through organizational adjustment?
Zhuang Shuai, an e-commerce analyst, believes that the most important purpose of planting grass on major platforms is not to sell goods or run on xiaohongshu, but to increase user stickiness.
“Content can actually make users browse longer. Entering the mobile Internet age, everyone is fighting for time, including the official account and video number of WeChat. The essence is content. from the content dimension, the transformation of grass content and the electricity supplier is very direct, followed by the short live video with the .”
