The store that has been operating for 9 years has been closed

After 9 years of self-operated e-commerce, Xiaohongshu decided to give up.

Half a month after Xiaohongshu announced that the self-operated e-commerce platform "Little Oasis" was suspended, the platform's self-operated store "Welfare Club" suddenly announced its closure.

At this point, the development of Xiaohongshu's self-operated e-commerce has been pressed.

01

Operating a 16 million fan store for nine years, closed

On September 15, Xiaohongshu's "Welfare Club" released a letter to users, announcing that the "Welfare Club" will stop selling goods on October 16 and officially close the store on November 16.

For consumers, the sudden closure of the "welfare club" is a little sudden.

After all, on September 11, the official WeChat account of "Welfare Club" also posted a preview of the live broadcast list.

Even on the afternoon of the day when the store was announced, the "Welfare Club" still broadcast live as usual. The anchor said that the live broadcast room of the welfare club will end on September 28, and consumers can still place orders before November 15.

It is reported that the Welfare Society is a cross-border self-operated store established by Xiaohongshu in 2014, covering categories such as beauty and clothing. Its birth is to help Xiaohongshu create a commercial closed loop from "planting grass" to "pulling weeds".

In the first year of its launch, the GMV of Welfare Society exceeded 300 million yuan.

Compared with the small oasis where only 9 products sold over 1,000, the welfare club has a wider reputation and higher sales.

As of press time, the number of fans in the welfare club store reached 16.69 million, SKU reached 999+, the cumulative sales of many products exceeded 10w+, and even a hair mask product reached 31w+.

With such outstanding achievements, Xiaohongshu still resolutely chose to close it, perhaps because of the sentence in the letter-

More diverse purchasing scenarios appear in Xiaohongshu, and diverse user purchasing needs will also arise... Xiaohongshu will concentrate resources and strength to serve the development of more buyers, managers, merchants and brands in e-commerce... We will integrate into the richer Xiaohongshu e-commerce to better serve your diverse shopping needs.

The subtext may be: self-operated e-commerce is no longer the development path of Xiaohongshu's future e-commerce, and the focus is on e-commerce around buyers, managers, merchants and brands.

02

Xiaohongshu found its own e-commerce path

"This is not only a farewell, but also a new beginning."

As Xiaohongshu said, we should join everyone in the increasingly rich Xiaohongshu e-commerce.

In August, Xiaohongshu held a theme talk on the link e-commerce partner week "The Buyer Time is Coming". This is the first time that Xiaohongshu e-commerce has spoken out to the outside world as a whole.

At the meeting, Xiaohongshu COO Conan said that individuals such as Xiaohongshu buyers and managers have become Xiaohongshu's most dynamic e-commerce power. In the past year and a half, the scale of buyers and managers on the platform has increased by 27 times, the number of active sellers has increased by 10 times, and the number of purchasers has increased by 12 times.

The surge in the number of buyers, managers, merchants and purchasers seems to have injected a shot in the heart to Xiaohongshu e-commerce.

Compared with the same period in 2022, the number of live broadcasts of Xiaohong Bookstores' monthly broadcasts increased by 290% year-on-year, and the number of monthly live broadcast purchasers increased by 220% year-on-year.

Among them, Dong Jie and Zhang Xiaohui have become benchmark models of Xiaohongshu live e-commerce, arousing the interest of many brands in Xiaohongshu live broadcast.

McQueen, head of Xiaohongshu Merchant Department, said:

Merchants attach more importance to Xiaohongshu e-commerce than before, especially after Dong Jie and Zhang Xiaohui were broadcast live, many merchants came to visit and hoped to connect.

Recently, Xiaohongshu has integrated e-commerce business and live broadcast business, established a brand new trading department, becoming a first-level department parallel to the community department and the commercial department.

With the closure of "Little Oasis" and "Welfare Society", Xiaohongshu can integrate and focus people, things, and power, and quickly "buyers" e-commerce on the ALL IN platform.

Just like at the buyer conference, Xiaohongshu announced that it would invest 50 billion traffic to support more buyers in Xiaohongshu, and at the same time, it invested 50 billion traffic to support merchants in Xiaohongshu.

Moreover, the platform will continue to invest in the future, inviting more buyers, managers, merchants and brands in Xiaohongshu to join and build a prosperous e-commerce ecosystem.

Some industry insiders said that Xiaohongshu has given better development space for "buying flashlight e-commerce" ecology that focuses more on word of mouth and forms with social e-commerce genes.

At present, nearly 40 million people have the intention to buy on Xiaohongshu every day, of which nearly 3 million comments are asking for links and purchases, and the proportion of searches related to shopping decisions accounts for as high as 87%.

03

E-commerce for 9 years, finally the result

The end of traffic is for conversion.

If an Internet platform with 260 million yuan per month is not converted by advertising alone, it is simply an "outlier" in front of its peers.

As a leading Internet platform, Xiaohongshu's obsession with e-commerce is a dream.

Since the birth of the protagonist of this article, "Welfare Society", Xiaohongshu has been focusing on e-commerce. However, in the era when the entire platform is chasing GMV, Xiaohongshu has never produced a satisfactory answer.

Although Welfare Society earned 300 million yuan of GMV in one year of its launch, due to its lack of advantages in commodity procurement, supply chain and quality control in the early stage, the market share of Welfare Society fell by 6.5% in 2016 to 4.3% in the first quarter of 2018.

From 2016 to 2018, Xiaohongshu has successively tried to settle in third-party merchants, launch its own brand "Youguang", and open its first offline experience store.

In 2019, it was reported that Xiaohongshu was internally testing its live broadcast business. However, some media said that the purpose of live broadcast at that time was not to monetize, but another form of expression of social sharing.

This may be a game between business and content, and it is also a constraint on Xiaohongshu's commercial monetization.

In 2020, Xiaohongshu's e-commerce GMV was US$1 billion. At this time, the GMV of Douyin e-commerce has reached 500 billion yuan.

If you are self-sufficient, then Xiaohongshu's size is enough, but looking at the industry, Xiaohongshu's GMV is like a "light of fireflies" in front of its peers.

Therefore, in 2021, Mao Wenchao, the core founder of Xiaohongshu, proposed "e-commerce should be put in the community." That year, Xiaohongshu began to "walking on two legs", cut off external links, officially implemented the "integrated number and store" strategy, and also launched the self-operated platform "Little Oasis".

Although self-operated e-commerce has been put to a halt, it took Xiaohongshu nearly 10 years to develop an e-commerce system that is difficult to replicate - buying e-commerce.

As Conan said, any ordinary creator who loves life may become a buyer of Xiaohongshu.

Just like Douyin’s “interest e-commerce” and Kuaishou’s “trust e-commerce”, Xiaohongshu’s “buying e-commerce” is in line with its own platform tone.

You should know that "buying flash e-commerce" is an unprecedented e-commerce model, which means that Xiaohongshu has no reference to others.

It may be that in a few years, Xiaohongshu will become an e-commerce star after Douyin; it is also possible that Xiaohongshu e-commerce will continue to repeat the same mistakes.

Therefore, it takes more time to write how far Xiaohongshu and its "software-buying e-commerce" can go.