Although Xiaohongshu has been low-key for a long time, this year, she was the first to show her high-profile image through the Spring Festival Gala.
Recently, Xiaohongshu's official *** announcement said: Xiaohongshu has officially transformed into a note and live broadcast sharing platform for the "2024 Spring Festival Gala" of **Radio and Television Station. This is the first e-commerce brand in China to launch the "Spring Festival Gala" column on ***. On this year's Chinese New Year's Eve, the Spring Festival Gala and Xiaohongshu jointly planned a companion live broadcast called "Everyone's Spring Festival Gala".
At the end of 2023, Xiaohongshu once again released the latest news about her possible IPO on the Hong Kong Stock Exchange in 2024. Xiaohongshu's denial sparked a wave of volatility in the market, and investors' confidence in its listing rumors was greatly impacted. However, before the news could fully spread, Xiaohongshu had already quickly denied the information that morning and said that there were no plans to go public.
A closer look at Xiaohongshu's various strategies for the Spring Festival Gala cooperation, combined with the previously launched "New Year's Festival" activity, shows that Xiaohongshu no longer hides its desire for business.
Prior to this, the Spring Festival Gala has expanded from WeChat, Alipay to Douyin, Kuaishou, and then to **, as a huge traffic channel, it has become a popular choice for major top Internet companies for a while." The addition of Xiaohongshu has made the commercial territory of the Spring Festival Gala broader. Now, Xiaohongshu does not hesitate to mark the Spring Festival Gala, and tries to use the influence of the Spring Festival Gala to further develop in the direction of business.
However, for those Xiaohongshu whose business processes have not yet fully matured, the value of the Spring Festival Gala may not be able to produce significant results.
In the bet on the Spring Festival Gala, we are pursuing more than just traffic.
Xiaohongshu became the first online company to officially announce the Spring Festival Gala very early.
Unlike Internet companies that have participated in the Spring Festival Gala before, Xiaohongshu did not choose to become an exclusive partner, nor did it plan to carry out "red envelope" activities at the Spring Festival Gala, but relied more on the "grass planting" link on the platform.
According to Xiaohongshu's official statement, she has officially become the notes and live broadcast sharing center of **Radio and Television Station's "2024 Spring Festival Gala", and claims to "lead users to be immersive and participate in the behind-the-scenes work of the Spring Festival Gala". Users responded one after another, and the Spring Festival Gala notes were hotly discussed on the Xiaohongshu platform, as if a unique cultural feast had been opened. Immediately afterwards, the community topic Everyone's Spring Festival Gala was made public, and at the same time, the companionship and interactive live broadcast activities of "Everyone's Spring Festival Gala" were also launched, as well as a pre-warm-up activity called "I will be the atmosphere group of the Spring Festival Gala".
Zinc scale noticed that according to the content of the Xiaohongshu reservation interface of the Spring Festival Gala live broadcast, Xiaohongshu specially invited Xie Na, Yang Di and Charmaine Sheh as special hosts. The rehearsal for the Spring Festival Gala is in full swing, and the official account of Xiaohongshu is frequently updated with wonderful tidbits. During this period, Xiaohongshu used multiple official accounts such as official potatoes, everyone's Spring Festival Gala and Spring Festival Gala contacts to release a large number of notes about the Spring Festival Gala rehearsal and information such as Reuters, the guests of the live broadcast.
In addition, a new area called "What are the private good things in the program group", click on the same**, users can directly enter the purchase interface of "New Year's gift", there are currently ten kinds of goods on the market, mainly clothing. Special Spring Festival events also include the "New Year's Goods Sharing Session", where influencers share special Chinese New Year goods from various places, such as spicy hot pot base from Sichuan, Pu'er tea from Yunnan and sausages from Guangdong. Under the theme of "Everyone's Spring Festival" in Xiaohongshu, in addition to the main venue, there are also sub-venues such as calling stars, receiving milk tea, raising pets, and setting off fireworks. Among them, the partners of "Ling Milk Tea" cover well-known brands such as Tea Baidao, TIMS, 7 Fentian and Shanghai Auntie.
*Taken from Xiaohongshu's work "Everyone's Spring Festival Gala".
Interestingly, not only the official account has undergone a high-density update, such as the accounts of many brands such as Xizhilang, Honor Mobile, Clarins, etc., but even the activity of "5-year college entrance examination and 3-year simulation" has also made unified promotional notes for Xiaohongshu. Xiaohongshu's traffic support is so strong that merchants have sighed and surprised. According to the revelations of "Pacific Technology", Xiaohongshu planned 5 billion traffic** during the Spring Festival to support merchants. Users can enjoy double discounts during this time, not only can they enjoy full discounts in different stores, but they can also directly get the ** reduction of single products. During the ** event from January 21 to February 16, a two-way ** strategy of cross-store full reduction and direct price reduction of single products was launched.
On the night of January 28, Xiaohongshu's hot search quickly launched its warm-up campaign to bring goods, and many bloggers took the initiative to find their star styles during rehearsals, and many users have already looked for relevant links in the comments section.
It is obvious that Xiaohongshu's attention to the Spring Festival Gala is not only to attract traffic, but also to increase sales.
In fact, there are huge business opportunities hidden behind the "same style of the Spring Festival Gala". Looking back on the Spring Festival Gala in 2023, Qin Lan's same green cardigan, Zhao Liying's same red dress, Yang Zi's same coat and the same women's shoes are respectively ranked 1-4 on the ** hot search list. Among them, the green coat is one of the most popular styles. In 2022, Zhang Xiaofei's blue-green coat sparked a craze on Weibo, and the topic related to Zhang Xiaofei's coat sold out in 10 minutes also quickly appeared on the hot search list, attracting 500 million readers.
However, there is no clear conclusion about whether Xiaohongshu can make a lot of money through the Spring Festival Gala.
Judging by the number of users on Weibo and Xiaohongshu and their attention to the Spring Festival Gala, Weibo's official account for the Spring Festival Gala has attracted more than 13 million followers over the years. However, Xiaohongshu's official account Spring Festival Gala was only officially launched on January 19, and now the number of fans is only 140,000, and the number of reservations for "Everyone's Spring Festival Gala" is only more than 500,000.
In addition, among the current products with the theme of "New Year's gift", the red velvet small square bag recommended by Dong Jie's live broadcast has the highest sales. As of Feb. 4, it has sold more than 1,200 units, but the sales figures for other items are less attractive, with more than a hundred units or even a few figures.
Although the live broadcast of the buyer has attracted a lot of attention, users prefer "Dong Jie".
After a year of hard work in the e-commerce industry, Xiaohongshu finally chose the Spring Festival Gala as a bet in early 2024, and the driving factors behind it can be easily speculated.
In fact, the current Xiaohongshu is not only suffering from obstacles to the growth of the number of users, but also struggling with the dilemma of commercialization. From the perspective of business logic, Xiaohongshu has great potential in terms of content and traffic, but the profit model of this industry is not mature enough. According to data released by Lei Feng on December 28, 2023, the content leader of the Xiaohongshu community chose to leave due to the slow development of the community, and according to internal sources, Xiaohongshu's user growth this year did not reach the pre-set target. In terms of revenue, Xiaohongshu currently mainly relies on advertising revenue to maintain its operations. After surpassing 100 million daily active users at the beginning of the year, the company set a daily active target of 1400 million, but this goal has not yet been achieved.
Looking at the business development trajectory of Xiaohongshu in 2023, it seems to have become clearer than in the past. On the one hand, it announced the closure of its own e-commerce projects and brands "Welfare Society" and "Little Oasis" in the second half of the year, while on the other hand, it also continued to strengthen its support for buyer e-commerce.
Starting from Zhang Xiaohui, through Dong Jie, Yi Nengjing, and then to Wu Xin, this group of "sister" anchors vigorously promoted by Xiaohongshu quickly emerged on the Xiaohongshu platform and became hot buyers.
According to statistics, Zhang Xiaohui conducted a 6-hour live broadcast for the first time, attracting nearly one million viewers and sales of more than 50 million. More than 5 months later, her second live broadcast reached a record high again, and the sales of the live broadcast room directly exceeded 100 million yuan; Dong Jie's sales in a live broadcast exceeded the 10 million mark; Yang Mi announced that he would start the first live broadcast next month, and fans were enthusiastic and their expectations continued to rise. Yi Nengjing's first live broadcast GMV sales have exceeded 50 million; In the fierce live broadcast trend, Wu Xin is unique, her single-hour heat value exceeded 100 million, and she successfully topped the list of buyers. Wu Xin's heat value exceeded 100 million within an hour, and he was among the top buyers for a while.
For Xiaohongshu, the buyer's live broadcast solves the problem of "making wedding dresses for others". Xiaohongshu covers many SKUs through the content chain of "planting grass and pulling weeds", but it usually only attracts traffic, but sales flow to platforms such as **, Douyin, and Pinduoduo. The rise of buyer live streaming has solved the problem of sales channels for Xiaohongshu. Xiaohongshu has tried to introduce external shopping links and establish its own e-commerce platform, but the results have not been satisfactory, especially since the infrastructure construction of self-operated e-commerce always seems to be difficult to keep up with the speed of "planting" of users. The buyer's live broadcast has become a major turning point for Xiaohongshu, and users can complete the purchase directly during the live broadcast without leaving the platform. The way of live streaming of buyers allows the decision-making process of "planting grass and pulling weeds" to be carried out directly on Xiaohongshu, so as to achieve the effect of "traffic equals sales" to a certain extent."
However, one must face the fact that there is still a big gap in sales for Xiaohongshu's buyers compared to other platforms. From the current point of view, the domestic live broadcast has shown a blowout growth trend. For example, in the Double 11 Shopping Festival in 2023, the transaction volume of the **live broadcast room exceeded 5.8 billion yuan, and in addition to the live broadcast of talents, the turnover of the live broadcast of the store also reached 3.8 billion.
A notable factor is that while Xiaohongshu's buyer qualification threshold is relatively low – as long as you meet real-name verification, reach the age of 18, and have more than or equal to 1,000 followers to start a buyer partnership, Xiaohongshu's waist buyers don't seem to be that popular, except for the existing super buyers.
This does not represent a positive sign. This rift can lead to user churn, and Xiaohongshu needs to consolidate its partnerships with superbuyers. If users only love "Dong Jie", then the barriers created by the platform are too fragile. Perhaps, Xiaohongshu needs more buyers like Zhang Xiaohui, whose diversity and personalization will inject new vitality into the platform. After all, the connection between this group of superbuyers and Xiaohongshu is not very solid. For example, Zhang Xiaohui not only goes live on Xiaohongshu, but she also develops a private shopping app called "Rose is a Rose" and offers unique offers to members in this app.
If the "moat" design is too monotonous, then it will inevitably face a higher level of risk. This kind of adventure may be exactly what Xiaohongshu needs. This may also be the reason why Xiaohongshu decided to grasp the "thigh" of the Spring Festival Gala this time, a new traffic entrance, which may accelerate the process of its commercialization and further cultivate users' consumption habits.
In the end, the ecological environment of the community and the process of commercialization are in dilemma.
From beginning to end, Xiaohongshu's commercialization process seems to have been a little hesitant.
In this regard, the general view of the outside world is that Xiaohongshu has always adhered to the principle of "both wants and wants", which is not only to ensure the ecological balance of the platform community, but also to think about how to carry out the transformation of commercialization. Xiaohongshu has been trying to balance the relationship between commercialization and user experience, which has attracted the attention of industry insiders. In the "New Retail Business Review", an industry expert pointed out: "Although Xiaohongshu has recognized the importance of commercialization, she has always been cautious about monetizing her funds out of concern that excessive commercialization may damage the user experience and destroy community culture." ”
Still, it may not be possible to have the best of both worlds for a community's ecology and its commercialization.
In fact, although Buyer Live has performed quite well in the past year, it also reflects Xiaohongshu's concern in part that as the number of live streams continues to increase, this will undoubtedly cause damage to the ecological environment of the community and may trigger negative reactions from users.
Zinc Scale notes that similar negative reviews have already appeared on Xiaohongshu.
In a note titled "Don't push me live, you just don't like it", one user mentioned: "Did Xiaohongshu start live streaming recently?" Actually, there aren't many bloggers I often like**, and most of them are live streams while shopping. If it goes on like this, I want to delete it." This record surprised many people - so many Internet celebrity anchors have appeared on the Xiaohongshu live broadcast platform just over a year after its launch, and even the title of "anchor" comes from the "fans" on the live broadcast platform. In this note, there are also things like "Don't make the content look like Douyin", "I really don't understand why Xiaohongshu chose to learn from Douyin?" I'm more inclined to the vibe of Xiaohongshu" as well as the comment "There's a live stream on every page, it's really troublesome".
Others shared their notes, noting that "the taste of Xiaohongshu has changed to the point where people have lost interest in it." They also stressed that "the current Xiaohongshu is all advertising, all goods, all selling goods......I really hope that Xiaohongshu doesn't go too far."
The notes that Xiaohong made in the book.
However, Xiaohongshu's style may "deteriorate", or it is inevitable.
Admittedly, the brutal truth forced Xiaohongshu to make changes.
According to public statistics, Xiaohongshu's revenue in 2022 will be about 30 billion yuan, of which advertising revenue accounts for 80%, while the remaining 20% is from e-commerce; In the 2023 statistics, the proportion of Xiaohongshu's advertising revenue has decreased slightly, but it is still as high as seven to eighty percent.
At the beginning of 2023, Xiaohongshu set an annual revenue target of 24 billion yuan, which means that it is difficult to achieve it by relying on advertising revenue alone. In order to achieve its new annual goals, Xiaohongshu had to adopt a more aggressive marketing strategy. However, based on the real situation in the first half of the year, the annual revenue forecast has been revised from 24 billion yuan to between 18 billion and 20 billion yuan.
According to a Bloomberg report, Xiaohongshu plans to achieve a net profit of $500 million in 2023, a figure that far exceeds the company's estimate of less than $50 million at the beginning of the year. This has led many to believe that Xiaohongshu will become one of the hottest Internet companies in the next few years. However, with the gradual increase in revenue, Xiaohongshu's valuation does not show a linear upward trend. In the previous year's private equity deals, Xiaohongshu's valuation stabilized at $16 billion, down nearly $10 billion from before.
Correspondingly, Tianyancha's data shows that up to now, Xiaohongshu has completed six rounds of financing activities, with a total financing amount of more than 900 million US dollars.
Keep in mind that by the end of 2023, Xiaohongshu has once again refuted the rumors of the listing plan. Despite this, in the ranking of Shanghai unicorns, Xiaohongshu has always ranked first with a valuation of 100 billion yuan. After Xiaohongshu is listed, the capital market will pay more attention and expectations to it, rather than just for financing. Although it has not been listed for a long time, how long are the capitalists still willing to wait?
February** Dynamic Incentive Program