Why do I get more and more and I don't understand Xiaohongshu anymore

Author | Lan Binsheng

Edit ｜ Sang Mingqiang Ye Jing

Xiao Hongshu founder Qu Fang once mentioned last year that the future brand in her mind should be "complete and different", but the current Xiaohongshu seems to be neither open nor different.

Under the pressure of the first -level market, Xiaohongshu has gradually blurred the direction he wants in recent years. The frequent business actions appear a little irritable. Fang Yue pushed further, which made Xiaohongshu, who was nicknamed "B.", experienced a great change from the "grass planting platform" to "encyclopedia", and became more in the process of "innovation iterative". Come to others.

The choice of strategic positioning and direction, in fact, Xiaohongshu has experienced in the starting period. Established in 2013, "International Tourism Shopping" was a blank market at that time. The founder Mao Wenchao and Qu Fang found the opportunity to enter the game smoothly with a PDF of "Little Red Book Outbound Travel Guide". During the 7th Spring Festival holiday in 2014, there was no promotion of Xiaohongshu, which ushered in the first explosive growth of the number of users. It followed the infinite extension of the content boundary of the community. Whether to introduce purchasing to enter the community to shorten the user trading chain became an important choice facing Xiaohongshu at that time.

Mao Wenchao and Qu Fang chose. They believe that what Xiaohongshu needs in the early stages of development is to improve user stickiness and create differentiated brands through content focusing, so decide to temporarily only share the content of shopping, and try to pursue the quality of the community content, and even design a driver's license. The deduction system is eliminated from the community.

At that time, at the critical period of the small red book A round of financing, it was carrying the expectations of the investor's growth in the size of the user. The founding team finally chose the old path to maintain the growth of user growth. Now Go back to the core question of the business world again: what to do and what to do.

01 Xiaohongshu is anxious to tell new stories

"Small step iteration, trial and error run" is the secret of the success of all Internet companies. The Internet, especially the consumer Internet for C -end users, is not allowed to be slow. The effective play, coincidentally, has been regarded as a "slow company" Xiaohongshu, which has been regarded as a "slow company", and has also begun to mention the speed on the road of commercialization.

Talking about the commercialization path of the content platform alone, Xiaohongshu almost played it. Among them, e -commerce has gone the longest, but the effect is also the worst. In 2014, Xiaohongshu entered cross -border e -commerce and launched the "Welfare Society" in the trend. It adopted the B2C self -operated model to try to solve the problem of "difficult to buy" overseas shopping. At the same time, NetEase Koala, Tmall International, and JD.com have also entered the market one after another. By 2016, cross -border e -commerce encountered policies again. "Xiaohongshu is not an e -commerce, but a playground." After the cross -border e -commerce business of Xiaohongshu, Qu Fang told the media.

In 2019, Xiaohongshu exerted live e -commerce; in April of the following year, Xiaohongshu's live broadcast function was officially launched. Unfortunately, the results after the launch were very small. CITIC Construction Investment once wrote in a research report: Because the traffic distribution mechanism of the advertising business and the live broadcasting business business is slightly conflict, and Xiaohongshu itself is more inclined Limited. The lack of the head of the head of the goods, and the live broadcast even has no entrance on the platform. This kind of product mechanism that bury the function deeply allows users to jump in from the homepage of the follower.

From cross -border e -commerce to live e -commerce, Xiaohongshu has been repeatedly frustrated on the road of e -commerce, and has not played any outstanding results. Advertising is still the most important source of income from Xiaohongshu. According to LatePost reports earlier, in 2020, the revenue of Xiaohongshu's advertising business has achieved three times, accounting for about 80%of the total revenue, but the revenue contribution of e-commerce is only 10-20%, and the past five years have not been big in the past five years. increase. According to a report from Ai Media Consultation, in 2020, Douyin Live E -commerce GMV exceeded 500 billion yuan, Taobao exceeded 400 billion yuan, and the fast hand was 381.2 billion yuan. 50-7 billion yuan, still behind these three platforms.

Xiaohongshu Advertising Business Jieyuan Yuanfeng Securities Research Report

At the beginning of 2021, Xiaohongshu e -commerce steps were faster. Cut off Taobao's external chain function, officially implement the "store integration". The account opening of the store can be inserted into the product in the notes, and the zero -threshold opening strategy has attracted a number of start -up brand merchants. By January of this year, Liu Huantong, the head of the original e -commerce department of Xiaohongshu, resigned, and then Xiaohongshu opened an organizational adjustment of the e -commerce department. After the new community ministry, Xiaohongshu began to use "transaction is an important part of community life" as the development anchor point, which was even more anxious to invest in e -commerce business.

As for the performance of Xiaohongshu's e -commerce business this year, we are still unknown, but the key to the problem is that we all know that e -commerce is a heavy back -end and low gross profit. Why should Xiaohongshu do it? No?

The answer is imagination. With reference to the model of Zhihu and station B, the community platform will be more or less into the river of e -commerce. On the one hand, if e -commerce operates smoothly, it can provide sufficient cash flow through the account period. More importantly, the success of e -commerce transactions is profitable, which is helpful for the calculation valuation. In other words, e -commerce business supports the upper limit of the growth of Xiaohongshu and its valuation lower limit. When the scale growth and the business model can no longer meet the imagination of the capital market, the popular story of e -commerce has naturally become the best target. Generally speaking, under the pressure of business growth, it is difficult to maintain strategic determination. Xiaohongshu is no exception. Obviously, Xiaohongshu has the shadow of station B and Zhihu, which is transforming from the "grass planting platform" to "comprehensive content platform". But the problem is that although it is generally generalized, Station B still uses medium -length video creation as its core, knowing that it is still focused on the Q & A community. In contrast I am also learning to make video notes and Douyin, learn Taobao and JD.com for self -operated e -commerce, and learn public comments to do local life services. This surprised many users: What exactly do Xiaohongshu do?

02 The trading field is misplaced by the positioning of the positioning

In May this year, Xiaohongshu launched the "Community Commercial Convention", which clearly informed the merchants and bloggers, "Please complete the transaction in the platform to protect the rights and interests of both parties to buy and seller" and "please seek the content of the creator through the dandelion platform." In the eyes of many analysts, Xiaohongshu's attempt to build a closed -loop in the station is more like an island, which is more like a solitary island, which isolate consumers and brands at the same time with external competition.

"Community Commercial Convention" picture source Xiaohongshu

However, in the reality trading venue, there are e -commerce giants such as "cats and dogs", as well as short video live e -commerce such as "shaking", and the Meituan, which has also acquired the public comments. Essence E -commerce has tested the supply chain, logistics, after -sales and other capabilities, but the three camps of "cats and dogs" have occupied markets such as clothing, 3C, sinking. In the process of giants' wrists, almost no advantage, such as the "welfare agency" of Xiaohongshu's self -operated business, has frequently encountered the price of competitors.

"Our users don't come to buy things. This is the essential logic." Five years ago, Qu Fang talked in an interview with the media, but this creed seemed to have been forgotten. For users, the distance between "planting grass" and "pulling grass" is still a bit far away. Xiaohongshu began to open the Taobao external link at the beginning of last year, but this channel was closed in less than a year. The user's clicks are not ideal, and the content of the user has a commercial tendency to be commercialized. What's more, community connections can not promote the brand's fan effect, and it is not realistic to let consumers give up the price on a small red book without hesitation.

For the brand and merchants, the upstream of the Xiahongshu e -commerce business lacks the supply chain in depth, the downstream lack of payment systems and performance capabilities. , Live and bringing the goods to the anchor to draw a 20%platform service fee. Considering the cost -effectiveness alone, the attractiveness of the platform of Xiaohongshu is not strong.

Although the user attributes are different, people often compare Xiaohongshu and the public as a pair of "twins", and they are often compared, because there are many places similar to these two platforms. First of all, the form is presented in dual columns, which are mainly graphic and text. Although the former's graphic notes are more abundant, like a encyclopedia, the core is mainly beauty, play, and food notes. The main business of the review has many crossing; secondly, the UGC community between the two is consistent in the kernel, both of which are "more to 1" business model. The search page revolves around the same object. Choose reading freely, with heavy service attributes.

From the content model to the commercial ecology, both platforms are difficult to distinguish. However, since the public comments were merged and acquired by the Meituan, it determined that the distance from the public to the trading venue was closer than Xiao Hongshu. During the consumer information search stage, users can use the huge merchant word -of -mouth comments information library with a huge public comment to compare and select, and reduce their willingness to transfer after locking the willingness of consumption. In addition, the relatively complete front -end purchase payment system is also not available in Xiaohongshu, but this is exactly the closest part from the trading market.

A question worthy of thinking is: when the ideal trading field of Xiaohongshu is misplaced, the commercial positioning is becoming more and more blurred. How high is the valuation given by the first -level market?

03 Do vs to do right

"At the beginning, amateur is easy to have traffic. It is a little bit of KOC. If all brand promotion, you must go to the dandelion report. If you pick up the private part of the personal fist: current limit, violation and judgment. There is no traffic tilt on the high commission, only a formal name, the real traffic is still at the head anchor. "A KOC of a small red book gourmet type told the author.

The general user experience has risen, but KOL, KOC, and brands who support the commercialization of Xiaohongshu do not buy it. This is the paradox facing Xiaohongshu. The natural result of business input and resource allocation.

The content ecology and commercialization are difficult to balance. It is the common heart disease of various communities. From the flooding soft text to the wealthy wealth to become a community label, to the grass planting crisis caused by false filters, the small red books that have repeatedly turned over can no longer be on the content. Sitting at the governance, because this is the moat of his life. In December last year, Xiao Hongshu launched a large -scale "cleaning movement". According to the official data of Xiaohongshu, after Xiaohongshu launched a special management operation of illegal marketing, 81 brands with illegal marketing behaviors were banned, 24 offline merchants, handling 172,600 related notes and 53,600 violations. This kind of ecological ecology has achieved great results. In the past year, the number of users of Xiaohongshu has increased significantly. The latest monthly work exceeds 200 million, which also indirectly shows that the user experience of Xiaohongshu is optimizing.

Xiahongshu MAU and DAU are drawn by new eyes

The problem is that the moat on the surface is wider and wider, but it is getting farther and farther from commercialization. Xiaohongshu is born with a very special grass gene, which makes it difficult to clearly clear the relationship between grass sharing and soft text promotion on the platform. In an interview with the media in 2017, Qu Fang also talked about "not good screening", saying that "the advertisement is very subtle. How do you say how I use the machine to identify it." A large number of KOL and KOCs have misunderstood. Simple good things are sentenced to violations and current restrictions. Private chat sends a contact information for a week.

On the other hand, the hard demands of the little red book dandelion platform also seem a little overwhelmed. Dandelion is the official advertising cooperation platform of Xiaohongshu, similar to Douyin's "Star Map" and "Flower Fire" of station B. Since 2021, Xiaohongshu requires the content of all brand cooperation to trade through the platform. At the same time, Xiaohongshu as a platform with two -way commission, first charges 10%of the platform service fee to KOL and KOC settlement. Take another 10%.

Even if it is placed in the current environment, the proportion of this commission is undoubtedly high. Regardless of the low-commission rate, Pinduoduo and Kuaishou, even compared with the 5%-7%of Domestic commission B%-7%of Douyin, Xiaohongshu's commission level is also higher.

Xiaohongshu is so harsh for merchants, KOC and KOL for a reason. Last year, there was a very hot period in the marketing circle. It was said that there was a unified marketing three -board ax in the rise of the new consumer brand. The first step was 5,000 evaluations in Xiaohong Shupu. Consulting company Kantar also mentioned in its research report that Xiaohongshu is the highest -value digital media platform in the Chinese market. High stickiness.

However, to some extent, the virtual commission has also increased marketing costs. Some small brands and new brands are fundamentally unable to afford it. This makes Xiaohongshu, known for the incubation platform of new consumer brands, changed its taste. The person in charge of Nuanhe interactive business, who specializes in serving the brand, said that she was worried that she would eventually form another brand of "class solidification" in the small red book - Buying a lot of traffic, but it is difficult for the new brand to have a "paving myth" like a perfect diary.

KOL and KOC do not have to choose one between high commission and illegal receipt of private orders. Tencent's "Little Goose Fighting", "Penguin Hui Buy", Ali's "Taobao Shop", Pinduoduo's "Pinxiao Xiaoxiao" "Circle", JD.com's "Grass Show", etc., appeared in turn, and even Douyin tested the "grass" section. It is reported that the monthly work of Taobao has exceeded 250 million, and the daily life exceeds 50 million, surpassing 200 million in Xiaohongshu in one fell swoop, and bringing 1/3 of the order conversion to the platform.

As we all know, making products well is not good, healthy companies often need dynamic and sustainable. When Ma Huateng led the team to do OICQ at that time, only 9 months were released, and the registered users of OICQ had more than 1 million, but "No one in the world knows how to make money", so it finally reached the point where the price reduction was sold and borrowed money everywhere. If it wasn't for the life IDG and Yingke, QQ would almost fall before dawn.

In recent years, Xiaohongshu, which has attached more and more attention to commercialization, has still put more resources on content ecological governance and user scale growth in business practice. However, from the results, Xiaohongshu and several years There is almost no difference in the front. Do two things for doing a good job, Xiaohongshu chose the former. Under the radical strategy, the chaos of resource allocation allows Xiaohongshu to make conservative commercialization attempts. In contradictory, Xiaohongshu still cannot avoid the dilemma of internal consumption. How to work without commercial cities?

04 High valuation like the air tower

Compared with the community platforms such as Zhihu and station B, the road of Xiaohongshu's IPO seems a bit long. In the first half of last year, according to IFR reports of Reuters, Xiaohongshu considered listing in the United States, but the tightening of domestic policy supervision and other reasons in mid -July made Xiaohongshu suspend listing. In October, a number of domestic media reported that Xiaohongshu plans to carry out IPOs in Hong Kong, but in the end, it was also sinking.

Xiaohongshu, who has been trapped in the center of public opinion many times, has never responded positively. Perhaps the business logic of the capital market is most concerned about, and Xiaohongshu himself is difficult to answer for a while. Little Red Book, which was unsuccessful, successfully obtained $ 500 million in round E financing in November last year.

Xiaohongshu financing history map is drawn by new eyes

The valuation of 20 billion US dollars is about 4 times the current market value of Weibo, 20 times the market value of the market, and 2 times the market value of station B. The market value/valuation is simple and the value of the monthly act is to calculate the value of a single user. Little Red Book of 200 million monthly live, the value of a single user is about $ 100, and the B station is about $ 35. Weibo is about $ 8.6.

The value of a single user of Xiaohongshu is indeed more valuable than Weibo and knowing it, but it should not be so outrageous. What's more, compared with the similar target of Xiaohongshu, the stock price of station B has fallen from a maximum of more than 150 US dollars to more than 20 US dollars. It is known that it has fallen to 90 % of the market value. The secondary market is still trapped in the vortex of commercial monetization. The community value sought after by capital now seems to be more utopia.

Some time ago, some insiders revealed to the media that this year Xiaohongshu set the advertising business target to 24 billion yuan, more than twice the last year, which may mean that its annual revenue target in 2022 may be 30 billion yuan. The valuation of this business goal and the $ 20 billion of Xiaohongshu is also confusing, making people feel that Xiaohongshu seems to be undergoing some kind of "Great Leap Forward".

"Death screw of functional superposition" refers to entering a low -level function hoarding state. Most functions are "available" and "almost useless". Back to Xiaohongshu, its shopping entrance, live broadcasting business functions have a low contribution to GMV, as well as Xiaohongshu's voice site module in the internal test, focusing on chattering, the target is Twitter's Space, trying to dig new businesses Growth point, but only makes users feel that it is inconsistent with the core business tone, and even "how to close the voice site function of Xiaohongshu?"

This makes the capital's bet on Xiaohongshu a bit adventurous, because in fact, Xiaohongshu is still exploring the commercial closed loop of the content community, and the single revenue structure is also a karma that it will not break through in a while. If Xiaohongshu wants to enter the secondary market from the current first -level market to the secondary market that focuses on profits and benefits, then how to set up the atomic structure of its business system is still the most needed thing.

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