Xiaohongshu product analysis report!

Xiaohongshu is known as a popular shopping tool for young women today. How did a UGC shopping sharing community move towards the road of e-commerce success step by step?

In 2013, China surpassed Germany and the United States to become the world's largest overseas consumer country, but domestic cross-border e-commerce is still in its blue ocean era. You can find all kinds of guides and information about cross-border travel on the Internet, but you can't find any guides on overseas shopping.

Therefore, in order to address this pain point, Xiaohongshu, which focuses on UGC, came into being. Such a shopping sharing community that is deeply rooted in UGC has grown into the world's largest consumer word-of-mouth community and community e-commerce platform in less than five years, with more than 150 million users, and has become a "grass-planting" artifact in the hearts of many young girls.

From the initial overseas shopping notes to the current coverage of all categories including skin care, fashion, shopping, sports, food, travel, film and television, e-commerce brands have gradually expanded from overseas to domestic, and the entry of a large number of third-party brands has continuously expanded the market boundaries of Xiaohongshu.

1. Market Overview

According to iMedia Research data, China's cross-border e-commerce transaction volume is expected to reach 9 trillion yuan in 2018.

The consumption structure of Chinese people is shifting from survival-oriented to enjoyment-oriented and development-oriented. Changes in consumption levels and concepts have caused people's consumption patterns to shift from traditional online shopping to overseas shopping. Overall, although the Sino-US trade war has a certain impact on cross-border e-commerce, the trend of globalization and the rapid development of China's e-commerce industry still bring opportunities to cross-border e-commerce.

In the third quarter of 2018, Xiaohongshu, an independent cross-border import retail e-commerce, ranked second with a market share of 11.7%, which is still a big gap from NetEase Kaola's 69.8%.

Judging from the distribution of Chinese netizens’ agreement on various consumption concepts in 2017, users are no longer focused only on brands as they were a few years ago. Today’s users also pay attention to purchasing experience and personal aesthetic taste. In these two aspects, Xiaohongshu has gained great advantages by virtue of the large number of high-quality notes and video sharing accumulated in the community over the years.

2. Product Introduction

2.1 Product Positioning

Xiaohongshu first came into the user's field of vision as a UGC shopping note sharing community. Most of the early content was outbound travel shopping sharing and recommendations. As users' demand for overseas shopping increased, the app gradually expanded into community categories such as beauty, fashion, and food.

Users can share their product experience in the community and read high-quality content shared by others.

With the development of sharing communities, users naturally developed a demand to purchase products shared in the community, so Xiaohongshu launched a shopping function and developed from a simple UGC community into a cross-border shopping platform featuring community-based e-commerce.

The slogan of Xiaohongshu:

Good things from all over the world

Tag my life

The other side of celebrity life

Daily life of shopping for food, clothing, entertainment and fun

2.2 Product iteration and development

From its launch on December 4, 2013 to November 1, 2018, Xiaohongshu has had 126 iterations. In order to intuitively see the development trajectory of Xiaohongshu, I retrieved the ranking of Xiaohongshu app in the overall iOS application list and in the sub-sectors, as follows:

Data before May 2016 is missing ( data source : Qimai Data)

Baidu search index for PC+mobile (2013.12-2018.11):

The major events collected in cooperation with Weibo and Xiaohongshu official website:

• It was launched on iOS in December 2013;
• In March 2014, the number of users reached 5 million and completed a US$5 million Series A financing ;
• In November 2014, the company completed a 10 million RMB Series B financing led by GGV;
• In December 2014, the vertical e-commerce platform Fulishe was launched, and it began to enter the field of social e-commerce;
• In February 2015, Zhengzhou self-operated bonded warehouse was officially put into operation . Li Keqiang inspected Xiaohongshu and called it the fastest growing startup company.
• In May 2015, Zero Advertising’s sales in the second half of the year exceeded 200 million;
• In June 2015, the number of users reached 15 million and it ranked first in the Appstore ;
• In the second half of 2016, third-party platforms and merchants were introduced;
• In June 2017, celebrities such as Fan Bingbing and Lin Yun joined Xiaohongshu, and the number of users exceeded 50 million;
• The advertisements placed on variety shows in the first half of 2018 led to an explosive growth in monthly active users, with the number of users exceeding 70 million.

Based on the data and major events in the figure, I divide the development of Xiaohongshu into three stages:

(1) Market exploration period (introduction period): December 2013 to October 2014

Iteration version number: V1.0-V2.1.2

During the product introduction period, Xiaohongshu was committed to building a UGC community that can share high-quality overseas shopping experience notes and strategies. After meeting users' needs for overseas shopping strategies, it also added homemade sweet potato emoticons, optimized the camera, improved search functions and optimized page interactions to enhance user experience and further increase user stickiness.

During this phase of app iteration, Xiaohongshu mainly focused on social interaction and strategy sharing. At the same time, a large number of high-quality overseas shopping notes and guides have accumulated in the community. It has laid a good foundation for the next step of commercialization attempts and expansion of community boundaries.

(2) Business exploration period (early growth period): November 2014-June 2016

Iteration version number: V2.3.1——V4.5

During this stage, Xiaohongshu entered a period of rapid development. In a year and a half, the number of users grew to 40.8%. Due to the introduction of a large number of new users, users were no longer satisfied with simply gaining experience and strategies for overseas shopping. Some users who did not have plans or conditions to go abroad developed a desire to shop overseas. In July 2014, the country officially recognized the cross-border e-commerce business model in its policies.

Taking advantage of the policy trend and in order to meet users' demand for overseas shopping, Xiaohongshu launched the Welfare Club shopping channel in version V2.3.1, officially entering the cross-border e-commerce field.

The focus of iteration in this phase is to gradually increase the weight of the e-commerce (welfare club) section, optimize the discovery page to make user searches more convenient, and optimize the layout of notes to make the visual effect simpler. Thanks to the deep accumulation of high-quality outputs in the community in the early stage, Xiaohongshu’s business attempts at this stage have achieved great success. At the same time, Xiaohongshu Yichuang’s operating strategy has achieved great success.

In May 2015, Xiaohongshu created the unique delivery model of young and handsome guys, and achieved sales of 50 million on its anniversary day in 2015. During the anniversary period, a total of 3 million new users were added. The ranking in the app store experienced a vertical improvement, reaching fourth place in the overall list. Since then, Xiaohongshu is no longer exclusive to niche circles, but has officially entered the vision of the general public.

(3) High-speed growth period (mid-to-late growth period): July 2016 to present

Iteration version number: V4.6——V5.27.2

After exploring the business model in the previous stage, Xiaohongshu successfully found its own positioning: a social e-commerce platform. Compared with established e-commerce platforms such as Taobao and JD.com , Xiaohongshu's advantage lies in the fact that it has a large number of community users through communication communities. Xiaohongshu attracts users to "plant grass" and "pull grass" through the emotional experiences and usage experience shared by users. This is actually no different from the current Internet celebrity fan culture, which enables products to gain greater topicality and higher conversion rates through the fan effect.

At the same time, as Xiaohongshu introduced third-party merchants and brands, the ecological atmosphere of the community has also expanded to categories such as skin care, beauty, food, and clothing. The ever-expanding community circle is of great help in introducing new users, but at the same time, Xiaohongshu must also maintain a good community division, enhance user experience and thus increase user stickiness.

The focus of iteration in this stage is to maintain the existing users and attract new users. Since short video apps are very popular nowadays, community notes support the release of short videos in this stage, and have carried out multiple iterations around the optimization of short videos: such as adding background music, changing filters, adding stickers, etc.

Thanks to the success of the previous stage of operation, Xiaohongshu increased its operational efforts in this stage. In 2016, it began to introduce multiple celebrities to Xiaohongshu, creating a huge fan effect. In 2018, Xiaohongshu sponsored several variety shows, which greatly increased its exposure and pushed the number of Xiaohongshu users to 70 million.

As of July 2018, the number of Xiaohongshu users has exceeded 100 million, and the monthly active users have exceeded 30 million. At the same time, starting from July 2018, Xiaohongshu began to weaken its e-commerce attributes, no longer emphasizing the consumption closed loop from content to e-commerce, but instead emphasizing its positioning as a lifestyle sharing community.

Summary: The best e-commerce platform on social media, and the best social platform on e-commerce platform. Xiaohongshu has evolved from a UGC community focusing on sharing travel and shopping guides to a community-based cross-border e-commerce platform. In 2018, it began to weaken e-commerce and increase community traffic . In less than 5 years, Xiaohongshu has grown from 0 to a behemoth with 100 million users and 30 million monthly active users. After exploring stage after stage, Xiaohongshu is returning to its original intention. As Xiaohongshu founder Mao Wenchao said: "Xiaohongshu's next goal is to create a more real, beautiful and diverse virtual city."

2.3 Product Business Model

Xiaohongshu's main profit model consists of the following parts:

• Advertising costs generated by community traffic ;
• Revenue from products under our own independent brands;
• The profits of the mall’s self-operated overseas products;
• Platform fees from third-party merchants and brands.

Regarding Xiaohongshu's profit model, Xiaohongshu's founder Zhai Fang once said: "E-commerce is responsible for making money to support the family, and the community is responsible for being beautiful." E-commerce is undoubtedly an important profit-making method for Xiaohongshu. Compared with the tepid popularity of What's Worth Buying , which is also a community e-commerce platform, why can Xiaohongshu stand out among many platforms?

• First of all, Xiaohongshu’s most unique advantage is its powerful community traffic. In an era where traffic is king, as a community platform with over 100 million users and over 30 million monthly active users, Xiaohongshu has a strong traffic base. This means that the e-commerce sector does not need to worry about traffic generation. Users can jump directly to the products introduced in the note through the community note page, completing the consumption closed loop of viewing, buying, using and sharing, forming a virtuous cycle.
• The unique algorithm provides precise push notifications. The system can push content that users are interested in to their discovery page based on their browsing habits. If these contents happen to be what users need and are interested in, they will attract users to place orders.
• The unique community atmosphere makes it easy to create popular products. Herd mentality is human nature. Heated discussions surrounding a product can easily lead users to develop a strong interest in the product. Products that are popular in the community will attract users to "plant grass" and place orders.
• The application of big data can accurately identify user needs by analyzing hot topics discussed by users, so that the new products purchased on the platform are what users need and seek.

Current shortcomings of e-commerce:

• The weak supply chain and logistics are the biggest weaknesses of Xiaohongshu's e-commerce. Xiaohongshu’s logistics and after-sales service have been continuously complained by users. 70% of the 1-star negative reviews collected on the Xiaohongshu app are about poor logistics and after-sales service. Alibaba ’s investment in Xiaohongshu in June this year is a good opportunity to change this situation. In the future, Xiaohongshu may be able to use Alibaba's supply chain and logistics resources to improve its current situation.
• Many users only look but do not buy, which is an important reason affecting conversion rate. Many users will browse the usage notes and share on Xiaohongshu and then go to other platforms to place orders. In order to solve this problem, Xiaohongshu needs to increase its expansion of product categories and ensure the quality of products in order to improve its core competitiveness compared with other platforms.

3. User groups and user portraits

The Baidu Index data from October 1, 2018 to November 1, 2018 are as follows:

From the perspective of geographical distribution, Xiaohongshu's users are mainly distributed in Beijing, Shanghai, Guangzhou and economically developed coastal areas. These regions have more developed economies, higher consumption levels and more open consumption concepts, and are therefore the main users of Xiaohongshu.

In terms of age distribution, users aged 20 to 40 account for 70% of the total users, because users in this age group are in a stable or rising stage of their careers and have strong consumption power. Users under the age of 20 generally do not have a stable source of income and bear higher physical consumption. Due to the times, users over the age of 40 have not developed the habit of purchasing high-end consumer goods.

In terms of gender distribution, female users account for a larger proportion because female users like shopping and also like to buy high-end consumer goods and luxury goods overseas which are cheaper than in China.

From the perspective of user preferences, users who follow Xiaohongshu also follow social, live streaming and video websites.

Overall, Xiaohongshu's users are mainly female college students, white-collar workers or civil servants aged 20 to 40 who live in first- and second-tier cities, are keen on socializing, watching live broadcasts and chasing TV dramas. In addition, overseas students are the main group producing high-quality shopping notes.

User profile:

Selena, 24 years old, is from Shanghai and is currently studying for a master's degree in law in Canada. Although busy with studies, she loves shopping and knows all the international brands well. Don't miss any discount opportunities. An expert in sharing notes on Xiaohongshu, he has many fans. He mostly shops in offline malls and rarely shops in Xiaohongshu Mall.

Lily, 20 years old, is a sophomore at a university in Chengdu . She has an easy study schedule and not much living expenses. I usually spend a lot of time in the Xiaohongshu community, browsing various experts’ sharing of their shopping experiences on skin care products and clothes. I have been recommended countless times, and I will choose to buy skin care products and clothes from the cost-effective styles recommended by everyone.

Linda, 28 years old, from Hebei, is a white-collar worker working in Beijing. I love reading Eileen Chang and I love the petty bourgeois life. I pay attention to high-end brands and also like Japanese fresh-style products, focusing on cost-effectiveness. I often buy Japanese cosmetics and skincare products on Xiaohongshu, and occasionally spend a lot of money on big-brand bags. I often browse the shopping notes of the beauty and luxury communities on Xiaohongshu, and occasionally share my own shopping experiences.

Ella, 32 years old, is a career elite working in Shanghai. She is married with children. They are busy with work and need to take care of children. They are willing to buy high-end luxury goods and have high requirements for quality of life. She used to be a heavy user of the Xiaohongshu community, but due to her busy work, she has no time to pay attention to the community. She has a high degree of recognition for Xiaohongshu and therefore often buys high-end luxury goods and imported maternal and child products on Xiaohongshu. Don't care about cost performance but have high requirements on product quality. There is a high repurchase rate for frequently consumed maternal and infant products.

4. Product Function Analysis

Version: V5.31

Updated: November 23, 2018

System: ios12.0

4.1 Core Business Logic

4.2 Functional structure diagram

4.3 Core Functions of the Product

Whether from the product slogan or the product function structure diagram, it is not difficult to find that Xiaohongshu has two core functions:

1. UGC content community: including sharing and uploading of notes and provision of community content;
2. Welfare Club e-commerce: sells products that have a lot of attention in the community and the products can be promoted through community content.

Below I will disassemble Xiaohongshu from these two aspects:

4.3.1 Community Function

Xiaohongshu’s community functions can be divided into sharing (uploading) and reading, commenting, and collecting functions (discovery).

Sharing function

The sharing function is the source of diverse and high-quality resources in the community, and it mainly meets the needs of users to gain recognition and show off by sharing their own lives.

User path diagram when posting notes:

Through the prominent red plus sign at the bottom of the app, users can post their own notes by taking photos/videos/selecting album pictures. In order to meet the beauty needs of female users, the upload function has built-in beauty and filter functions.

After selecting a photo or video, users can add labels and stickers anywhere. After completing the editing of the note content, the user needs to select the topic of the note so that other users can accurately find your note.

First of all, compared with similar products, the built-in beauty function and filters are a big advantage. Now it has become a necessary skill for Chinese women to use beauty and filters to modify themselves when taking photos. The built-in beauty function of Xiaohongshu saves users from the tediousness of frequent operations between multiple software, allowing users to directly post their ideal photos. At the same time, beautiful photos can attract more people's attention, make users gain a strong sense of identity, and promote users to be willing to share their lives, forming a virtuous circle.

The label function can express the information that the user wants to convey clearly and concisely without having to add additional long descriptions.

Personalized stickers meet users' needs for individual differentiation and can also beautify pictures.

The topic selection function can facilitate user operations and help users join discussions on current hot topics to increase community activity.

Deficiencies found during use:

The proportions of uploaded images cannot be changed. Horizontal, vertical and long images all become the same proportions, causing layout errors when users post images, and many images will not be fully displayed, affecting the user experience.

Photos not fully displayed

There is no preview function after editing a note. When a user publishes a long note, due to page layout issues, they cannot see what the layout will look like after it is published. As a result, sometimes after sending a note, they find that the layout is wrong and have to delete the sent note and re-edit it. Therefore, a preview function can be added.

Add preview function

Community functions such as browsing, commenting, and collecting notes:

User path diagram when browsing notes:

Browse the usage path map

There are four main ways for users to browse notes:

1. Follow page: This page is similar to WeChat ’s Moments , and mainly displays notes posted by bloggers or businesses that the user follows. Notes posted by the user themselves will also be displayed on this page. What is different from the Moments is that Xiaohongshu has a card-style recommended follow-up module at the top of the follow-up page. The system recommends bloggers that users may be interested in based on algorithms to attract users to follow more bloggers. At the same time, users can see all netizens' comments on this note, and your comments can also be seen by everyone.
2. Discovery page: The information flow recommendations on this page are the main means for users to browse notes. At the same time, this is also an important means for Xiaohongshu to increase user stickiness. By analyzing users' browsing habits, we push high-quality content that users are interested in. When users find that the homepage contains high-quality content that they like, they will develop a sense of trust in the app. At the same time, accurate push notifications will also attract users to the mall's products, thereby increasing conversion rates.
3. Nearby page: This page displays notes about popular food, drinks, entertainment and fun in the user’s city. By browsing nearby notes, users can discover good things around them, which is an important means for Xiaohongshu to connect users' online and offline lives. Users can find many Internet-famous restaurants and popular novelty fun shops here.
4. Search function: mainly meets the needs of users to find corresponding notes and strategies when they have a clear purpose. Thanks to the accumulation of hundreds of thousands of high-quality notes on Xiaohongshu, users can easily find the content they want to know. At the same time, this is also very friendly to new users and can show the community's deep content foundation. Helps maintain user retention .

Through these four main pages, Xiaohongshu can meet the needs of users in different scenarios:

1. Users want to see what products the influencers they follow have recommended recently. So she opened the follow-up page and found that the big V had recently recommended this product.
2. The user wants to buy a certain product and hopes to read other people's experience and comments about it. So she went into the search box, searched for the item, and browsed through a lot of notes about the item.
3. Users do not have a clear purpose and just want to casually see what everyone is sharing. So she opened the discovery page and found that the pushed content was all high-quality content that she was interested in.
4. The user wants to go out and relax and have a meal, but doesn’t know where to go. So she opened the nearby page and found the most popular online celebrity restaurant in the city. She decided to invite her best friend to go to the restaurant for a big meal on the weekend.

Deficiencies found during use:

• The categories at the top of the discovery page cannot be changed in order. For example, every time I browse food-related content, I have to scroll to the very back to find the food label. It is hoped that a function that allows users to manually change classification labels can be added in the iteration.
• The feed stream of the discovery page is often mixed with video and picture notes. When the user is not connected to Wi-Fi or the current environment is not suitable for watching videos, they do not want video notes in the feed stream. To meet the needs of this group of users, a video/image/default switching function can be added in the upper right corner of the page.

4.3.2 Mall Function (Comparison with NetEase Kaola’s Competitive Product Analysis )

Xiaohongshu users’ ordering path diagram:

Ordering using the path map

(1) Home page

Compared with the all-encompassing homepage of traditional e-commerce, the homepage display of Xiaohongshu is obviously biased:

The category information below the top search box includes 4 categories and more recommended based on user behavior patterns.

From this we can see that Xiaohongshu Mall focuses on precise push based on user behavior patterns and several categories of goods that users prefer. Items in other categories are placed in the "More" section in the corner, and novice users may not even be able to find the product classification interface.

NetEase Kaola's product layout is more inclined towards the layout design of traditional e-commerce. The five tabs at the bottom are: Home Page, Categories, Grass-Seeking Community, Shopping Cart and My Kaola. Among them, the grass-planting community was placed in the middle position with the highest conversion rate, indicating Koala’s strategy of developing UGC community drainage direction.

Below the top activity carousel is NetEase Kaola’s service philosophy: commitment to 100% authentic products, direct sourcing from around the world, ten times compensation for counterfeit products, and worry-free after-sales service. At the same time, NetEase uses 12 safeguards to protect the rights and interests of users. The focus is on highlighting the platform's ability to control the supply of goods, while also emphasizing its own complete after-sales service.

In comparison, Xiaohongshu’s after-sales service has always been criticized.

Summary: Compared with the display of all categories of products on the homepage of Kaola, Xiaohongshu's recommendation options are more inclined towards categories that women like to buy, such as beauty, shoes and bags, and accessories, while the category labels of other products are hidden deeper. Combining the user population of Xiaohongshu, it is not difficult to find that this is because Xiaohongshu's users are mostly young women, so the conversion rate of products in these categories is the highest. NetEase Kaola's user base is relatively balanced, so it prefers to display all categories.

(2) Product details page

There are two ways to enter the product details page on Xiaohongshu:

1. Enter directly from the product link below the notes in the community;
2. Enter through the mall.

Pull down to enter the product introduction:

Pull down to enter the product evaluation page:

Enter the product details page on NetEase Kaola:

Pull down to enter the information page:

NetEase Kaola's evaluation page:

Summary: Xiaohongshu’s ability to directly access products through notes is a very useful innovation. Users who access products through notes will have a good impression of the products themselves, which is conducive to improving the conversion rate of orders.

The purchase comments that flash from time to time on the details page tell customers from all over the country that the product has been purchased, which enhances users' sense of trust and also increases the conversion rate of users' orders.

The comments only show the advantages of high-quality usage notes in the community: high-quality shopping notes provide in-depth introductions to all aspects of the product, and users have a high degree of trust in the recommendations of sharing experts. The disadvantage is that the products in the shopping notes are not necessarily purchased on Xiaohongshu, and users may have questions about the products sold on Xiaohongshu.

NetEase repeatedly emphasizes its guarantee of product authenticity on its product pages and displays every link of the logistics process to users, reflecting NetEase Kaola's confidence in its own supply chain and logistics.

The product review page not only provides user reviews in a conventional way, but also adds a question-ask-everyone function, which can help users better understand the product and answer their questions.

What Xiaohongshu can learn from its competitor NetEase Kaola:

1. Enhance its own accumulation of supply chain and logistics;
2. You can add a "product-details-reviews" navigation at the top of the detail page to facilitate users to go directly to each page with one click;
3. Add real reviews from users who have purchased the product to improve user recognition of the product.

5. Operational Analysis

Combining the search index of Xiaohongshu on PC and mobile terminals, I selected several peaks to analyze Xiaohongshu’s operational activities:

June 2015 Fresh Meat Delivery

On June 6, 2015, Xiaohongshu created a successful marketing campaign (if you place an order between June 1 and 5, Xiaohongshu will use young handsome men to deliver goods to your door). On the first day of Xiaohongshu’s anniversary celebration, photos of muscular men delivering goods to girls’ homes spread all over the girls’ circle of friends. With the help of the media, Xiaohongshu’s exposure rate increased greatly, allowing more people to know about Xiaohongshu.

This marketing campaign was undoubtedly successful, bringing huge dissemination and influence in the industry. The sudden influx of a large number of users put a huge burden on the server, and there was even a situation where the server crashed and orders could not be placed.

Red Friday November 2015

In November 2015, Xiaohongshu ingeniously launched the “Red Friday” event to make Black Friday more popular, with the theme of “I don’t want the whole world, I just want the good things in the world”.

In addition to the highest discounts that only happen once a year, all overseas direct mail products are also free shipping. During this event, Xiaohongshu also launched offline activities such as one-yuan luxury bags and Xiaohongshu buses, as well as a 30-day no-reason return and exchange policy that allows users to shop with peace of mind.

During this event, Xiaohongshu’s search index increased by 7 times, and Xiaohongshu’s unique charm began to infect more users.

In April 2017, Lin Yun became the first celebrity to join Xiaohongshu

Since April 2017, when Lin Yun took the lead in transforming herself into a beauty and fashion blogger on Xiaohongshu, various celebrities have begun to join Xiaohongshu.

In November 2017, Fan Bingbing's high-profile entry into Xiaohongshu officially marked the beginning of a period of celebrity traffic explosion.

The sales of all the products she recommended increased dramatically and were sold out, and the number of new users of Xiaohongshu also reached a small peak.

As of November 2018, the number of celebrities on Xiaohongshu exceeded 150. With the increasing influx of celebrities, the number of users of Xiaohongshu is also growing steadily.

Sponsorship of variety shows in January 2018 brought high exposure

Having tasted the sweetness of user growth brought by the addition of celebrities, Xiaohongshu sponsored two popular variety shows, "Idol Producer" and "Produce 101" in January and April 2018 respectively, which brought Xiaohongshu extremely high exposure.

Thanks to the fact that the audiences of these two variety shows are the same as Xiaohongshu's user group, Xiaohongshu's user base began to snowball. By the middle of the broadcast of Produce 101, Xiaohongshu's user base had reached 100 million, with more than 30 million monthly active users, which is three times the figure of a year ago.

Looking at Xiaohongshu's several successful operations, it is not difficult to find that Xiaohongshu has successfully delivered advertisements to the right users at the right time by making precise investments in celebrities, KOLs , and popular online variety shows, thereby developing a large number of potential users into its new users. At the same time, through the high-quality content of its own UGC community, it captures the hearts of users and ensures a high retention rate. This is the core strategy that enabled Xiaohongshu to grow to over 100 million users in 5 years.

VI. Conclusion

Xiaohongshu has grown from a UGC community focusing on overseas shopping sharing to a community-based e-commerce with over 100 million users, and has accumulated a large number of high-quality users with high stickiness. However, it seems that Xiaohongshu's shopping order conversion rate is not very high at present. This is related to the fact that Xiaohongshu has always been committed to building a high-quality life sharing community and is unwilling to impose too many guiding measures on products to destroy the user experience.

The weak supply chain and logistics chain is also an important reason for this situation.

Therefore, Xiaohongshu’s next goal should be to strengthen the construction of supply chain and logistics services. At the same time, it needs to explore ways to increase the user purchase order conversion rate without affecting the community user experience too much.

Source: Ink Dye