Xiaohongshu store operation, delivery and promotion

In December 2014, Xiaohongshu officially launched the e-commerce section "Welfare Club", adopted a B2C self-operated model, solved the "difficulty in purchasing" problem of overseas shopping, and officially entered the cross-border e-commerce field. Since then, it has upgraded from a community to an e-commerce, starting a closed-loop journey of grass-planting + mall.

In March and June 2015, Xiaohongshu's self-operated bonded warehouses in Zhengzhou and Shenzhen were put into operation successively. The area of ​​bonded warehouses ranks second among cross-border e-commerce companies in the country. There are more than 20 warehouses overseas, and the e-commerce process has been accelerated. But by 2016, cross-border e-commerce had undergone a dramatic change, with the introduction of a new tax policy for cross-border retail sales, which set an annual transaction limit for individuals at 20,000 yuan. Transactions exceeding the limit would be subject to the full value-added tax and consumption tax for general trade at a rate of 70%. The new tax reform will have a significant impact on the costs of food, health care, mother and baby products, which means that shopping will now be subject to an 11.9% cross-border tax instead of basically being exempt from tax in the past.

At the same time, due to problems with the supply chain, logistics and channels, coupled with the squeeze from cross-border e-commerce, Xiaohongshu's cross-border self-operation fell into an extremely embarrassing situation. At that time, the cross-border market was centered on NetEase and Tmall. Affected by this, Xiaohongshu continued to be a content community on the one hand, and opened up third-party merchants to settle in on the other hand, starting a journey of self-operation + settlement, but its e-commerce has always been lukewarm.

Figure 2: Comparison between the original and new store opening policies

The lowered threshold for opening a store has also allowed more individuals and companies to open stores on Xiaohongshu, especially some bloggers, who can attract traffic by opening a store through high-quality notes. Some bloggers who have a skill on Xiaohongshu can open a store on Xiaohongshu. For example, Liu Fufu, an individual merchant who sells mobile phone cases, can sell 100,000 yuan of mobile phone cases per month on Xiaohongshu with an average price of over 300 yuan. You can visit his homepage for details.

Xiaohongshu stores are mainly divided into two categories: personal stores and corporate stores. The entry processes for the two categories are introduced below.

(I) Personal store entry: personal store, individual business store

1. Store name:

Account name + "的店", for example, my account name is Super Mario, then my store name is "超玛的店"

2. Qualifications for entry:

The qualifications required for a personal store are: name, ID card, and mobile phone number. You can register without a business license.

The qualifications required for a self-employed store are: (1) Business license (2) Store operation authorization (required when a non-legal person applies for entry) (3) Qualifications corresponding to the store’s business category.

3. Deposit & Commission

Deposit: The basic deposit for individual stores and self-employed shops is RMB 1,000, the basic deposit for mall stores and corporate stores is RMB 20,000 in China and USD 3,500 overseas.

Commission: The platform will calculate the daily sales (excluding 5% of the refund amount) as an estimated commission. If the monthly sales are less than 10,000 yuan, the platform will not charge any commission and will return the deducted estimated commission. If the monthly sales exceed 10,000 yuan, a 5% commission will be charged.

(ii) Corporate stores include ordinary corporate stores, flagship stores, specialty stores, collection stores and store flagship stores.

1. Store name:

(1) The store name of an ordinary corporate store is the nickname on Xiaohongshu + "的店"

(2) Flagship store name: brand name (professional certification name) + flagship store. The suffix of cross-border e-commerce is automatically overseas flagship store.

(3) Store name of a specialty store: brand name (professional number certification name) + specialty store. The suffix of a cross-border e-commerce store is automatically overseas specialty store.

(4) The store name of a collection store: the name of the professional number + "Overseas Store". Entry into a collection store is by invitation only and cannot be applied for on your own, and cross-border transactions are restricted.

(5) Store-type flagship store: Brand name (professional certification name) + flagship store. For cross-border trade merchants, the suffix will automatically be overseas flagship store. ps: Collection stores and flagship stores are by invitation only.

2. Settlement process

(1) Follow the above entry process and prepare the above mentioned materials (note that the business license is in color)

(2) Log in to the settlement system https://gaia.xiaohongshu.com/login, select a general corporate store, and fill in the settlement information. The store name cannot be modified. If you need to change it, you need to go to the professional account center-nickname modification.

(3) Select a business category and submit for review. The review period is generally within 3 days.

(4) To submit the store deposit, log in to the merchant management backend - Account Funds - Merchant Account - Recharge Deposit.

Figure 4: Store traffic sources

In the community section, traffic is divided into enterprise accounts and experts. Enterprise accounts include notes and live broadcast activities.

Enterprise accounts carry the core traffic of products, that is, they create popular articles through enterprise accounts and then add business cards, so that notes can directly lead to products and can be purchased with one click. In terms of traffic, operators can not only obtain natural traffic by publishing notes, but also use bidding ads, information flow and search to deliver traffic.

For experts, on the one hand, users search for stores after reading their notes. On the other hand, the platform will also upgrade direct links to comments in the future, and experts can link stores in their comments.

Recently, Xiaohongshu has added a new partner comment that can directly lead to the store, which is also to further promote conversion within the site. Currently, Pinhe comments can jump to products, stores and search components. It seems that product components and stores are still the main focus, and the conversion effect can also be seen in the background.

Figure 6: Text link jump link

At the same time, in terms of store conversion, products can be put on the shelves through store live broadcasts, with live broadcast previews in the early stages and live broadcast gameplay to increase the time users spend in the live broadcast room. In addition, live broadcasts can also be continuously heated up through advertising, allowing users to enter the live broadcast room while they are brushing their notes to attract traffic and sell goods.

Figure 7: Store live broadcast fan conversion amplifier

The community is the source of store traffic, and hot articles are also the core source of community traffic. Specifically, it is about how to create hot articles, which involves the selection of topics, cover, title and text. We have also mentioned it in our previous articles. You can read this article to learn how to create hot articles. For specific advertising placement, please refer to this content information flow placement.

As a result, the traffic operation path of Xiaohongshu store becomes clearer. Although traffic is the source of business, we still need to do a good job of store management, compliant accounts, and store operations management.

Figure 8: Xiaohongshu store business breakdown

In addition, during the operation, we will also encounter violations, including two types of violations, namely serious violations and general violations. Serious violations include selling counterfeit goods, selling second-hand refurbished goods, substandard goods, etc. There are 21 types of serious violations. Each item will be subject to corresponding deductions and penalties based on the severity of the circumstances.

Severe violations will also have different penalties at different deduction points. For example, when the merchant’s deduction points reach 25 points, the store will be restricted for 7 days and a penalty of RMB 5,000 will be deducted. When the points are greater than 100 points, the store will be closed and a penalty of RMB 20,000 to RMB 6,000 will be deducted depending on the type of store. Therefore, everyone must abide by the platform rules and do not cut corners.

There are 10 types of general violations, such as publishing wrong information, publishing improper marketing information, etc., and penalties will be deducted based on the severity of the circumstances. When the merchant’s points accumulate to a certain level, the corresponding store penalty standards will be given.

Generally, when merchants accumulate different levels of deduction points, there will be different degrees of deductions. For example, when the score reaches 25 points, the store will be punished by limiting the flow of traffic for 7 days and deducting a penalty of RMB 2,000.

If you want to understand the store operating rules, you can go to the Merchant Management Backend - Learning Center - Rules Center, and then you can see the rules of each operating section, such as investment promotion, live broadcast management, and business management. You can check this yourself later and index it according to the operation stage and needs.

From cross-border e-commerce to integrated account and store, from self-operation to welcoming new merchants, the cost of opening a store on Xiaohongshu has gradually decreased, and it is also welcoming more merchants to settle in. However, as a grass-planting attribute, there is still a long way to go from grass-planting to conversion.