Xiaohongshu: Value Dismantling under the Wind
In Xiaohongshu, there is a hidden symbol of the development of the entire industry in this cycle. The Xiaohongshu platform manages key cycles, and the volume of sound was once passive. As a result, many platforms continue to help it “pull up” and sprint toward its shape. For example, Weibo recently launched the social app “Oasis”, the interface looks like Instagram, the content is high like the Xiaohongshu; the vertical community mother helped launch the motherhood alliance, claiming to create “Xiaohongshu in the maternal and child field”; Called the "Travel Red Little Book", financing 50 million. Another action seems to have a secret relationship with the Xiaohongshu: not long ago, the fast-handed participants know. A friend said that at least you can make a "Xiaohongshu"
The Xiaohongshu of the platform governance cycle has become a standard that many people must say. What does this reflect? A phenomenon: the Xiaohongshu that is snuggled. Quark believes that this phenomenon reflects that in the Xiaohongshu, there must be a hidden symbol of the development of the entire industry in this cycle. Xiaohongshu did not lose industry value due to governance issues. It can even be said that the trend of governance just confirms its core competitiveness. At this moment, analyzing the Xiaohongshu around this phenomenon should allow us to see some cutting-edge trends, or capture a hint of industry transformation, innovation and growth. It is still starting from the phenomenon that the above-mentioned multiple companies “pull up” the Xiaohongshu. As you can see, the “Oasis” carries multi-category, vertical content, and it really seems to be a new “grass community” in the benchmark Xiaohongshu. In addition, the content e-commerce service portal is also strengthened. Mother helps the surface form, content form, richness and readability, the very class Xiaohongshu; travel shoots directly say that they are "grass economy."
Obviously, if they are summarized by keywords, the Xiaohongshu topics they rely on are community-based, grass-growing, multi-category media formats and content. In Quark's view, this basically covers the characteristics of the entire surface of the Xiaohongshu. These characteristics are indeed the core competitiveness factors of the Xiaohongshu currently considered by the outside world. Don't say that the above platforms are not contradictory. If you want people to know that they are still in the Internet industry, if you want to mention these keywords in a proper way, people should think that you are still young. However, Quark believes that if you only look at such surface features, although it is a core element, it is still difficult to understand why this phenomenon will fall on the head of Xiaohongshu and the true competitiveness of this company. Because, whether it is community, grass or multi-category community content services, looking at each element separately, they are not the first of the Xiaohongshu. In addition, I think, stopping at the surface level, it is difficult to understand why it will encounter this round of supervision and governance topics.
Xiaohongshu Competitive Analysis
We believe that there must be a more systematic, platform-based ability hidden in the Xiaohongshu. It does not stop at the above surface morphology. What is it? It may be necessary to briefly review the past and present of the Xiaohongshu. It was born in 2013, started in the "Xiaohongshu outbound shopping guide" (launched in September of that year), and then quickly showed the community form, "Xiaohongshu shopping notes" was launched in December of that year. Later, the two gradually merged, and in December 2014, they created a classic with the help of “Welfare Society”: 95% of the goods were swept away in 2 hours. In the following years, it was called the concept of “cross-border e-commerce” and was once regarded as a peer of the platform such as the ocean terminal and the honey bud. From 2013 to 2016, the concept of “cross-border e-commerce” is indeed crazy. Some listed companies that have no business at all are only because of overseas business, and there are cases of setting up cross-border e-commerce business. Xiaohongshu was positioned at the time, matching trends and business logic. Moreover, at that time, community-based e-commerce has become a trend, overlapping with cross-border concepts, and has become a separate sector. Later, Tmall, Jingdong, and Vipshop will also strengthen their layout with independent concepts.
However, in the second half of 2017, Yan Fang talked about community, content and lifestyle, and rarely mentioned Haitao or cross-border e-commerce services. At the end of November, Xiaohongshu began to invite intensive stars. The star "planting grass" directly led to community activity. Subsequent news became even more sensitive: at the end of 2017, Xiaohongshu sent a message of transformation; in June 2018, Xiaohongshu received a $300 million financing from Ali, with a post-value valuation of over $3 billion. At that time, founder Qi Fang and CEO Mao Wenchao said in the internal letter that "everything goes back to zero, and then starts again", indicating a signal of restart. And Ali's competitiveness in the global e-commerce dimension has also given the outside world a deep imagination. Continued verification after financing. After August 2018, the key words of Yan Fang and Mao Wenchao are community, content, and lifestyle. And the Xiaohongshu's sprint to the fast-handed, vibrating short video site, the rich media form formed is a landscape of the short video industry. In addition, its technology-based concept, based on technology and data operations, continues to attract industry attention.
The same period data passed a signal: QuestMobile report shows that from the beginning of 2018 to the end of June 2018, the XiaohongshuDAU rose from more than 3 million to 8.406 million in the first half of the year. The Q1 daily growth rate ranked sixth in the overall network app, and the community category ranked first. This should be the footnote to the Xiaohongshu: since August 2018, it has weakened the e-commerce and fully transformed the content community. In fact, before this, it has been a long time ago and has established a leading position. Today's Xiaohongshu, although there are still shopping malls, and even self-operated goods, but it is not only for cross-border e-commerce, and even the concept of "e-commerce" is no longer strengthened. We also see that the cooperation between it and Ali is getting deeper and deeper. The platform of Xiaohongshu is almost the same as Ali's mapping.
And it has created a platform volume and brand influence in a year, and more concentrated community-oriented dimensions. Up to now, more than 300 million registered users, more than 100 million monthly users, of which more than 70% belong to the post-90 users, the community single-day notes more than 3 billion exposures, 70% of which are exposed from the notes of ordinary users. This data equivalent is enough to make the community, the social dimension of BAT, bytebeat, and the huge platform that has been regarded as a social e-commerce.
In the new statement, Xiaohongshu is a “lifestyle platform” that focuses on discovering a beautiful, real and diverse world, finding interesting stars, and co-marking their own lives together. “Marking me Life has become the Slogan of APP. Before this round of platform governance, the shape of the Xiaohongshu was like a “taobao of community concept” in the era of digital economy. We are continuing to open the platform, build an ecosystem, and establish a set of normative mechanisms around the platform. You may think that the situation of Xiaohongshu today is just a case of strategic transformation under the crisis of the concept of “cross-border e-commerce”. Its effectiveness, with contingency.
It seems to be the case on the surface. However, if you look back at the birth of Xiaohongshu and the development history of more than 6 years, you will find that there have been many adjustments and upgrades during the period, for example, from shopping strategy to information sharing community to “community + e-commerce”, one has never been The basis for change is that it has never shaken the “community” position. More than 6 years of operation and many classic service cases are the result of the “community”. Parallel to the "Internet +" concept, Xiaohongshu is like a "community +" service. Yan Fang’s remarks four years ago can explain many problems. In 2015, it was also the hottest year for the concept of “cross-border e-commerce”. In an interview, she said that the core form of the Xiaohongshu is a community, and this positioning is very important.
She emphasized at the time how far each community can go and how much value it can create. What matters is two things: first, who the seed user is, it will lay the genes; second, the core rules, what the community encourages and motivates, its values It will determine how far the community can go. You can see that the two dimensions she emphasizes are “communities”, and she does not mention “cross-border e-commerce” or “e-commerce” elements at all. Indeed, for more than six years, the Xiaohongshu has become more of a “community+” concept platform, and the e-commerce dimension is more like an extension of services than a core element. Quark believes that this context is the basis for today's results. At the same time, it is also the background of many companies "depending on" Xiaohongshu and manufacturing topics.
However, there is still a core issue here: although the “community” orientation has been maintained since its birth, Xiaohongshu is not the source of the “community” concept. The short video of various grasses is not its original, and the outside world has its own dimensions. A strong opponent, why Xiaohongshu can precipitate the above equivalent data, the first to get a high degree of pursuit, even the platform governance cycle, has become a topic of many companies relying on "dependency"? Compared with the concept of community concept, this topic is probably the secret of Xiaohongshu's transcending cross-border e-commerce concept and completing the transformation. It is also the real core competitiveness of this company. Let Quark try to dismantle the logic of the Xiaohongshu. Combining the above discussion and the impression that it has left over for more than six years, let us first look at how many elements this company has merged:
1. Consumption insights
This layer is the easiest to be forgotten. But for more than six years, we have seen that the two founders’ speeches are more human factors, including users and consumers. Not so much, Xiaohongshu emphasizes the concept of “community”, rather it knows more about consumer trends. Change, as well as changes in people's basic needs. Ignoring this, the entire platform building is actually very easy to collapse.
2. product strength
This layer is also easily forgotten. In fact, it is the technical condensation of consumer insight. The design of Xiaohongshu products, especially the UI interface and structure, is very popular among young people and has a high reputation. This is not because its technology is more than a cow, not only to present elements, such as thousands of people, information flow, waterfall flow and other styles, are public, universal form, Xiaohongshu platform structure and UI design can BAT, the headline is a street, infiltrating the Z generation of mind, not accidental, depends on its understanding of users, this is user-oriented, data-centric operations. Of course, technology presentation is also a key tool.
3. Open community orientation
Positioning is no longer talked about. However, when it comes to "lifestyle", it is deeply related to the following UGC-based mechanisms of the whole category, and will be more developed.
4. the whole category content generation mechanism
Combined with 3, there is a secret. There are many communities in the industry, including the Xiaohongshu at the beginning of 2013. They have all experienced arrogant growth, but they will soon encounter difficulties: First, the community will strengthen transactions almost without exception. Attributes, with a strong thinking of goods, so can not avoid the heavier supply chain, technology in the middle of the platform and infrastructure layout, cost pressure can not rely on divergent service dilute, transaction attributes of the business once the scale, community attributes and content generation The ability is not diluted, it is a contradiction with the transactional business, which leads to the deviation of the values of the whole platform. Second, in the last service form, with the upgrading and grading of consumption, the platform will lack the multi-category service and cannot build the so-called The scene, lacking more choices, is difficult to continue to infiltrate the minds of young users and cannot occupy more time.
Of course, there are a lot of movements from the merchandise end, but almost without exception, it is a bloody tear. Since 2014, there have been some statistics on the failure of entrepreneurship in the past 10 years. Among them, the community, vertical e-commerce, vertical community e-commerce and related O2O entrepreneurial projects have a lot of tragedies. They ignore a reality. We can understand it in the words of the above mentioned Fang Fang in 2015. How far a community can go and how much value can be created. What matters is two things. One is that the seed user lays the gene, the other is the core rule, and the direction and values of the community incentives determine how far it can go. Putting it here is the power of the core rules. It is impossible for the community to pursue commercialization. As long as you want to get through the depths, you will definitely face the game between the core rules of the community platform and commercialization. On this topic, Xiaohongshu CPO Deng Chao has a brilliant expression: "Community is the city, content is the service."
Quark believes that “community is the city” and “city” is the key to showcasing the secrets of the Xiaohongshu's full-class UGC mechanism, in line with the classic framework of complex economics. We see that in reality, many platforms seem to be large in scale, but they are degraded because of lack of diversity. The “content as a service” shows the platform between Xiaohongshu “grass economy” and users and users. The content production and distribution mechanism of trust and user self-organization form is based on the core rule orientation of the platform.
5. rich media form
It combines various media presentation forms such as video and graphic.
6. technical support
Xiaohongshu doesn't seem to focus on technology. A few days ago, on WAIC, XiaohongshuCTO Liu Wei emphasized that the entire community platform is like “a real, beautiful and diverse virtual city”. It is hard to imagine without technical support, and the latter is the foundation of “city”. Xiaohongshu uses technology to connect all aspects of the city, “providing infrastructure, utilities, safety protection measures” and “connecting residents, information and transactions” more efficiently. He points out the inner competitiveness from one angle: unlike the knowledge search of other search engines, the user is looking for the support of “lifestyle choice and decision-making”, clothing wear, accommodation, cosmetics, etc. The answer is extremely personal, there is no unified knowledge search results, so you must rely on AI to understand and distribute the content to achieve personalized search.
Of course there are many aspects. For example, brand marketing and platform active mechanisms, technical systems, etc. Its “decentralization” and respect for individual mechanisms convey a spirit of openness and tolerance. XiaohongshuAPP's slogan, "Marking my life," is a vivid manifestation. Among the several elements of dismantling, the UGC service mechanism and service of the whole category can make people feel the powerful side of Xiaohongshu directly. But the other few, alone, there is indeed a stronger platform outside. For example, the volume of short videos, Xiaohongshu is definitely not as fast as shaking hands. Other elements can't be seen alone. But the competitiveness of Xiaohongshu lies in the organic integration of the above multiple technologies and commercial elements. In this cycle, its value in the entire industry is a super synergist under the hood.
You might say that other peers are also moving towards the Xiaohongshu. For example, the above-mentioned topic "depending on the case", fast-handed investment, and byte-hopping acquisition of interactive encyclopedia are all cases of reverse integration. Many platforms are also gathering popular grass. Ali invested in the Xiaohongshu, the shape of the fight, and so on. In his own dimension, it is also an ecological construction with broad vision. Why, the Xiaohongshu, which has a smaller revenue and a lighter model, looks more powerful? In Quark's view, many of the peers are indeed swaying huge sums of money, moving toward the community and growing grass economy. However, the temporary combination and integration is completely different from the independent and organic form that Xiaohongshu has developed over the past six years with the help of consumer insights. The gap here is not a technical issue, nor a problem of product entry form, but a platform organic problem. Even if it develops a product form similar to Xiaohongshu overnight, it has a much richer media form, and has a much higher number of users than it. In the short to medium term, it is impossible to form a content production mechanism like it. It is not an organic and complicated "city".
In fact, we can see a similar scene in today's headlines and the impact of many other areas. For example, today's headlines restructure the information distribution form with algorithms, media and content product matrices. Baidu and Tencent want to curb its development, which is already difficult. The fight is more under the consumer rating, combining the "social + game mechanism + Group buying and other factors, coupled with open payment, logistics (also in the construction of a similar rookie system) and other links, to achieve a new platform. Similarly, Amoy and JD want to replicate the same form, and it is impossible. Because, behind this, the giants already have relatively complex business organizations, and it is impossible to return to today's headlines and fight for the birth of many sources to reorganize technical and commercial elements.
Back in the Xiaohongshu case, it is also impossible for other platforms to return to 2013 to replicate a community platform. A strong investment will be counterproductive. Because the tuyere has changed. On the surface, Xiaohongshu is fully focused on today's form in 2018, but in addition to community positioning, its number of users, the grass-growing economy and the entire industry environment, consumer trends have already broken other companies. This is of course dependent on the founders, decision makers and team factors. They are the power to turn all of this into reality. The Xiaohongshu at the moment is the best moment of the wind, the multi-technical elements, the super-cooperative industrial efficiency symbol of commercial elements in the field of life community.
Value dismantling under the tuyere
So, what is the value of this community platform? In 2018, when Ali led the round, Xiaohongshu was valued at $3 billion. At that time, its shape did not have a situation today. A month ago, at the end of July, Xiaohongshu was under the supervision of the platform. LatePost reported that before the launch, Xiaohongshu was investing in a new round of financing with a pre-value of $5 billion, with a financing amount of 400-500 million. Dollar. It is also said that the main points of concern of investors are: DAU's future growth space, liquidity, and whether it can become China's Instagram. Xiaohongshu subsequently denied this. However, in terms of growth momentum and influence at the moment, its valuation will at least be higher than the $3 billion in 2018.
Xiaohongshu is very cautious about this topic at the moment. This may involve reengineering its business model. Previously, its service model was "content + short video + e-commerce", plus advertising services, basically a complete closed loop. At present, the basic service module in APP is also the same. However, a friend familiar with the internal trend said that at least the "e-commerce" part of the "commercialization" is not an effort to emphasize. My personal understanding is that this trend is related to the fact that Xiaohongshu still needs to strengthen community attributes and build a deeper moat, and it is also related to the interests of investors such as Ali. After all, the Ali e-commerce dimension is strong, and if the Xiaohongshu still lays out the e-commerce module independently, there may be a direct game. There should be a more reasonable deep cooperation model between them, rather than a relatively simple grafting and diversion today.
Because Xiaohongshu is not lacking in consumer insight, with strong grass planting ability and user equivalent, it can sense the change of demand side faster than Ali and other partners. To be agile, you need to be able to customize and respond. In other words, the realization level of Xiaohongshu may have other rich forms. In this dimension, Quark does not agree with the view that it is regarded as "China's Instagram." On the Xiaohongshu, it really shines with the shadow of Instagram. It also flashes the look of Amoy, Fast, Know, Baidu, Today's headlines, B-station, and a lot of people. And it is not any single platform. The organicity of the Xiaohongshu is here. It is an independent platform. Respect for its independence in order to continue to capture its growth and investment value.
As far as the basic business model is concerned, the biggest face of the current Xiaohongshu is C2C. It comes from the power of UGC. But we see that it is incorporating the PGC mechanism, and the face of a B2C is also very clear. However, in Quark's view, in the next paragraph, especially in the platform governance process, Xiaohongshu should move to the S2B2C form on the basis of C2C and B2C. Its face will be very diverse, not only to ensure the vitality of the platform, but also to achieve normative governance, this process is not easy. But on this basis, we believe that the value of Xiaohongshu lies in the process of high-speed growth and improvement of governance, which will generate powerful platform capabilities. As for commercial realization, it should not be its urgent option at present. Of course, writing here, it is necessary to renew the topic of supervision and governance. This is indeed one of the pressing options for the current Xiaohongshu development.
You might say that since such an excellent platform, there have been many topics such as black goods since 2018, until this round of supervision. As of now, APP is still not available for download in multiple app stores. Quark does not regard this event as a negative indicator of the Xiaohongshu. Quite the contrary, it reflects the competitiveness of the Xiaohongshu, confirming our judgment: this is an open community platform with strong super-collaboration capabilities. The governance problem it encounters is the same as the challenges that BAT, the multi-platform, and the multiple platforms of the byte continue to encounter. The source is not in the platform itself, but in the ills under the line. Not long before it, the fast hands and the B stations have just experienced similar rectifications. Of course, the platform has no responsibility to evade supervision, review and evasion. Xiaohongshu's response is almost the same as that of Ali, and more platforms. In addition to relying on technology, it has set up a full-time governance team directly responsible for the founders, and continues to establish a long-term governance mechanism. in fact. Just before this round of regulation, Xiaohongshu has been building a relatively complete system of standards around this level.
The reason why the card is still in this round of encounters, one is related to its development potential since 2018, and the other is related to its previously focused content category. Since 2018, its transformation has achieved remarkable results, and its growth has been too fast. In the face of the Xiaohongshu, the outside world must re-establish this perception: in reality, although it is still a small company, Xiaohongshu is a giant platform in terms of content generation mechanism, content capacity and influence. In this dimension, it has no less influence than the BAT. It is indeed a super synergistic efficiency product on top of a community-based vent. It must be seen that platform governance like Xiaohongshu is a long-term process. While strengthening governance, this kind of open platform should be given an inclusiveness and cannot be killed by a stick. We believe that authorities can see more positive value for such platforms.
In fact, we have seen an excellent mechanism in the governance process of Ali over the years. Compared with the early positive anti-counterfeiting, it is more and more focused on long-term platform incentives, especially through platform services, through consumption upgrades, at the source of goods and services, industrial belts, etc., with a systemic thinking forging quality-driven incentives. system. Taobao and poly cost-effective in this process played a huge role. This has even forced the upgrading of China's manufacturing industry. We believe that with the deepening of the governance of Xiaohongshu, especially the strengthening of the core core rules emphasized by Yan Fang, this company should also be able to establish a more long-term mechanism.
Previously, after the fast-handed, B-station and other platforms resumed on the shelves, the growth rate did not weaken. Quark believes that once re-launched, the Xiaohongshu should also maintain its previous rhythm. Of course, this depends on the actual mode and operation of the next. If you are eager to cash out, it is likely to delay platform governance. Therefore, at this level, Quark asserts that in the next cycle, the focus of Xiaohongshu must be intensively focused on community content. Platform governance and business improvement are not contradictions, but rather a relationship between synchronization and rising. Once an effective model is built on these two levels, the Xiaohongshu will become even more powerful. In this process, its liquidation mode and business model will naturally form.