Analysis of Xiaohongshu and Mogujie's competitive products

Xiaohongshu , Mogujie and What’s Worth Buying are representatives of content-guided e-commerce. They realize traffic monetization through videos, pictures, texts, anchors, etc. The author of this article makes a comparative analysis of these three. Let’s take a look.

1. Background

The country is talking about consumption upgrading, and consumers' requirements for consumer goods are changing from "from nothing to something" to "from something to better", and they are more concerned about the product's brand awareness, reputation, product quality, ease of use and other aspects.

On e-commerce platforms such as Taobao, Tmall, JD.com, and Vipshop, consumers can browse similar products of different brands and models, providing a wide range of choices. Of course, the purpose of purchase is different, and consumers have different expectations and investment in the product; for example, the standards for buying a pair of sneakers are also different.

Online shopping is a huge field, and search results pages often display a large number of products. Faced with tens of thousands of products, all consumers can do is filter by sales volume, price, shipping location, brand, private label and other information; products with high sales volume are not necessarily what customers need, and unfamiliar brands are not necessarily of poor quality.

The higher the value of the product, the more cautious consumers are in choosing it. Even though “it’s better to compare prices before shopping”, users start to feel confused and at a loss when making shopping decisions.

When purchasing certain specific products (maternal and infant products), consumers even need to understand the professional knowledge in this field and consult experts in this field to make shopping decisions. For consumers, acquiring knowledge is much more difficult than acquiring information. For example, when buying diapers, strollers, baby clothes, bottles and other products, parents are required to have certain basic knowledge.

This knowledge is very limited on the product details page (product main picture, short video, product introduction information), and the content in the consumer review area is uneven. Most of the negative reviews may be deleted or hidden by the seller, and few people have the patience to read the densely packed, uniform text.

The points that consumers care about may not be covered by the product details page or the comment section, which means that it is not feasible for consumers to make shopping decisions.

In addition, the evaluation page of a certain Taobao has been revamped, with an inconspicuous "medium/bad review" entrance and a label similar to "bad experience"; its income mainly comes from the entry of merchants, and the platform will not close a store because of a high number of bad reviews. Otherwise, the number of stores will decrease and the platform's income will also decrease accordingly.

Therefore, the task of acquiring knowledge requires consumers to find as many information channels as possible (friends' recommendations, shopping mall counters, supermarket tellers, Zhihu, Baidu, etc.) to complete it. At the same time, in the process of acquiring knowledge, fragmented information requires consumers to screen and spend time to integrate.

2. User Pain Points/Demands

1. In the product selection and product comparison scenario, users encounter the problem of choosing products

Ample choices help consumers compare prices and buy satisfactory products. However, when there are too many purchasing choices, such as facing more than a dozen pieces of clothing, you need to consider factors such as clothing matching, price, fabric, season, etc., and constantly compare the advantages and disadvantages of each product horizontally. This process is very time-consuming and energy-consuming.

Shah and Wolford found in their 2007 study that when shopping options increase, consumers' probability of purchasing increases; after passing the peak (maximum number of choices), consumers' actual purchases decrease. It can be said that when users have too many choices, the decision-making process becomes complicated, which will ultimately reduce customers' desire to buy.

Therefore, sellers, platforms, and systems can help consumers simplify the decision-making process and "limit" the number of choices for consumers. Ultimately, this will not only promote consumers to make shopping decisions and reduce their opportunity costs, but also increase sellers' store sales.

2. In some product areas, users lack professional knowledge in this area

Most consumers may be non-professionals in a certain field. As a non-professional, it is easy to step on minefields when purchasing certain products (for example, you don’t play games and mainly use it for daily office work, but buy a gaming laptop - "not knowing your own usage needs").

For consumers, it is important to master the basic knowledge (product efficacy and basic parameters) to avoid common pitfalls and ultimately buy products that you can rest assured about.

3. When obtaining information, users encounter problems with fragmented information and low content quality.

The explosive growth of content on the Internet has made it easier for users to find content on search engines. Of course, content can be divided into professional and community-based. If users want to have a general understanding, such as common sense of life, they can obtain it through search engines such as Baidu.

Most of the detailed and professional answers are gathered on some professional platforms. Therefore, allowing users to access these professional contents or use these platforms for "retrieval-based" learning can solve problems in users' related fields and improve the efficiency of obtaining high-quality information.

4. When browsing the consumer review area, users encounter distorted reviews

When shopping online, consumers may encounter situations where the actual product is different from the product on the picture details page. To avoid this psychological gap, consumers browse the comment section to understand the actual condition of the product and the seller's after-sales attitude. The reference value of the comment area depends on:

• The degree of neutral/bad reviews (mild neutral or bad reviews or complaints have different impacts than extremely bad reviews);
• Frequency issues (the impact of browsing the comment section for several screens and seeing only 2-3 negative reviews versus more than a dozen negative reviews is different);
• Content form (X-star rating, numerical score, text, image, video);
• Usefulness of the content (reasons for bad reviews - product or service shortcomings);
• Factors such as the identity of the commentator (user level) and so on.

The influence of review sections on consumers’ shopping decisions depends on many factors, but authentic reviews, especially those that provide substantive reasons for negative reviews, are a quality signal for consumers to refer to and increase consumers’ perceived risk.

3. Competitive Product Analysis

The social e-commerce track has already produced the group buying model represented by Pinduoduo and the distribution model represented by Yunji.

Taking Pinduoduo as an example, the group buying model uses WeChat friend attributes, group buying, bargain hunting, etc. to purchase/recommend products and attract new customers, helping PDD simplify the user retention and new customer acquisition process and form low-cost fission-style dissemination.

Social distribution is represented by Yunji, whose profit model is the price difference of goods + membership fee. Users register as members on the Yunji platform, open personal stores, enjoy discounts on self-purchases, and can receive varying commissions by recommending Yunji products to friends and family.

What’s Worth Buying, Xiaohongshu and Mogujie, as representatives of content-guided e-commerce, realize the dual drive of content + e-commerce through IP columns, KOLs, anchors, videos, pictures and texts, and other content forms to better realize traffic monetization.

E-commerce shopping guide companies can be divided into price shopping guide companies and content shopping guide companies according to their operating methods.

Among them, the top price shopping guide companies are Fanli.com, Yitao (under Alibaba Group), and Taofenba; the top content shopping guide companies are WhyIt’s Worth Buying, Shihuo, Duitang, etc. Like the price guide APP "Yitao", Alibaba's online shopping platform rebate collection points can be used for Taobao and Tmall cash deductions (rebates after purchase).

In view of the above user pain points, price shopping guide competitors will not be analyzed here. The following focuses on analyzing What’s Worth Buying, Xiaohongshu, and Mogujie, and deeply understands how these three apps solve user pain points/needs.

1. What's worth buying (SMZDM)

What’s Worth Buying (SMZDM) originated from HiPAD (electrician forum). Most of the forum users are electronics enthusiasts and IT geeks who are happy to buy digital products and share related experiences.

What’s Worth Buying was founded in 2010. Relying on seed users from HIPAD and recommending products from B2C e-commerce platforms, it has left the impression of “an information decision-making platform integrating media, shopping guides, community, and tools” on new and old users.

SMZDM mainly comes from user community content, and UGC content accounts for about 70-80% of its total content.

The above picture shows the general business framework of why it is worth buying. According to its prospectus, content contributions mainly come from user contributions (83.96%), editor contributions (1.73%), merchant contributions (6.70%) and machine contributions (7.61%); the size of its editorial team is 100-200 people. Even with a professional content production team, SMZDM still gives the bulk of the money to UGC.

Editor-in-Chief Pan Xu believes that the team’s strength is limited and there will always be knowledge gaps; but users are different, “You will never imagine how many shining points users have.”

With the increase in online shopping options, consumers find it difficult to choose suitable products from a large amount of e-commerce information. A lot of time and energy is spent on selecting and comparing products, and real-time promotional information is difficult to effectively reach target users. As an intermediary platform between merchants and consumers, Zhiyoumai has a heavy responsibility.

2. Xiaohongshu

Xiaohongshu’s slogan “Mark my life” comprehensively covers 18 fields including fashion, skin care and cosmetics, food, pets, etc. Its "community" model builds user reputation through the UGC platform, and on this basis invites experts and celebrities to join to create a community atmosphere.

There are three sources of content for Xiaohongshu: UGC, PGC, and PUGC represented by celebrities and influencers. In terms of professional content production, Xiaohongshu has its own editorial team and has opened multiple vertical official accounts, such as Captain Potato, Beauty Potato, Life Potato, Sports Potato, etc.

In terms of content produced by professional users, PUGC users are mainly divided into three categories: MCN institutions/teams (such as late-night porn), celebrities who have settled on the Xiaohongshu platform (such as Ouyang Nana) and experts cultivated by Xiaohongshu (or heavy users of Xiaohongshu who have published a large amount of high-quality content).

Through the community module, a powerful traffic entrance is formed, which is directed to its own "mall" platform to form a closed business loop. The following figure is the product function structure diagram of Xiaohongshu:

3. Mogujie

The success of Mogujie, a content shopping guide APP, in the field of "live streaming + e-commerce" is due to its early incubation and training of anchors. Mogujie has trained and incubated the first batch of professional anchors for the entire live streaming industry, and the first single show to exceed one million came from Mogujie.

Secondly, Mogujie has a very clear positioning - a vertical e-commerce company that sells goods that young women shop for frequently (clothing, bags, jewelry, snacks, etc.). This means that the core users’ consumption commonalities will be more obvious or their consumption preferences/tastes will show a certain degree of concentration. The development of Mogujie can be roughly divided into three stages:

1. 2011-2013, Product Shopping Guide: Women’s Shopping Information, Shopping Guide Website;
2. 2014-2017, e-commerce: layout of self-operated e-commerce, positioning as a vertical e-commerce for women's high-frequency shopping categories (clothing, jewelry, snacks, etc.);
3. 2018-present: content + e-commerce (dual drive).

The following figure is the C-end/B-end user relationship diagram of Mogujie:

Live streaming e-commerce is just like shopping in an offline mall, with the anchor acting as an offline shopping guide. At the same time, the live streaming room also has limited-time sales, joining in the fun, and other activities that mirror those of offline malls.

When users visit the live broadcast room, the first thing they do is watch the shopping and kill time. As more and more users enter the room, more and more comments such as "quietly add to shopping cart", "XXX is ready to buy", "When will it be shipped" appear in the comment section, and users may follow the trend and make purchases under the trend of the herd effect.

Of course, there are also users who have a learning attitude and follow the anchors of Mogujie to learn how to match clothes, how to put on makeup, understand certain aspects of the products that other consumers pay attention to, and understand fashion trends.

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