Exclusive | the organizational structure of Xiaohongshu will be adjusted, and the community department and the e-commerce department will be merged

Tech Planet exclusively learned from multiple sources that Little Red Book has recently made organizational adjustments, and the original community department and e-commerce department will be merged into a new community department. In addition, it is reported that Conan, COO of Little Red Book, wants to bring e-commerce business.

Tech Planet asked Xiaohongshu for verification on this matter, and Xiaohongshu said: Xiaohongshu's community vision is to become a diversified lifestyle gathering place for more users, and trading is an important part of community life. The user's trading mind should be cultivated in the community, and the merchant's transaction ecology should grow in the community. The merger of the community and e-commerce businesses is a natural iteration of the organization's process of realizing a shared vision.

This may mean that the Xiaohongshu e-commerce business will be re-planned, and then strengthen the opening of the community to the e-commerce link, and increase the integration layout in the e-commerce and community business, in order to obtain more user traffic and commercial monetization channels on the existing basis and expand the profit model.

"Can't afford" e-commerce business?

Since the opening of the e-commerce business in 2014, the development of Xiaohongshu's e-commerce business has been quite bumpy and has undergone many adjustments. Among them, the turning point is the split of the e-commerce division in 2019. In February 2019, Xiaohongshu merged the "tripartite e-commerce" business in the independent e-commerce department into the community brand (commercialization) system; self-operated e-commerce still exists as an independent business.

Although the mall is still an important section in the Little Red Book, its weight is significantly reduced. It is also from 2019 that the community has become a keyword that Qu Fang, the founder of Xiaohongshu, mentioned more to the outside world.

Starting from 2020, Xiaohongshu began to find a number of e-commerce executives from other platforms to join Xiaohongshu's e-commerce business. In the first half of 2020, a number of e-commerce executives were intensively recruited. According to Tuya Finance, Jin Tingting, former senior vice president of Mushroom Street and head of live broadcast business, joined Xiaohongshu; and according to late reports, Xiaohongshu recruited the executives of a large cross-border e-commerce platform to be responsible for pulling new and customer acquisition at the front end of e-commerce; the other is the former Ali middle level, who is responsible for the brand account and e-commerce link marketing tools in Xiaohongshu.

In 2020, Little Red Book also joined the boom of live streaming with goods. Xiaohongshu also said that e-commerce live broadcasting is the live broadcast form that best matches Xiaohongshu. However, in the past two years since it was launched, the Live Broadcast of Little Red Book has not been tepid, there is no eye-catching GMV data, and there is no anchor out of the circle.

According to the "2021 Xiaohongshu Brand Research Report" released by the Head Leopard Research Institute, the revenue of Xiaohongshu in 2021 is mainly composed of advertising and e-commerce, and the share of the two is 80% and 20% respectively, and the revenue of the e-commerce business is relatively cold in front of the advertising business.

Whether community and e-commerce binding can work

In fact, the business of merging the community and e-commerce is not to abandon e-commerce, but to create a shorter transaction link through the community and leave the transaction link in The Little Red Book as much as possible.

Xiaohongshu's e-commerce business is facing an unfavorable situation: it is stronger than planting grass, weaker than pulling grass, and more is to make a wedding dress for e-commerce platforms.

In 2021, cutting off Taobao's external links and launching the "number store integration" have announced that Xiaohongshu will once again break through the barriers between the community and e-commerce.

At the end of last month, Xiaohongshu Business School launched the "Home Shop Opening Plan", there is no restriction on the threshold of fans, 0 fans can still open stores, and further reduce the threshold for users to open stores in Xiaohongshu. At the end of December 2021, Xiaohongshu also launched the product note function, and the account that opened the store can insert goods in the notes, and users can buy with one click after planting grass, that is, pictures and texts, short videos with goods.

In addition, in some community projects, it can also be seen that Xiaohongshu is intentionally binding the community and e-commerce.

In November 2021, Xiaohongshu launched the first online tide play exhibition and sold more than 270 tide games to try to do e-commerce in the community.

In November last year, Xiaohongshu completed a new round of financing of $500 million, with a post-investment valuation of more than $20 billion, and Xiaohongshu needs a diversified monetization model to maintain development. This may be the main reason for the merger of e-commerce business and community business.

From the perspective of the external environment, Xiaohongshu faces competition from other platforms. For example, Douyin is constantly increasing the grass planting business, launching graphic and text functions in China, and testing the first-level entrance to planting grass, strengthening the connection between the creator's content creation ability and the e-commerce business. Alibaba's Taobao recently launched the "You what" App, positioning itself as an interest in planting grass communities, or generating activities with Taobao, so as to realize the possibility of content with goods; Meituan has also added a grass planting function in the store, users can not only evaluate the store, but also video grass, improving the order conversion rate of merchants.

Whether it is internal development or to deal with external competition, Xiaohongshu needs to increase e-commerce. It remains to be seen whether this adjustment, binding the community and e-commerce to the effect, remains to be seen.