Xiaohongshu's user growth fell short of expectations
Xiaohongshu has walked into a dead end.
On December 28, exclusive news came from Leifeng.comKappa (pseudonym), the head of community content at Xiaohongshu, recently left his job due to the lack of community growth.
According to people familiar with the matter, Kappa has not been seen at the company for some time and has been absent from meetings for several months, and is currently in a state of resignation. The main reason for Kappa's departure is that Xiaohongshu's growth this year has not reached its expected target.
As of press time, Xiaohongshu has not made any response to this matter.
Looking at Kappa's past resume, it can be found that he once worked as a senior content operations director at NetEase Media. Since joining Xiaohongshu, he has not only expanded the platform's operation team, but also upgraded the operation strategy, and successfully launched the Xiaohongshu Community Convention, ensuring the stability and harmony of the community atmosphere.
Source: Screenshot of Xiaohongshu app.
In the organizational adjustment at the end of 2022, Anxi (pseudonym), the former head of growth at Xiaohongshu, was transferred to the commercialization department to be responsible for related businesses. Kappa, on the other hand, took over Anzai's previous responsibility for user growth, and made every effort to drive the platform's user growth goals.
Unfortunately, despite Kappa's various measures, Xiaohongshu's user growth rate is not optimistic. Data shows that by the end of 2022, Xiaohongshu's monthly active users reached 2600 million, 20 million monthly active creators, and more than 3 million daily notes.
Source: Wu Xiaobo Channel.
This figure seems satisfactory, but in comparison, as early as the end of 2021, Xiaohongshu's monthly active users reached 200 million, and its growth is stagnating.
What's even more worrying is that at the beginning of 2023, after Xiaohongshu's daily active users successfully exceeded 100 million, the platform had set a daily active user of 1 in 2023The goal of 400 million. However, after a year of hard work, this goal has still not been achieved.
Returning to the kappa's departure itself, many may feel that it doesn't seem logical to leave because of a lack of growth in the community. But in fact, this is not the first time that Xiaohongshu has reported similar news.
In April of this year, Xiaohongshu's head of product, Aang, left and Kappa took over as vice president. According to insiders, Aang's departure was related to the failure of the ** project, while Kappa's promotion was due to his success in achieving his goal of more than 100 million daily active users.
It can be inferred from this that it is not unlikely, that Kappa chose to leave his job due to the pressure of Xiaohongshu's growth. His promotions and departures reflect the challenges and pressures that Xiaohongshu faces in its pursuit of user growth.
It is worth mentioning that a few days ago, Xiaohongshu also reported that it will be listed in Hong Kong as soon as the second half of 2024, but the platform quickly denied this rumor and made it clear that there is no plan to go public.
This is not the first time that Xiaohongshu has been linked to listing rumors. As early as 2021, there were two rumors that Xiaohongshu would be listed, but they were denied by the platform with words such as "no comment" and "no clear IPO plan for the time being".
From the perspective of revenue and market capitalization, there is also a certain mismatch between Xiaohongshu's revenue and market capitalization. Data shows that Xiaohongshu's revenue in 2021 reached about 20 billion, and in 2022, this figure jumped to 30 billion. Among them, advertising revenue accounts for 80% of the total, about 24 billion.
But Xiaohongshu's valuation hasn't risen as revenue has risen. In last year's private market shares** deal, Xiaohongshu's valuation was fixed at $16 billion, a decrease of nearly $10 billion from before.
All this seems to tell us that Xiaohongshu is not as good as everyone imagined, and its future development is still full of unknowns and challenges.
The balance between content and commercialization is urgent
2023 is the 10th year of Xiaohongshu's establishment, and it is also a year when the commercialization of the platform is facing a major turning point.
During the year, Xiaohongshu took a series of measures in terms of commercialization.
In terms of organizational structure, Xiaohongshu has made drastic adjustments. On the one hand, the commercial product team will be transferred to Conan, the company's chief operating officer, head of the community department, and head of commercial technology. On the other hand, the live broadcast business has been upgraded to an independent department, and the head of the new department is also the person in charge of the Xiaohongshu community ecology to manage the live broadcast content and live broadcast e-commerce business in a unified manner.
In terms of business expansion, since March this year, Xiaohongshu has not only fully opened the "notes with goods" function, launched a unique buyer e-commerce model, but also began to lay out the field of local life services. At the same time, Xiaohongshu is also actively promoting the development of advertising business and laying out search scenarios.
As the end of the year approaches, Xiaohongshu has successively held the annual marketing summit of the education industry and the 2023 Xiaohongshu Cultural Tourism Summit, at which it once again emphasized its core concept of "everything can be planted".
Through a series of layout and strategic adjustments, Xiaohongshu's commercialization process has achieved remarkable results.
From 2022 to August 2023, the number of Xiaohongshu e-commerce buyers and managers has increased by 27 times, the number of dynamic sales merchants has increased by more than 10 times, and the number of purchasing users has also increased by 12 times.
Especially during the Double 11 promotion, the number of orders for Xiaohongshu reached 38 times, the number of store broadcasts increased by 700%. At the same time, anchors such as Dong Jie and Zhang Xiaohui have created more than 100 million GMVs in a single live broadcast, becoming the platform's super head anchors, bringing huge traffic and commercial value to the platform.
Xiaohongshu's past commercial layout Source: Crowley.
Clearly, the commercialization of Xiaohongshu is on the right track.
But as we all know, with the increasing number of business roles on the platform, the needs are becoming more diverseHow to promote the commercialization process while maintaining the quality of content has always been the biggest problem faced by content community platforms.
For example, Xiaohongshu's self-operated e-commerce business "Welfare Society", which was shut down on October 16 this year, was launched in 2014 to solve the problem of how users can buy directly after being "planted" on Xiaohongshu.
Announcement of the closure of the welfare society Source: Xiaohongshu.
As a cross-border self-operated store, the products of the welfare society cover multiple overseas shopping categories such as skin care, makeup, fashion, home furnishing, mother and child, and its main competitors are NetEase Kaola, Tmall Global and JD Worldwide.
At first, Xiaohongshu's welfare society was very popular, and its GMV exceeded 300 million yuan in the first year of its launch. However, in the subsequent operation, the welfare society has a serious problem of counterfeit goods, resulting in its inability to meet the needs of users while bringing real benefits to the majority of users.
In this context, the closure of welfare cooperatives has become an inevitable choice for Xiaohongshu.
At present, it seems that the relationship between Xiaohongshu's commercialization and community content is still difficult to integrate. In the future, if Xiaohongshu wants to make greater progress in commercialization, breaking the barrier between the content community and commercialization is the top priority.
Users are always the foundation of the content community
In the field of content communities, there is a widely accepted fact: users are the foundation and soul of a community's survival and development.
Without users, the content community is like water without a source, a tree without roots, and loses the value of its existence. This is also the fundamental reason why content community platforms like Xiaohongshu have always taken respecting, understanding, and serving users as their core principles and adhered to them for a long time.
It can be inferred that in the commercialization process of the content community platform, the key to achieving the coexistence and win-win situation of content and business lies in whether it is truly based on user needs.
Source: Think Tank for the Future.
Just like Douyin's "interest e-commerce", Kuaishou's "trust e-commerce" and Xiaohongshu's "buyer e-commerce", these e-commerce models are also tailored to the platform's own unique community atmosphere and user groups.
The launch of these innovative models can obviously promote Douyin, Kuaishou, and Xiaohongshu to gradually transform from simple content community platforms to comprehensive platforms that integrate content and consumption, so as to provide users with a richer and more personalized shopping experience.
At present, Douyin and Kuaishou are one step ahead on this transformation path, while Xiaohongshu is slightly behind. In order to make greater progress in the commercialization process, Xiaohongshu still needs to find a delicate balance between commercialization and content creation in the future, which will not compromise the user experience and effectively promote the commercialization process.
With the arrival of 2024, the competition in the e-commerce industry is becoming increasingly fierce. Content community platforms represented by Xiaohongshu can only make greater progress in commercialization if they solve the problems of attracting new users and losing old users.
Finding the right balance between content and commerce is a long-term and daunting task that all content community platforms must face.
Author |Li Xiang.