Interface News Reporter | Xiao Fang, She Xiaochen
Interface News Editor | Wen Shuqi
What is Little Red Book?
It is an adjective. For example, this photo is very "Little Red Book";
It is a graphic community, and has even become the only graphic community that young and middle-class users can choose from;
It is a search engine, and more and more people are starting to use Xiaohongshu instead of Baidu to search for all the problems they encounter in life;
It's a trendsetter. From Shanghai's Anfu Road to Hanfu photo tips, from camping to frisbee, Xiaohongshu's content is not only influencing young people's thinking, but also their offline lifestyles.
If you are tired of the shouting of anchors and the noise of short videos, tired of abusive arguments and disagreements on social media, and want to retreat to your personal life and want to be quiet, then you may unconsciously open Xiaohongshu. Users who like it find it more friendly and peaceful than other products. It cares about the individual, for example, no matter what post you make, there will always be someone below who will ask for a link to your outfit.
Xiaohongshu has evolved in this way and has become an internet company with more than 100 million DAUs (daily active users) and a valuation of more than $20 billion in 2021.
But observers, including competitors, struggled to read Xiaohongshu at one point. How does it do this?
In 2019, Xiaohongshu stayed at 20 million DAU for a long time, which made many peers misjudge. Its growth path is indeed very different from the stable development of WeChat and the savage growth of Douyin. A sign that used to hang in the Xiaohongshu office was, "There are no shortcuts to anywhere worth visiting." To some extent, this shows Xiaohongshu's disbelief in efficiency and speed, and the company's culture is different from that of traditional Internet giants.
Now, after hovering around 100 million DAUs for a year, Xiaohongshu has also come to an inflection point of "not advancing or retreating" in the face of the Internet market full of giants. How will it evolve?
Why did Xiaohongshu become mainstream? This is also a difficult question to answer within itself.
Judging from the data results, the epidemic in early 2020 brought a turning point to Xiaohongshu.
During the Spring Festival holiday but unable to go out, many people have the need to learn to make food at home, and Xiaohongshu also stepped on this demand for content operation. In February of that year, the number of daily active users of food once surpassed that of beauty, becoming the largest vertical category. According to QuestMobile, during the 2020 Spring Festival holiday, Xiaohongshu's daily active users increased by 35% year-on-year, and the average daily usage time increased by 44.9% year-on-year - which means that Xiaohongshu began to get rid of the stagnation of DAUs at that time.
Prior to this, Xiaohongshu, which was founded in 2013, was once in operational difficulties. Especially from 2017 to 2018, due to the rise of cross-border e-commerce platforms such as Tmall Global and Kaola Overseas Shopping, Xiaohongshu, which was mainly engaged in cross-border e-commerce business at that time, fell into a growth bottleneck, and the entire company also fell into a huge crisis.
In 2019, Xiaohongshu DAUs have been hovering around the order of 20 million. In this difficult period, the founder Mao Wenchao once thought about the positioning of the platform.
Mao Wenchao published an internal letter at the beginning of the year. In the letter, he mentioned that while Xiaohongshu's various businesses are developing rapidly, they have also received some feedback from the company's employees, external brands and ecological partners, and believes that the company's strategic path, resource integration and cross-departmental collaboration of different business lines need to be further clarified.
As a result of this reflection, Xiaohongshu adjusted its organizational structure, increased its support for community e-commerce, and upgraded the original community e-commerce division to a "brand number" department. It was also in this year that Xiaohongshu executives revealed to Jiemian News that they planned to expand the male market.
In the same year, product manager Song Jian and Mao Wenchao had an in-depth exchange. At that time, Mao Wenchao had actually thought clearly about the positioning of Xiaohongshu and the key data indicators.
At that time, Mao Wenchao believed that the core indicator of Xiaohongshu's success was the search volume per capita. Search per capita means you have information value, not user time. User time means addiction, not informational value. Song Jian said.
Ordinary users did realize the search value of Xiaohongshu after a few years. Around 2023, many Xiaohongshu users told Jiemian News reporters that they began to search for answers to problems in life. In cases where the individual is not much conscious, the frequency of using search engines becomes less.
Because of this, more and more people are realizing that Xiaohongshu has stolen Baidu search's business. With a large number of users and a high degree of activity, and 70% of the content is produced by users, the platform has a huge amount of information that can be updated in real time every day.
According to the official data released by Xiaohongshu, at the beginning of last year, the average daily search volume of the Xiaohongshu app reached 300 million, and more than 60% of users' first action on the platform was searching.
Coincidentally, when Mao Wenchao was thinking about the value of Xiaohongshu's information, Baidu also took the initiative to make way for him.
At that time, Baidu was using the whole company to transform the Baidu App into a product that could allow users to stay longer, and the product form became a search box + graphic information flow. However, in the process of Baidu's migration to the mobile terminal, the internal channels for UGC, such as Baidu Know and Baidu Tieba, have wavered in the form of mobile terminals, missing the best opportunity for growth. UGC content is gradually losing the soil for growth, which also makes it more and more difficult for Baidu to search for effective information.
However, at that time, the content of Xiaohongshu only focused on a few fields such as beauty, and the crowd was also very vertical, and not many people could accurately predict future trends.
Baidu believes that Xiaohongshu's DAU has peaked, and there is no need to worry too much. According to Jiemian News, at that time, some people within Baidu proposed to transform Baidu App into the product form of Xiaohongshu and undertake knowledge and information content, but it was rejected by Baidu's management.
At that time, Baidu's management wanted a product similar to Douyin, and the core logic was Kill time. A user stay of more than 2 hours means that there is a huge space for commercialization, and Xiaohongshu is the opposite.
It was ByteDance that really realized the growth potential of Xiaohongshu, and they responded in the years that followed.
In October 2021, ByteDance launched the graphic function in the Douyin app. At the beginning of 2022, Douyin changed the first-level entrance "Tongcheng" at the top of the homepage to a "Planting Grass" channel to increase exposure. In the same year, ByteDance also launched the independent community app "Ke Song", positioning it as a new lifestyle community for young people.
However, ByteDance's action power was not transformed into a truly successful product, and the "Croissant" App was removed from the shelves after only half a year of operation. A former head of ByteDance products told Jiemian News that on the one hand, Xiaohongshu has achieved sufficient card slots. On the other hand, the internal decision-making mechanism of bytes determines that new products with insufficient weight only look at the data performance during the internal testing process, which will lead to short-sightedness, and it is difficult for new products to catch up through long-term operation.
At that time, some experienced strategists and product personnel judged that if Xiaohongshu wanted to achieve new growth, one direction was to expand the content category, and the other direction was video. It turned out later that Mao Wenchao also saw these two directions at that time, and successively carried out content operations in these two directions.
A veteran employee of Xiaohongshu told Jiemian News in an interview that the Xiaohongshu community has regarded "content generalization" as the core for a long time, but has not found a force point. The arrival of the epidemic has prompted users to pay attention to everything related to "staying at home", deepening their attention to life itself, and category expansion has become logical.
The strategy in 2020 will be called by Mao Wenchao as Xiaohongshu's "coming-of-age ceremony". After the meeting, Xiaohongshu started the campaign of Video 2.0 and 50 million DAU. According to a Xiaohongshu insider, Mao Wenchao and Qu Fang's vision at the time was that users would browse Xiaohongshu in fragmented time, just like watching magazines and TV back then.
By the end of the year, Xiaohongshu's content operation team was split into two teams: the new media group and the trend group. Mao Wenchao also participated in it, determined the "fashion trend" as the first content category, and set a strategy to explore the content of Xiaohongshu's characteristic categories and make it out of the circle.
The trend group is responsible for discovering art exhibitions and fashion bloggers, and the new media group is responsible for spreading the topics and trends excavated on the site. "FamilyMart Bartending" is a hot spot on the whole network that has been fermented by the cooperation of the trend group and the new media group.
This is another key and correct decision, which not only allows Xiaohongshu to continue to grow, but also lays the foundation for its subsequent excavation of more out-of-the-circle content such as camping and frisbee.
"If you operate new content categories out of the circle many times, there must be a methodology. In the view of an industry person who is familiar with product operation, everyone understands the general direction, and the key lies in the details.
Xiaohongshu has a very strong tonal operating principle, and the detailed judgment under the guidelines often relies on feelings. For example, how to make the content form a good reputation, how to make the author's creation resonate with the user's needs, and so on. It is the accumulation of these details that has made Xiaohongshu a mainstream and trendy community.
In the eyes of a person familiar with Xiaohongshu, Mao Wenchao, as the biggest definer of Xiaohongshu, has played the most critical role.
The founders of the Internet industry generally come from a technical background and pursue technology and efficiency, but Mao Wenchao is a special existence among them. He comes from a consulting background and has a deep understanding of branding, strategy and traditional business.
In 2013, Mao Wenchao founded Xiaohongshu in Shanghai. After graduating, Mao Wenchao, who joined Bain & Company, has a good income and has a great passion for shopping and quality of life. Even when looking for an office after starting a business, he asked for an "excellent" office environment.
"He is very lacking in the Internet industry, and the luxury industry can find such talents. The above-mentioned person said.
According to Sun Ping, an associate professor at the School of Journalism and Communication at the University of Chinese Academy of Social Sciences, Xiaohongshu's users are much higher than similar social platforms in terms of social class and gender aggregation. Xiaohongshu users have several distinct tags: middle-class, feminine, sophisticated.
From a more macro perspective, the rise of Xiaohongshu has stepped on the needs of first- and second-tier middle-class users to express and pursue consumption and lifestyle. Before the popularization of mobile Internet, this kind of content demand was also met by traditional media such as "Boutique Shopping Guide", but the scale of users that mobile Internet can reach is obviously larger.
Sun Ping believes that at this stage, the domestic "middle class" and student groups are increasing, and everyone is looking for new "aspects", from focusing on grand trends to paying more attention to individuals and themselves, which is indeed an obvious trend for young people.
Another phenomenon is that in societies where involution is intensified, people tend to become Buddhist, and their enthusiasm for public topics decreases. Correspondingly, there will be an increased desire to share or talk about one's personal life – an important reason for Xiaohongshu's growth.
A Xiaohongshu insider also told Jiemian News that Xiaohongshu does not care about grand narratives in terms of overall content tonality, but more about individual growth. Not doing social information and entertainment news is also the result of its active choice.
At the end of 2020, Xiaohongshu achieved its goal of 50 million DAU.
The feedback brought by the data is direct and effective, and it also makes Xiaohongshu more confident to move in the established direction of operation, and dig out topics and content in more categories.
In 2022, scenes of young people playing frisbee can be seen everywhere in the sports arenas of Beijing, Shanghai, Shenzhen and other cities, which is the best way to promote Xiaohongshu and make it more and more mainstream.
From 20 million to 50 million DAUs, it took Xiaohongshu more than a year, and from 50 million to double, Xiaohongshu still only took more than a year, and the growth of the latter stage can show the huge momentum of Xiaohongshu.
Along with the influx of users, it is the brand side.
During the epidemic, major brands have cut their marketing budgets, and Xiaohongshu is one of the few "cost-effective" publicity positions. Their influx has brought richer content to Xiaohongshu and endorsed Xiaohongshu's entry into the mainstream of the world.
Until 2022, Xiaohongshu's main revenue is advertising business, including different advertising forms such as integrated marketing services, hard advertising, and information flow, and advertising revenue accounts for more than 80% of Xiaohongshu's revenue.
In 2019, Xiaohongshu established a commercial department, and in 2020, Zhiheng was in charge of the advertising business as an "airborne trooper" sent by investors. During this period, the advertising business was almost the only pillar of Xiaohongshu's income.
2020 is the hottest year for new consumption. At that time, new consumer brands were in the midst of an intensive "wave of listings". Well-known consumer brands such as Yatsen E-commerce, Bubble Mart, and Nai Xue's Tea have all been launched in the 2020-2021 biennium, and Xiaohongshu has benefited from this.
However, a service provider told Jiemian News that the commercialization team built by Xiaohongshu in the early days came more from advertising companies and traditional e-commerce, and its understanding of the community was not enough. In 2022, Xiaohongshu will dig up a group of ByteDance employees before gradually building an advertising model.
Mao Wenchao's ambitions don't stop there. A member of the founding team of Xiaohongshu told Jiemian News that Mao Wenchao had thought about building his own closed loop of trading from the beginning, and he firmly believed that the business of advertising and diversion could not be sustained.
However, how to integrate e-commerce with the community has always troubled Mao Wenchao.
Xiaohongshu once vacillated between the positioning of "e-commerce" and "community", and until 2020, it clearly avoided giving the outside world the perception of "e-commerce".
But as a community that started with "cross-border shopping strategies", e-commerce is not in its genes and choices. It can even be said that the starting point of the commercialization of Xiaohongshu was the launch of the self-operated mall of the "Welfare Society" in 2014.
According to the data released by Xiaohongshu at the time, within five months of entering e-commerce, the platform sales reached 200 million yuan.
Xiaohongshu has been operating the self-operated mall "Welfare Society", which was launched in 2014, and after camping became popular in 2022, Xiaohongshu has launched a mall "Little Oasis" that focuses on outdoor products. But the operation of the two was not successful, and the two products will be rolled off the assembly line in 2023.
E-commerce is a business in the final analysis, and it needs to achieve the ultimate in transformation and control of the supply chain. In the opinion of a person familiar with Mao Wenchao's life, Mao Wenchao, who was born in consulting, is good at strategic planning and guiding community development, but doing community and e-commerce are completely two different ideas. Xiaohong's earliest head of e-commerce business was also a friend she met with Mao Wenchao when she interned at McKinsey & Company.
Last year, Xiaohongshu finally found a new way for e-commerce to integrate into the community - live e-commerce.
During the Double 11 in 2023, the sales of stars Zhang Xiaohui and Dong Jie in a single live broadcast on Xiaohongshu exceeded 100 million. It can be said that Dong Jie and Zhang Xiaohui are the "bets" of Xiaohongshu's two victories.
So far, Xiaohongshu's attitude towards e-commerce is no longer shy about it, and the e-commerce department has begun to greatly expand the recruitment of various positions. Conan, COO of Xiaohongshu, said in a public interview that there is no contradiction between community and business, and that the community has its own originality and growth, and building a business system along the original user needs and business ecological links is the most suitable path for Xiaohongshu.
According to the Financial Times, Xiaohongshu is profitable for the first time in 2023.
However, judging from the past growth of community apps, Xiaohongshu is currently in a very delicate stage.
After DAU stabilized at around 100 million, Xiaohongshu's growth slowed. According to Leifeng.com, Xiaohongshu once set a goal of reaching 140 million DAUs in 2023, but it was not achieved. In the first two months of this year, with the blessing of the huge influence of CCTV's Spring Festival Gala, Xiaohongshu DAU still had limited growth.
From the perspective of user composition, Xiaohongshu is similar to Douyin in the early days, while Douyin is doing user growth in the sinking market, and the current DAU has exceeded 600 million. While expanding users in different circles, Douyin's content has also expanded from trendy content such as music and dance in the early days to more diversified content such as information and entertainment, and the tonality no longer caters to the aesthetics of early first- and second-tier middle-class users.
Similarly, in the early days, Zhihu, which had a clear community tonality, continued to expand after the users reached a certain scale, and new users diluted the original community atmosphere, but the platform did not grow into a more popular platform.
The subtlety of Xiaohongshu is that it can go up and down — it has the potential to continue to grow as a mass platform, but it could also sink if it is not properly managed.
Emphasizing the value of information, "useful" is the label that Xiaohongshu has always labeled itself, but this thinking is changing. According to a report by LatePost, a Xiaohongshu person said that they found that playing "useful" points, no matter what they do, may not reach the target level of users.
Xiaohongshu began to superimpose "interesting" on top of "useful", trying to broaden the dimension of content, and this year's cooperation with the Spring Festival Gala is a symbolic change of thinking.
But the Spring Festival Gala project was carried out quite hastily, and the project only began to prepare for the 70-day countdown. In fact, Xiaohongshu also lacks experience in participating in such big projects, so it can only add ideas that fit its own tone in constant brainstorming.
Originally, Xiaohongshu planned to do a live broadcast with goods, allowing users to buy the same style while watching the Spring Festival Gala. But later it was found that the audience may be really interested in the Spring Festival Gala itself. So after planning for many days, the plan was overturned again and again and changed direction.
When there were still more than 20 days before the Spring Festival Gala, Xiaohongshu decided on the live broadcast form they wanted to benchmark - a talk show similar to "Kangxi is coming". The planning team sees this kind of exploration as Xiaohongshu's embrace of creativity. However, in terms of final data, the Spring Festival Gala project did not achieve the effect of growth and commercialization, and the internal evaluation did not meet expectations.
Xiaohongshu, which focuses on "fine living", has not considered the lower-tier market, but they still want to maintain the current community atmosphere. Even when communicating with the outside world, Xiaohongshu has avoided mentioning the word "sinking" and replaced the incremental users they are trying to find with a "broader user group".
A former employee of Xiaohongshu's community department told Jiemian News that in 2020, Xiaohongshu sent some teams to small cities to do research, but generally felt that it was difficult to integrate.
At that time, an operator who participated in the "sinking" experiment was responsible for maintaining Xiaohongshu bloggers with less than 100,000 followers, and they tried to do a lot of more down-to-earth topics, hoping that bloggers would actively participate, but the volume of topics rose very slowly, and the internal did not continue to insist on it in the later stage.
In 2023, Mao Wenchao will take a team of more than a dozen people to the lower-tier cities for research, but the cities he chooses are very different from the sinking markets understood by the outside world. They went to Jingdezhen, a small city in Jiangxi. In August of that year, Jingdezhen ranked second on the hot search list in the field of cultural attractions in Xiaohongshu's cultural tourism industry, which was the premise for Xiaohongshu to notice Jingdezhen.
A person from a business organization who participated in the survey told Jiemian News that Xiaohongshu chose Jingdezhen because the local temperament is more consistent with Xiaohongshu.
Even if Xiaohongshu can let go of its hands and feet and sink at the cost of changing the community atmosphere, the sinking market that has been occupied by Doukuai may not be able to accommodate Xiaohongshu. What's more, Xiaohongshu has not yet found the posture of "going to the field" - when recruiting for the position of community ecological high-heat content operation, the first requirement put forward by Xiaohongshu is to mine the head content, but it must conform to the tonality of the platform.
This means that Xiaohongshu is still cautious about the next user growth, and this intention can be seen from the DAU target it has set this year - trial and error before you understand it, until you figure it out, which is also the strategic thinking that the company has adhered to since its inception.
In the construction of advertising products, Xiaohongshu's tools are also still being polished.
A brand contacted by Jiemian News said that on Douyin, advertisers want how much ROI they want, and they choose the corresponding tags according to the background, and the results are almost the same as expected, and the tags they can choose are several times that of Xiaohongshu.
In February 2023, Xiaohongshu released the product grass planting indicator "TrueInterest Grass Planting Value". A former employee of Xiaohongshu's commercial department told Jiemian News that the project was canceled around the middle of the year, and the reason why it was difficult to move forward was that it could not achieve the quantifiable goals that brand customers wanted.
"I didn't think about what to do", this is the common feeling of the interviewed employees.
For brand owners, under the premise that Douyin, Kuaishou and even Weibo are fully explored, cheap traffic can still be found in Xiaohongshu. This is the premise that they are willing to put it on, but this is not good news for Xiaohongshu.
For live streaming e-commerce, the industry recognizes that the two major challenges are the industry ceiling and the supply chain. For the former, Xiaohongshu is encouraging more small and medium-sized bloggers to start broadcasting and copying more Dong Jie and Zhang Xiaohui. But in the supply chain, Xiaohongshu is more difficult to make up for classes.
A person in the live broadcast industry who entered Xiaohongshu last year said that Xiaohongshu officials will recommend some very "Xiaohongshu" brands to them, but the number is limited, and the selection pool needs to be expanded urgently - the overlap of three bloggers in the same period can reach 60%.
The most difficult thing about doing e-commerce is not technology, but the supply chain. A person who has participated in the platform's self-built live broadcast e-commerce closed-loop told Jiemian News that on the basis of solid technology, it took more than two years for his platform to establish a mature supply chain including investment promotion and logistics.
But in the view of a person who has worked in both Douyin and Kuaishou's e-commerce divisions, all the strategic swings and back-and-forth of Xiaohongshu are something that the company at this stage must experience, and Xiaohongshu's management team should not be too harsh.
Fortunately, after years of exploration and trial and error, Xiaohongshu now has a relatively clear development direction. In terms of organizational structure, Xiaohongshu has formed three major sections: the Community Department, the Business Department and the Trading Department. Among them, the trading department was established in the second half of 2023, which was formed from the original e-commerce business and live broadcast business, and the person in charge is COO Conan.
In 2019, Mao Wenchao and Qu Fang imagined the future of Xiaohongshu. At that time, Qu Fang's answer was that "there is a high barrier to user value, which is the mental entrance to the lifestyle, and cannot be replaced in the next five years." It has initially completed the exploration of commercial value and has become one of the most important platforms related to domestic lifestyle. ”
Today's Xiaohongshu has preliminarily completed the original vision of Mao Wenchao and Qu Fang, but in the rapidly updated and iterative mobile Internet industry, Xiaohongshu's current scale has not yet reached the safe zone.
There are already too many precedents for the Internet to get stuck in place or even backwards because of limited growth. The expansion of the user base will inevitably bring about a change in the direction of the atmosphere, and the progress of commercialization may also lose user experience and reputation. For Mao Wenchao and Xiaohongshu, who have a unique middle-class aesthetic, every step after becoming the mainstream must be careful.
Will it find its last way to break through?