Xiaohongshu Community Department and E-commerce Department merged, how to solve the balance between planting grass and monetization?

Article Author of "Finance and Economics" Weekly Zhao Yutong

Edited by Dong Yuqing

Little Red Book has ushered in new changes. According to media reports, Xiaohongshu has recently made organizational restructuring adjustments, and the original community department and e-commerce department will be merged into a new community department. It is also reported that Conan, COO of Little Red Book, will lead the e-commerce business. In this regard, Xiaohongshu explained in its response: "The merger of community and e-commerce business is a natural iteration of the organization in the process of realizing a common vision. ”

In other words, Xiaohongshu hopes to further open up the community and e-commerce business, so that it is closely integrated, that is, to find a balance between planting grass and monetization, so as to better realize the commercial value conversion of user traffic.

Photo/Visual China

For Xiaohongshu, the ideal path is for users to be planted by browsing community content, resulting in consumption behavior, which brings new sharing and activates interaction within the community, thus driving consumption again and forming a positive cycle. In this process, Xiaohongshu can not only harvest content, but also revitalize traffic, and there is a possibility of boosting e-commerce business. The user's sense of belonging to Xiaohongshu and the use habits have gradually increased, and behind the improvement of user stickiness is actually the establishment and consolidation of the community atmosphere.

However, this is not easy. To some extent, traffic monetization is a common problem of community products.

Starting with a shopping guide, Xiaohongshu's initial positioning was to plant grass and share the community, planting grass content naturally reduces the cost of user consumption decisions, attracting the latter to pay for it, but the original Xiaohongshu, which has a unique advantage, is difficult to leave the transaction link inside the platform, but it is for other e-commerce platforms to make a wedding dress. Since the launch of the "welfare society" in 2014 and the test of the e-commerce business, Xiaohongshu has started its own e-commerce road. In 2018, it gradually opened an offline experience store "Little Red Book" home in various places, divided into six areas of beauty, clothing, home, entertainment and water bar, involving AR makeup trials, smart fitting devices and other experiences. While exploring the new retail field, we will build richer consumption scenarios and complete in-depth interaction with users.

However, according to Caijing, Xiaohongshu's GMV targets for 2018 and 2019 have not been achieved. During the epidemic, the test of its offline physical stores ended with store closures. Correspondingly, Xiaohongshu began to increase its online commercial layout. In 2019, Xiaohongshu split the e-commerce business, and the community e-commerce business department became the brand number department, mainly for the settled brands to carry out marketing and transaction closed-loop services, trying to directly open up content and transaction channels, and the welfare society developed independently; in the same year, Xiaohongshu began to try to broadcast live. In July 2020, the "Little Red Book Brand Support Plan" was launched, from reducing the zero threshold of commissions to tens of billions of traffic support and KOC connections, and the merchants and anchors participating in live broadcasts became the focus of frequent mention. Xiaohongshu embraced the trend of live streaming with goods it saw with practical actions - although compared with the Taobao live broadcast, douyin and Kuaishou that were in full swing at that time, Xiaohongshu did not have a head anchor to match.

What's more, if the premise is to force e-commerce, it will have to face the risks that may come with it - will the community atmosphere change fundamentally due to the pursuit of retention transactions? After all, ensuring the authenticity of notes is an important prerequisite for Xiaohongshu to attract users and brands.

Perhaps for the purity of the content, or perhaps to create its own closed loop, according to a number of media reports, in 2021, Xiaohongshu intends to cut off Taobao and other external links, even the WeChat Mini Program interface that has just been tested is no exception, at the same time, its blow to soft and broad notes is also getting stronger and stronger.

Little Red Book is trying to break through commercialization, but other platforms are also eager to hatch the next "Little Red Book".

In the second half of last year, Douyin began to test the function of planting grass in graphics and texts, and the "grass planting machine" function of Taobao shopping was also launched before the arrival of Double 11, and the combination of product recommendation, use experience and product link is intended to drain traffic. In this way, the e-commerce platform has shown a strong interest in "planting grass".

In this context, it is not difficult to understand the transformation of the Little Red Book, which is free outside the transaction, and it is urgent to sort out and strengthen the relationship between content and transaction, which not only meets the user's grass planting needs, but also penetrates into further transaction links - to some extent, the formation of a complete transaction closed loop is more conducive to the improvement of its commercial imagination space, although the grass is good, it is indispensable to pull the grass.

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