The live broadcast business became an independent department, and Conan led the commercialization of the product.
Wen 丨 Gao Honghao
Editor丨Huang Junjie
"LatePost" exclusively learned that Xiaohongshu will upgrade the live broadcast business to an independent department to manage live broadcast content and live e-commerce and other businesses in a unified manner. The new department head is Yinshi (flower name), who is also the head of community ecology in Xiaohongshu. Prior to this, Xiaohongshu's live broadcast business belonged to the business group of the second-level department under the Community Department.
It is also understood that Xiaohongshu's commercial product team has been managed by Conan (Hua Name), COO of Xiaohongshu and head of the community department (under the jurisdiction of community business and e-commerce business) this year. She also became Head of Commercial Technology in 2022. At present, the advertising sales business is still under the responsibility of Xiaohongshu CMO and sales leader Zhiheng.
Xiaohongshu has long attached importance to community governance, and in the past, how much traffic the platform opened to e-commerce and advertising has always been controlled by the community department, which has also led to a long-term game between several businesses, and Xiaohongshu is also facing the situation that the three major businesses of advertising, e-commerce and community are incompatible with each other. This personnel adjustment means that Xiaohongshu has finally decided to solve the commercialization and community dispute that has plagued it for many years.
Conan and Yinshi are not only the key executives deeply involved in community building, but also the core leaders of ensuring the ecological health of the community, and they also have the most resources and ability to balance the relationship between commercialization and the community. In January 2022, Xiaohongshu took the lead in adjusting the e-commerce department to a second-level department under the community department, which is unified by Conan.
The live broadcast carries both the Xiaohongshu community and the future of commercialization. Live streaming is a means for Xiaohongshu to continue to grow in acquiring customers and attracting creators after graphics, texts and short videos; At the same time, it also carries Xiaohongshu's important mission of accelerating monetization and expanding e-commerce business - the internal loop advertising brought by live streaming e-commerce is becoming one of the most important sources of revenue for companies such as ByteDance and Kuaishou.
According to the information obtained by "LatePost", ByteDance's advertising revenue in China in 2022 will be about 330 billion yuan, of which Douyin e-commerce (mainly live broadcast sales) brought more than 120 billion yuan in advertising revenue; The revenue from live streaming tips reached more than 130 billion yuan (including commissions distributed to anchors).
Since its establishment, Xiaohongshu has not expanded commercialization in a radical way in order to ensure the healthy development of community ecology. It's just that today's internal and external environment is different - Xiaohongshu's daily active users are about to exceed 100 million, but it is not yet profitable, and the listing prospects are not clear, and large platforms such as Douyin and Toutiao are still frequently challenging it. These changes have determined that Xiaohongshu will no longer be able to continue to try commercialization as slowly as it has in the past.
Live streaming e-commerce has become the hope of Xiaohongshu's commercialization
Compared with platforms such as Douyin, Kuaishou and Taobao, Xiaohongshu's live streaming business started later - it was not officially launched until 2020. The product, which started with graphic content, has been cautious about changing the shape of its community. An insider told LatePost that one of the first backgrounds for Xiaohongshu to promote the live streaming business was the rise of live streaming goods.
Community and e-commerce are Xiaohongshu's two parallel main businesses. But for a long time, Xiaohongshu did not prove that they could work well together on this platform: on the one hand, users have limited minds, they are either mainly shopping or buying, and there is little precedent for the coexistence of the two; On the other hand, although users have the habit of planting grass in Xiaohongshu, the chain of purchasing goods from the blogger referral-oriented mall is too long, and the conversion rate is low. In this process, there is also the risk that users will lose due to price comparison on other e-commerce platforms.
There is also a game between the two businesses. Community has always been Xiaohongshu's core business, and the platform's traffic distribution largely needs to give priority to the needs of the community, followed by e-commerce business.
The emergence of live streaming e-commerce has allowed Xiaohongshu to see new opportunities. The form of live broadcast can stimulate users to complete the behavior of planting grass + consumption in a short period of time, greatly improving the conversion efficiency. A Xiaohongshu person recalled that in the testing phase alone, there was a situation where 200,000 fan bloggers had a single sales of more than one million yuan on the platform.
Xiaohongshu is still restrained when doing live streaming e-commerce. Initially, it only displayed the live broadcast room in private domain traffic, that is, if users want to watch a blogger's live broadcast, they must click through from the blogger's flashing avatar and follow page. This design means that users enter the live broadcast interface actively selected rather than forced by the platform, which can minimize the impact of live streaming on the community atmosphere.
Xiaohongshu's relatively peaceful and emphasis on quality and style, the community atmosphere naturally filters out a large number of "hawking" live broadcast rooms. For example, Yang Tianzhen before and Dong Jie who recently came out of the circle in the live broadcast room were all told through narration, attracting a large number of customers, "which has a positive impact on the community atmosphere." The above-mentioned Little Red Book source said. According to official data, Dong Jie had more than 2.2 million views on Xiaohongshu's second live broadcast, and a single live broadcast GMV exceeded 30 million.
However, if live streaming e-commerce only stays in private domain traffic, the ceiling is obvious. Kuaishou is a typical example, this short video platform with nearly 400 million daily active users has proposed the concept of "trust e-commerce", that is, emphasizing the value of private domain traffic and fan repurchase, but it has proved that the benefits of this model are relatively limited.
A Xiaohongshu person told "LatePost" that at the end of 2021, Xiaohongshu CEO Mao Wenchao said at an internal meeting that Xiaohongshu's growth comes from the community, and transaction is an important part of community life, so to put e-commerce in the community, the user's consumption mind should be cultivated in the community, and the transaction ecology of merchants should also be produced in the community. In 2022, the e-commerce department, which was originally a first-level department, was transferred to the community department and was managed by Conan, the community leader; At the same time, Xiaohongshu opened the internal test, changing the "e-commerce" entrance at the bottom of some users to "video".
These adjustments show that Xiaohongshu e-commerce will become the foundation of the community in the future, integrating and collaborating with various businesses, rather than just existing in the form of an independent mall. In order to promote growth and monetization capabilities, live streaming content will inevitably further step out of the private domain traffic pool and be widely seen by users on the core discovery page. How to smoothly complete this step while continuing to strike a balance between commercialization and community atmosphere will be one of Xiaohongshu's next tests.
DAUs are close to 100 million
Xiaohongshu now has nearly 100 million DAUs, and if it wants to achieve further growth, it will inevitably face head-on competition with platforms such as Douyin and Kuaishou. "At present, the first motivation for users to open Xiaohongshu is search, but the proportion of purposeless loitering behavior is continuing to increase." A person close to Little Red Book told LatePost.
ByteDance's Douyin and Toutiao have been exploring the double-column graphic content of Xiaohongshu in their existing products for a long time. "Douyin realized in 2021 that there is a group of users who can't take anything from Douyin who are very active on Xiaohongshu." A TikTok source said. This group of people is regarded by Douyin as an important source of user increment after its own growth enters the saturation stage. By the end of 2022, Douyin's main app DAU was around 590 million; Kuaishou main app DAU is 220 million.
However, Xiaohongshu has unique advantages that Douyin does not have. First, good community construction, which brings high fan stickiness and excellent creative atmosphere to creators; Second, although Xiaohongshu, which is mainly in the form of double-column content, is inferior to Douyin, the user's information acquisition efficiency in it is higher, and the "practicality" of the product is significantly higher than that of Douyin; Xiaohongshu users' advertising ARPU (average revenue per user) is only about half as low as Douyin's.
Whether it is Toutiao or Douyin, it will be a long process to build graphic content from scratch and introduce creators. Taking Douyin as an example, the focus of its graphic and text special project is still to comprehensively benchmark Xiaohongshu, including increasing the number of creators with more than 50,000 followers of Xiaohongshu, and further increasing the number of key vertical content such as tourism/camping, food, fashion, science and technology, and national style. However, after trying for two years, the graphic content that really conforms to the "Little Red Book Style" accounts for only 5% of all graphic content on Douyin.
How to break through the bottleneck of commercialization is another of Xiaohongshu's current most prominent challenges.
Xiaohongshu's commercialization started later and was relatively restrained. For example, advertising has not been opened to several leading industries such as education, games, and finance. At present, Xiaohongshu's open advertising is more concentrated in vertical industries such as beauty and personal care, clothing, maternal and baby food, luxury jewelry, and automobile travel.
In the past, advertisers used to run brand ads in Xiaohongshu. Once an ad is running, advertisers don't get more accurate feedback on marketing data. In the context of the economic downturn, advertisers will be willing to put their budgets on platforms such as Douyin and Tmall that can directly bring sales. In addition, Xiaohongshu's algorithm recommendation and advertising infrastructure capabilities are also significantly inferior to Douyin. In the long run, this will constrain the continued development of Xiaohongshu.
"LatePost" learned that Xiaohongshu will focus on increasing the proportion of performance advertising this year, including attracting more brands to enter Xiaohongshu e-commerce and conducting e-commerce live broadcasts, so that their advertising directly converts on Xiaohongshu. At the beginning of 2023, Xiaohongshu also set up a local life advertising team, hoping to find incremental opportunities from more vertical fields that are in line with the positioning of Xiaohongshu's platform. In the recent organizational adjustment, Anzai (flower name), the former head of growth of Xiaohongshu, has also been transferred to the commercialization department to be responsible for related business.
As the economy begins to recover in 2023, the advertising industry picks up at the beginning of the year, and Xiaohongshu will also verify its true commercialization potential this year.
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