With the approach of the 618 Shopping Festival, Xiaohongshu and Taobao Tmall announced a strategic cooperation to launch the “Red Cat Plan” to further open up the integration of platforms and open up the whole link from planting grass to purchasing. This article analyzes how Xiaohongshu can monetize traffic through advertising while maintaining the authenticity of community content, and discusses the future development direction of Xiaohongshu’s e-commerce business.
There is still more than a month left before the “right day” of the 618 promotion, and Xiaohongshu and Taobao Tmall shook each other’s hands. On May 7, the two platforms reached a strategic cooperation and announced that they would further open up and integrate with the “Red Cat Plan”, open up the whole link from grass planting to purchase, and jointly boost the business growth of merchants.
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This cooperation echoes the way some users use the product – planting grass in Xiaohongshu, searching and trading on other e-commerce platforms, especially before Xiaohongshu developed its e-commerce business. The difference is that at that time, users were required to manually switch between different apps, which was a spontaneous behavior; This time, a new “advertising link” function has been added under Xiaohongshu Notes, realizing direct jumping, and “crossing the clear road” through official product upgrades.
Liu Bo (nickname: Jialuo), president of Tmall, called this cooperation “a very important step for Taobao and Tmall’s global operation in 2025”. In 2025, growth will be the top priority of the entire Alibaba e-commerce business group, and the so-called global operation is equivalent to the way to grow and make the cake bigger, and Xiaohongshu is one of the platforms that cannot be ignored.
Traffic openness is a gradual process. The power plant learned that the “grass planting direct” cooperation model relying on the “advertising chain” function has been tested in Xiaohongshu for nearly a year, and only some high-quality merchants can use it, and the relevant notes will indicate the words of the advertisement, which is a further attempt after small-scale exploration. However, in addition to the impact of commercial content on the community ecology, the follow-up development of Xiaohongshu e-commerce has attracted much attention. The fork in the road to planting grass, on the left is to leave transactions in the station and expand lifestyle e-commerce, and to the right is to jump to external e-commerce platforms and achieve traffic monetization – it seems that Xiaohongshu wants to take two paths at the same time, but it is difficult to have both.
01. Open traffic and closed loop of transactions
For Xiaohongshu, this cooperation mainly involves two aspects of product upgrades. First, the changes in Little Red Star have opened up more comprehensive data on the original basis and enriched the delivery model; The second is to add the “advertising chain” function, and based on this, a new commercial product “Grass Planting Direct” has been launched.
Merchants who play Xiaohongshu are no strangers to Xiaohongxing. As a grass planting alliance product jointly created by Xiaohongshu and Taobao, since its launch in 2022, it has helped merchants explore the value of grass planting by monitoring the conversion effect through data return from Taobao. Similar products include Xiaohongshu and JD.com, and Xiaohonglian, which was jointly launched with Vipshop.
According to the data, in the past year, the click-through rate of Taobao and Tmall brand merchants in Xiaohongshu has increased by 20% and the interaction rate has increased by 109%. Among them, the average daily number of merchants participating in Taobao and Tmall joint investment increased by 335% year-on-year.
However, due to the lack of actual post-link data, for Xiaohongshu and the merchants who put it here, where the business comes from and how to accurately quantify their own grass planting ability is always a question mark to be solved. A merchant told the power plant that the previous use of Xiaohongxing relied on Taobao’s data backhaul, the steps were relatively complicated, “the actual operation was more troublesome”, the statistical caliber also changed frequently, and the data attribution was “not clear enough”.
To some extent, the “Red Cat Plan” can be understood as the upgrade and continuation of Little Red Star. In addition to the pre-link data of Xiaohongshu such as reading and commenting, the post-link data of Taobao such as entering the store, new visitors, additional purchases, collections, following, and transactions are also fully open. The implementation of the “advertising chain” actually complements the refinement of the back-link data. To put it simply, users can directly jump from the details page of Xiaohongshu notes to Taobao App to browse and place orders, and merchants can also use Xiaohongshu content to attract potential consumers to Taobao Tmall stores or products, achieving “direct access to grass planting”.
A person familiar with the matter revealed to the power plant that at present, this function is only for some high-quality brands that have joined the pilot, and the name of the Xiaohongshu side is “grass planting direct”, corresponding to Alibaba’s side traffic pass PRO (that is, CID, merchant direct investment, budget direct cooperation with Xiaohongshu) and UD effect (Alibaba agency, budget through Alibaba) two products. As for specific categories, including beauty and personal care, maternal and infant parent-child, sports and outdoor, big health, etc., it will gradually be extended to other industries and categories in the future.
It is worth mentioning that for merchants who plant grass on Xiaohongshu, Taobao will also increase investment to heat and invest in grass planting notes, tilt more resources, and improve consumer interaction – when “Xiaohongshu grass planting – jumping to Taobao transactions” becomes possible, increasing the traffic of the front link is also increasing the transaction of the back link.
As a result, the closed loop of the transaction was reached, although the transaction was not left on Xiaohongshu, but the latter’s traffic was also monetized through advertising. This may not only be the “open road” in the mouth of Xiaohongshu COO Ding Ling (potato name: Conan), but also a clearer road to commercialization.
The above-mentioned people familiar with the matter said that in addition to Taobao and Tmall, Xiaohongshu, JD.com, and Pinduoduo’s advertising jumps are also in internal testing. “Openness and connection are the general trend, because merchants are operating in the whole region, and Xiaohongshu grass planting is the starting point of merchant operation and the core business value of Xiaohongshu.”
02. After jumping to Taotian, what should I do with the e-commerce business?
From the perspective of Taobao and Tmall, announcing cooperation with Xiaohongshu at this time can not only supplement the 618 promotion with a certain amount of traffic, but also provide some new choices for merchants. However, it is precisely because many merchants are operating in the whole region that when Xiaohongshu moves drainage to the table, it will inevitably cause the outside world to question its e-commerce business prospects: if users place orders more by jumping to external e-commerce platforms, what will Xiaohongshu’s lifestyle e-commerce do? Does this mean that Xiaohongshu is swaying on the future development of its e-commerce business?
In the view of the above-mentioned people familiar with the matter, the relationship between jumping to external e-commerce platforms and Xiaohongshu’s e-commerce business is not a one-sided relationship. According to its observation, some merchants once found that in addition to the outstanding transaction conversion performance of Tmall stores, Xiaohongshu stores have also achieved good growth. “Merchants know that they are covering different groups of people on different platforms, and they know what goods are suitable for selling where, and their operational strategies and product choices are different.”
Xiaohongshu began to follow the path taken by Station B. Bilibili has always pursued the e-commerce strategy of “big open loop”, striving to connect its ecological potential energy to all e-commerce platforms. In contrast, another platform that started with content, Douyin, is moving forward on the road of self-built closed-loop e-commerce. Of course, from buyer e-commerce to lifestyle e-commerce, the current volume of Xiaohongshu e-commerce is not as good as trillion-level Douyin and Kuaishou. Therefore, holding the hands of other e-commerce platforms such as Taobao and Tmall, browsing and planting grass under the content logic, and making clear purchases under the e-commerce logic is equivalent to making up for each other’s shortcomings. If more and more merchants settle in because of the value of Xiaohongshu’s grass planting, then opening a store may be a matter of course.
At the same time, some merchants expressed concerns about the traffic of natural notes: “Will the traffic of natural notes of talents be reduced, and then let us run advertisements?” ”
Not all merchants have this opportunity. A food merchant believes that there is a threshold for the use of “grass planting direct”, which is more suitable for larger brand merchants. The “Grass Planting Direct Store Qualification Review Manual” released by Xiaohongshu provides the latest review standards for industry access, which requires Taobao store experience score to be at least 4.5 points, Tmall store and JD.com’s non-self-operated store comprehensive experience star rating is at least 4.5 stars, or three ratings of at least 4.5 points, and Pinduoduo stores without brand and official logo have a comprehensive experience star rating of at least 4.5 stars.
Merchants are still thinking, and some users have already given judgments. A Xiaohongshu user found that product links began to appear frequently in the comment area of some notes. “I just wanted to see more real feedback, but now I just paste the link and make a jump, isn’t Xiaohongshu going to be full of advertisements?”
In fact, the product link in the note comment area is one of the recent upgrades of Xiaohongshu’s e-commerce product link, the platform, merchants, buyers and users can publish product links in the comment area of any note, and click to enter the product page of the Xiaohongshu e-commerce store. In addition, this upgrade also includes an increase in the store entrance and automatic synchronization of product reviews to the comment area of product notes.
The demand for “links” has finally been responded to functionally, and Xiaohongshu’s new story still has to face the old problem: how to ensure the authenticity of grass planting with the blessing of advertising? This is probably a balancing challenge that content platforms have always been unable to avoid after getting involved in the e-commerce business.
