After mid-May, the atmosphere of the e-commerce war became more and more intense.
Xiaohongshu added another fire to the tense atmosphere before the fierce battle.
First, the “Red Cat Plan” surprised the industry, and then JD.com also cooperated with Xiaohongshu, and the product links in Xiaohongshu can also jump directly to the JD.com page.
Xiaohongshu opens up external links, and the effect is very direct.
First, users jump to Tmall and JD.com stores with one click, shortening the conversion path.
Second, from grass planting to transaction, it is more accurate than ever.
This is undoubtedly good for Tmall and JD.com. For Xiaohongshu, things seem to have become less simple.
In the past few years, 618 has a sense of atmosphere, but the data is getting worse and worse year by year.
When the e-commerce war between giants reaches the point of ignition, an open Xiaohongshu may be the best solution for everyone.
Xiaohongshu retreats to advance? Behind the openness is also compromise
As early as 2020, Xiaohongshu opened up external links to Taobao, allowing some talents to display Taobao product links in live broadcast rooms and notes. However, the collaboration lasted for a short time, less than a year.
Now, Xiaohongshu may have chosen to close it for two reasons.
First, I want to develop my own e-commerce business.
From the launch of “number store integration” in 21, the threshold for opening a store was lowered, and merchant accounts were allowed to directly associate product notes. Xiaohongshu’s e-commerce intention is obvious. In May of that year, Xiaohongshu promulgated the “Community Business Convention”, emphasizing that transactions must be completed on the site, and requiring bloggers to “not guide transactions outside the site in personal pages, comments, private messages and other scenarios”.
Obviously, at that time, Xiaohongshu’s management believed that the fat of e-commerce still had to be left on its own plate.
As a result, Xiaohongshu, which “does not stand in line”, has become a “traffic island”.
By 23, Xiaohongshu made effortsBuyers and live e-commerce, a new trading department was established, which became a first-level department parallel to the community department and the commerce department. In 2024, even moreThe positioning of “lifestyle e-commerce” has been clarified。
Before 618 this year, it suddenly opened external links, and within a year, why did Xiaohongshu’s attitude change greatly?
To put it bluntly, I still can’t let go of the tone.
Second, opening external links is afraid of damaging the community atmosphere.
The unique advantage of Xiaohongshu lies in its “Share authenticallyThe community culture.
This is why while Xiaohongshu is engaged in e-commerce, there have been voices questioning whether e-commerce will destroy the content ecology.
The notes, evaluations and strategies created by users are just like the evaluations of restaurants by netizens on Dianping.Naturally has high credibility, which also provides the basic conditions for guiding shopping.
In the first quarter of 2024, Xiaohongshu’s UGC accounted for about 90%, and 68.06% of Xiaohongshu’s “grass planters” were “amateurs” with less than 5,000 fans.
With a foundation of trust, Xiaohongshu’s massive and real user notes are a gold mine.
However, gold mines are not easy to mine.
The flavor of e-commerce is getting stronger and stronger, and bloggers will also be actively recognized as advertisements by users.
Over time, this will shake the foundation of Xiaohongshu’s content.
The lesson from the past is “Babytree”, which was the world’s largest maternal and infant community with more than 500 million users. It is very similar to Xiaohongshu, but the category is more vertical. What happened later? BabyTree packaged and sold its traffic to Fuxing Group and Alibaba, and finally slowly faded out of the public’s vision.
In fact, there are many similar cases, Weibo, Zhihu, all of them.
Today’s Xiaohongshu wants to really achieve”Real grass planting + weedingIt is necessary to restrain its own e-commerce business and put a “tight curse” on commercialization.
Traffic is currency, and attention is deflationary.
Fortunately, the commercialization process of Xiaohongshu has always been relatively restrainedBut if you want to IPO in the future, the monetization rate must be an indicator that the market values.
Perhaps it may be difficult to achieve the expected monetization rate with its own e-commerce business alone, and suddenly letting go of the once feared external links at this moment may be a last resort.
Not just relying on traffic, e-commerce is a complex business
From Alibaba making Alipay and starting to sell goods to the C-end, to now live broadcast e-commerce is blooming everywhere, watching the e-commerce industry grow all the way to the present, I have such a basic judgment about the e-commerce industry:
To do e-commerce, traffic is very important, but to do e-commerce, you don’t just rely on traffic.
Today, all e-commerce platforms are focusing on three things:Capturing humanity, satisfying desires, and facilitating deals.
Capturing human nature is reflected in the data side as DAU and MAU. Satisfying desires is reflected in the data is GMV and GTV. In the final step, the transaction is actually facilitated before it is recognized by the accountant and then recognized as revenue in the annual report.
These three things are easy to say,It’s hard to do, but it’s hard to balance.
Understanding human nature and understanding trading are two different things that require two completely different ability systems. No matter how large the enterprise resources are, it is necessary to weigh the pros and cons of how to distribute them.
Xiaohongshu understands human nature. Therefore, after shaking B for three parts of the world, you can still rely on unique tonal content to guard your own traffic pool from being divided.
Look at Zhihu again, look at the post again, the difference between high and low is obvious.
To put it bluntly, in essence, high-value traffic emphasizes circle and tonality.Why are private directors so expensive? Selling a circle and selling an opportunity for resource exchange is tonality.
Transactions are different, transactions pay attention to supply, scale and cost.
In 2024, Xiaohongshu’s e-commerce GMV will only be 100 billion, but the transaction of self-operated malls will account for less than 5%. It is more than ten times worse than the scale of e-commerce giants, and dozens of times worse in monetization ability.
In terms of user scale, Xiaohongshu’s monthly active users have reached 300 million, and the daily active users (DAU) are about 120 million, and in terms of user value, high-value female users account for 70% and male users account for 30%, and they are all young people, which is the main force of new consumption.
So, what’s the difference between Xiaohongshu?
I think the difference may be on the supply side.
“Planting grass” is not only a radius of ability, but also a path dependence for Xiaohongshu. Therefore, after opening the link, Xiaohongshu seems to be going to be “upstream”, but it is more like a compromise.
Compromise on insufficient supply capacity.
Next, there are two points worth observing about Xiaohongshu:
1: Financially, will the structure of advertising revenue account for a larger proportion, and will the core e-commerce business gradually be marginalized?
There is competition between different e-commerce models, even in the same ecosystem, self-operated and external links will also have competition, after opening the external link, shelf e-commerce is not only an opportunity, but also a competition.
So, in the face of external competition, can self-operated e-commerce, which was well protected by the platform in the past, survive? This is a problem.
2: Can selling traffic be better than selling transactions?
After the opening of external links, there is a high probability that there will be a wave of commercialization of Xiaohongshu in the short term, but how long it can last is a question.
After all, the monetization rate of content platforms is not high, not because of the strategy, but because of the model.
In the world of Internet business,Selling traffic is like the primary industry and the secondary industry. It is the production and circulation of doing.
Sell the transaction, in essence, it is service trade, which is to collect production surplus and realize it by matching orders.
There is an essential difference between the two in terms of monetization ability.
This difference is also reflected in the value judgment of the primary market, with Tianyancha APP showing that in July 2024, Xiaohongshu was valued at $17 billion.
However, from another perspective, opening external links may be the optimal solution that Xiaohongshu can achieve.
JD.com and Taotian have taken so many years to balance traffic capacity and transaction ability.And Xiaohongshu does not have enough resources and space windows to establish another trading system.
Douyin is well versed in human nature, and it can also capture human nature the most, and the supply end is always one trick away, you see that Douyin e-commerce GMV is so crazy, but in terms of monetization ability, it has to be Taotian.
This reflects the complexity of e-commerce business.
After so many years of development in the industry, Taobao and JD.com have built infrastructure, which makes people feel that it has become easier to do e-commerce business, but it is still an extremely complicated thing to let people complete transactions through code data across the screen.
Delivery, drainage, conversion, trading, operation, warehousing, logistics, distribution…… There are many and miscellaneous abilities involved. This is also destined that any closed e-commerce system will eventually be open to giants. Because only in this way can you use the ability of giants to reduce costs and better monetize yourself.
The opening of Xiaohongshu is beneficial.
Looking back,The “Red Cat Project” is actually very valuable.
For the brand side in the past, transaction data is missing.The brand’s money buys a “blind box”Even if it is effective, there is no way to know where it comes from.
For example, some friends of foreign consumer brands have always known the importance of planting grass in Xiaohongshu, but without terminal transaction data, it is difficult to persuade decision-makers to increase the investment budget.
The “Red Cat Project” emphasizes data sharing between the two parties: Xiaohongshu opens front-link data such as reading, commenting, and liking, while Taobao Tmall provides back-link conversion data such as store entry, search, and transaction.
Of course, there will be gains, and there will be sacrifices.
In the end, it may be the individual merchants who value the value of Xiaohongshu’s traffic and then enter the market. When the entire industry rushed in, they finally made wedding dresses for others.
The dust surging in the industry may be a mountain in front of every business.
Next, if an individual enters Xiaohongshu to do e-commerce, will it become a “hellish” difficult game?
It is worth continuing to pay attention to.
