Recently, Xiaohongshu was once again exposed to listing rumors, although the official said that it would not respond to this for the time being, but the news about the listing is not uncommon in Xiaohongshu. In December last year, it was reported that it may be listed in Hong Kong in the second half of 2024 at the earliest, and judging from various indications, 2024 seems to be really a "lucky year" for Xiaohongshu.
In October, the Financial Times reported that Xiaohongshu had sales of just over $1 billion and a net profit of $200 million in the first quarter of this year. Although this figure does not come from Xiaohongshu's official website, as early as last year, Xiaohongshu turned a profit, with a net profit of up to $500 million for the year.
Flowers and applause followed.
According to QuestMobile's 2024 data, Xiaohongshu is currently the third-party content platform with the largest user base in addition to Alibaba, Byte, and Tencent. At the same time, the 2024 global unicorn list released by Hurun.com shows that Xiaohongshu is worth 100 billion yuan, ranking 26th.
So, is Xiaohongshu's time to market really coming? Whether it's true or false this time, it's safe to assume that Xiaohongshu, which has been gearing up for several years, really can't wait.
The Internet collectively "reinvents" Xiaohongshu
When Douyin Kuaishou hit the social circle with short videos, it didn't keep up in time, and when live streaming reshaped the e-commerce market, Xiaohongshu's entry into the game was also slow.
Today, Xiaohongshu's "slowness" has become a major feature of the platform itself in the fast-paced online world, and because it leaves too much time for opponents, many major Internet companies want to copy the next "Xiaohongshu". Since around 2018, the entire Internet track has begun to try to reproduce Xiaohongshu.
According to incomplete statistics, from 2018 to 2022, major Internet companies have at least 15 experiences of creating "Little Red Book", including Douyin, Tencent, Taobao, Pinduoduo, Meituan...... Until this year, Douyin has not given up coveting the grass-growing economy behind Xiaohongshu.
Tech Planet reported that at present, Douyin has restarted the grass-planting platform "Ke Song", which has been removed from the shelves for nearly two years; Lemon8, created by Byte's overseas team, also once topped the App Store living area list in the United States market; Coincidentally, Meituan is also testing new services in an attempt to create a "takeaway" version of Xiaohongshu.
Xiaohongshu, which has always been at the center of the sniping range of the entire Internet track, even if the surface is glamorous, the panic of being imitated at any time and being prepared to surpass it is still growing day by day. And what is there about Xiaohongshu that is worth being collectively worried about by the Internet giants? This may be worth looking into.
On the one hand, short video players such as Douyin and Kuaishou are increasingly interested in Xiaohongshu, which is mainly based on pictures and texts, which is directly related to the growth period of the end of the short video dividend. When short video platforms face bottlenecks in content development, the traditional graphic ecology may become the best choice to fill the gap in their future content.
Judging from various data, the traffic value and commercial value of graphics and texts have indeed begun to rise. Taking Douyin, which is the most enthusiastic about the layout of graphics and texts, as an example, it is reported that on average, more than 7 percent of active users on Douyin read more than a dozen pictures and texts every day, and the average interaction rate of pictures and texts on the platform is 1.32 times that of videos, and the collection rate is 1.47 times that of the latter.
As for the commercial value, the huge graphic content is the basis of the grass economy, which Xiaohongshu has long given the answer, a Nielsen study shows that 47% of users are planted with new products in Xiaohongshu, and almost every month, more than 120 million users seek purchase advice in Xiaohongshu.
The value of this community atmosphere is directly reflected in the platform's advertising revenue.
Frankly speaking, Xiaohongshu's ability to turn losses into profits in the past two years has an obvious causal relationship with online marketing, which accounts for up to 80%. After all, in the second quarter of this year, the growth rate of advertising revenue of major Internet companies slowed down, and only 5 of the 12 companies counted by "Growth Factory" exceeded 10.9% of the overall market growth.
On the other hand, under the backdrop of the grass economy, Xiaohongshu's live broadcast e-commerce seems to have stepped out of a "utopian" style. Especially during this period of time, various big anchors have staged house collapse dramas one after another, incomplete statistics, 2024 has not ended, and 16 Internet celebrities have collapsed one after another, basically from big platforms such as Douyin and Kuaishou.
Interestingly, after the collapse of the Internet celebrity circle, many big anchors began to deliberately avoid the limelight, stopping the broadcast, and stealing the invisible. The possibility of a big tree is making people set up rampant traffic eras, and there are gradually signs of collapse.
But Xiaohongshu is different, compared with the anchor's personal personality, the exquisite atmosphere of the platform's overall quiet years seems to be the key to impressing fans, on Xiaohongshu, Dong Jie and Zhang Xiaohui can get out of the circle, and even Li Dan can be "whitewashed". If the drama between Douyin Kuaishou and the big anchor is the absurd story of the former losing control of traffic, then Xiaohongshu firmly grasps the control in its hands.
Qiangua data shows that from January to June this year, the proportion of waist experts in the TOP100 of Xiaohongshu's live broadcast sales list is the largest, and the proportion of waist talents with fans below 500,000 is as high as 6 percent, and sometimes, even anchors with less than 5,000 fans can rank among the top 100 in live broadcasting.
In addition, the difference in the interaction between head and tail bloggers on Xiaohongshu is only 30 times, which undoubtedly makes Douyin and Kuaishou, who have always wanted to "go to the big anchor", envious, because in comparison, Douyin's value is about 140 times, while Kuaishou is about 440 times.
The Internet has been trying to recreate Xiaohongshu, which is not only not a glory for Xiaohongshu, but a potential hidden danger, it is like a lamb chased by a pack of wolves, and if you are not careful, you will be bitten all over the body.
It is not enough to rely on the "grass economy".
Looking back at the birth of Xiaohongshu, in 2013, a PDF of "Xiaohongshu Outbound Shopping Strategy" on the Internet suddenly became popular, with a cumulative number of more than 500,000 forwards within a month, and Xiaohongshu was officially established.
In 2014, Xiaohongshu introduced the form of notes that has been used to this day to test the waters of cross-border e-commerce; In 2017, Xiaohongshu focused its traffic on living communities; In 2019, the commercialization process began...... Since then, the platform has become an important channel for the consumer market to explore new momentum.
In recent years, almost every new consumption concept that has stepped on the trend has appeared on Xiaohongshu, such as cycling, frisbee, camping, niche travel, dopamine dressing, local food, ...... Data shows that as of September 2023, there are more than 200,000 products from more than 100 industries, which are searched and discussed on Xiaohongshu.
This also makes Xiaohongshu popular with major brands. It is reported that Luckin has 780,000 fans on Xiaohongshu, and Heytea and Bawang Tea are also more than 500,000.
This number of followers is even higher than many bloggers on Xiaohongshu. According to QuestMobile, the number of bloggers with less than 500,000 followers on Xiaohongshu now accounts for 73% of the total number of bloggers on the platform. The voice of the brand is greater than the voice of the talent, which is something that is unlikely to happen on platforms such as Kuaishou and Douyin.
Therefore, the consequences of this gap are also clear: the platform is gradually starting to proliferate with advertisements. In fact, it is not surprising that advertisements everywhere are in today's Internet world, but it is worth beware that when users fall into the encirclement of brand marketing, it is easy to lose judgment, and once the authenticity of the content is in doubt, it will definitely overdraw the user's trust in the platform.
What's more, the development of Xiaohongshu's grass-planting economy has not collapsed since then. In the early years, showing off wealth, medical beauty, and tourism all dragged the platform forward, and even between May and June this year, an overseas travel package on Xiaohongshu exploded, affecting more than 100 people, involving an amount of 1.7 million.
When the "grass economy" is out of control, the backlash against users, brands, and platforms is obvious.
Looking at the user level first, survey data shows that as many as 72.4% of consumers are misled by false information in the process of planting grass with shared content. Of course, the final bitter fruit has to be tasted by the platform itself, as evidenced by Questmoblie's data, as of April this year, Xiaohongshu's daily active users have increased by less than 10 million.
Looking at the brand level, Xiaohongshu's note fraud was in an uproar that year, and the platform banned 29 brands "in one go", including high-profile brands such as Dove, Neutrogena, and Half Mu Flower Field. Today, Xiaohongshu is very strict in reviewing advertisements, forcing many brands to switch to other platforms.
At the end of last year, "Jianshi Technology" launched an annual survey, mainly investigating which platforms companies will increase their investment in in 2023, among which WeChat, which has initially formed the Channels ecosystem, ranks first, accounting for more than 32%; Douyin is second, accounting for more than 25%; Xiaohongshu ranked third, accounting for 21%.
In 2024, the grass planting business that allowed Xiaohongshu to thrive at the beginning may not have the ability to keep it running wild, on the contrary, at the stage when the platform is bent on e-commerce, over-reliance on the traffic brought by the grass planting model is likely to drag the platform and the brand into an "abyss of trust".
And "trust" is the main tone of the post-e-commerce era. During this period of time, the top anchors collapsed one by one, which is also related to the original source of the entire track. Perhaps, no one is looking for trouble with Xiaohongshu anchors, partly because the platform style is independent, but more importantly, the current Xiaohongshu e-commerce is not big enough to attract attention. Whether this is a blessing or a pity, the answer must have been known for a long time.
Xiaohongshu e-commerce "unsociable"
It is undeniable that the reason why Xiaohongshu's e-commerce business has been able to make some splashes in the past two years is because it has cleverly chosen a path of "dislocation competition". When most e-commerce platforms are hoarse and try their best to link and "gift" their families with small commodities of nine yuan and nine, Xiaohongshu is looking for the value of life.
Avoiding the edge of mainstream e-commerce platforms, Xiaohongshu has indeed received some praise in a short period of time, but in the long run, Xiaohongshu e-commerce, which is incompatible with the entire consumer market, may still not withstand too much scrutiny.
The first thing to bear the brunt of is the pallet, and until now, the most common ones in the Xiaohongshu live broadcast room are some niche international brands and designer brands. Previously, Zhang Xiaohui had 57 links on the shelves in the live broadcast room, of which 38 were overseas niche brands, and coincidentally, Yi Nengjing also brought a number of overseas niche brands such as 3LAB, PierAuge, and Vegamour into the live broadcast room.
However, there are two issues that Xiaohongshu needs to pay attention to when joining hands with niche brands:
First, the dividend period of overseas niche brands in China can be traced back to around 2017, as of 2024, most of the high-quality resources have already been divided, this year's Double Eleven, there are more than 1,700 overseas merchants settled in Tmall Global, this month's pre-sale stage, Tmall Global more than 950 overseas brand transactions have doubled year-on-year.
Obviously, the contact between the leading e-commerce platforms and overseas niche brands predates Xiaohongshu, and now there is a resurgence of momentum. This will inevitably have a certain impact on Xiaohongshu.
Second, compared with platforms such as Taobao and Douyin, Xiaohongshu has always played a "drainage" role in front of brands, rather than a mature e-commerce channel. For example, the current e-commerce platform is short-handed, and the skill that each company likes to show off the most is undoubtedly "bargaining power", but Xiaohongshu has no record in this regard.
Surveys have shown that niche brands themselves have the problem of high premiums, and most of them are sold at a higher price on Xiaohongshu than other channels.
United States 3LAMM cream is priced at 2,850 yuan in the live broadcast room of Yi Nengjing, and the price is only 2,329 yuan in global stores; ReVive Youth Essence Oil, the price of Tmall Global self-operated store is 1898 yuan, and the price is 2180 yuan in Zhang Xiaohui's live broadcast room; Italy My organics' shampoo and hair care set, Zhang Xiaohui's store price is 359 yuan, and the global store price is 300 yuan.
Although the platform's unique Buddhist tonality acts as a "protective umbrella" for poor bargaining power at a certain level, Xiaohongshu needs to understand that while it is still immersed in the sweet dream of quiet years, the wind direction of the entire consumer market will not change, and only "cost-effective" can attract consumers is already the general trend.
According to data from the Bureau of Statistics and the Post Bureau, the average unit price of parcels on the whole network from January to February 2024 was 78.3 yuan/piece, a decrease of 28 yuan/piece from the same period last year. Of course, Xiaohongshu can adhere to its scarcity style with a high unit price, but when the price of the same product deviates on different platforms, consumers' choices are self-evident.
Since last year, the preference for "white labels" in the e-commerce track has gradually become obvious, and perhaps Xiaohongshu has also realized this trend and began to try to change the pallet category. In a survey, Karth Data mentioned that in recent months, Xiaohongshu has quietly increased its recommendation for white-label products and factory-based storecast accounts.
But change requires more than just platform determination. Before soliciting a white label, the control of the supply chain, the maturity of after-sales service, and even the user's mind...... Each item is crucial, and if the unsociable Xiaohongshu wants to keep up with the e-commerce market, it is absolutely impossible to be anxious, so is the listing.
The Tao is always reasonable, and he used to use the name Crooked Dao, the Internet and new media in the technology circle. This article is an original article, and any form of reproduction without retaining the author's relevant information is prohibited.