Xiaohongshu "plants grass" to play, but "drunkards don't want to drink"

In 2013, Xiaohongshu was officially established in Shanghai. Perhaps at that time, no one would have expected that this PGC-based shopping strategy community would subvert the business logic of traditional e-commerce.

In 2016, founder Qu Fang led Xiaohongshu to transform into a content flow platform, and began to introduce creators to "plant grass" to experience the product. Overnight, Xiaohongshu quickly broke the circle among the female consumer group, and the traffic was getting bigger and bigger.

According to public information, the current valuation of Xiaohongshu has exceeded 10 billion US dollars, and its monthly life has exceeded 100 million. It is in a leading position in the domestic grass-growing community. But it turns out that Xiaohongshu’s ambition does not seem to be limited to “planting grass.” After completing the “planting grass” community operation, how to “pluck grass” is obviously one of Xiaohongshu’s next goals.

According to 36 Krypton reports, Xiaohongshu recently launched the trendy top-selling IP "Flying Window", and plans to gradually expand from the trendy play to the sale of the entire trendy category, creating a domestic top trendy top-line sales channel.

From gourmet food to beauty makeup, from travel to luxury goods, Xiaohongshu is eager to break through the circle, but will trendy play be a good choice?

Xiaohongshu "plants grass" to play business

For its own positioning, Xiaohongshu has always taken the "lifestyle platform for young people" as its official positioning. It’s just that in the eyes of the majority of users, Xiaohongshu is just a simple “grass planting” platform.

Therefore, Xiaohongshu began to want to get rid of the single label of "planting grass". Trendy play has become a new piece of cake that Xiaohongshu is eyeing.

At the end of 2021, Xiaohongshu once opened the RTS (RED TOY SHOW) online fashion show. What is different from the past is that Xiaohongshu is not a pure trendy game content sharing media channel, but an online trendy game exhibition that integrates trendy game display, content sharing, and in-site purchase.

Xiaohongshu will choose the trendy play market, not aimlessly.

In recent years, China's trendy toy market has entered a state of accelerated growth. On the one hand, the improvement of the domestic economic level has increased the expansion of residents' consumption demand; on the other hand, the generation Z group, which has a stronger willingness to consume new things, has begun to become the main force of consumption.

Under the promotion of the two parties, the domestic trendy play market has expanded rapidly. According to the "2021 China Trendy Toy Market Development Report" (hereinafter referred to as the "report") issued by the National Conditions and Big Data Research Center of the Chinese Academy of Social Sciences, the scale of my country's trendy toy industry has reached 6.3 billion yuan in 2015, and the scale of the trendy toy industry in 2015-2020 The compound annual growth rate is as high as 36%. It is estimated that in 2022, the scale of China's entire trendy toy retail market will reach 47.8 billion yuan.

The "Report" pointed out that trendy toys belong to the "surprise economy", with social attributes such as social interaction, collection, and entertainment, and are becoming an important carrier for the new generation of young people to relax and communicate. It is also based on this logic that Xiaohongshu, whose user group structure tends to be younger, will choose to cut into the trendy play market.

It's just that the road to Chaowan track may not be so easy.

Isn't the meaning of "Little Red Book" trendy?

In the eyes of Xiaohongshu, there may also be certain passive factors in doing fashion games.

For a long time, Xiaohongshu has been running on the road of commercialization. From going overseas, or expanding the territory through investment, you can see the efforts made by Xiaohongshu in commercialization. But the fact is that first came the news of an IPO in the United States in April 2021, the rumors of an IPO in Hong Kong in October, and then the denial of the rumors of listing. Obviously, Xiaohongshu wants to go public, but the weak business model prevents it from finding the opportunity to ring the bell.

The underlying logic that causes this is actually very simple. For users, the value of Xiaohongshu is nothing more than sharing their own consumption experience, triggering more user interaction and resonance, to obtain post-consumption satisfaction; at the same time This logic will in turn prompt other users to consume, thereby triggering more sharing and forming a logical closed loop of the "Grass Planting Community".

Although Xiaohongshu can indeed stimulate consumers' impulse to consume, after all, they have to spend "real money" to consume, whether it is offline food exploration, real experience of skin care products, or experience of tourist attractions... In short It is difficult for Xiaohongshu itself to trigger users' consumption actions, and it is naturally difficult to realize this part of traffic.

Xiaohongshu also thought about doing e-commerce. After Double 11 in 2017, Qu Fang once said in public: "Theoretically, users can enter the community to read content and purchase, without having to jump out of other apps to search, which is a smoother closed-loop experience. Positive competition will definitely come, so now It is urgent to improve e-commerce capabilities at this stage.”

Perhaps it was discovered during the transition to e-commerce that it still has shortcomings. Since then, the founder and executive team of Xiaohongshu no longer mentioned e-commerce, but instead said that Xiaohongshu is a "community". However, it turns out that Xiaohongshu still has great expectations for e-commerce. The best example is to choose Chaowan as the entry point. Although Chaowan cannot bring much economic benefit to Xiaohongshu in the short term, the online purchase model based on the Xiaohongshu platform is at least the first step on the road to e-commerce.

Looking at it from another perspective, Xiaohongshu may also be regarded as a "professional counterpart".

First of all, Xiaohongshu has a huge group of young users. According to iResearch’s Xiaohongshu user portrait data, as of October 2020, female users accounted for nearly 80% of Xiaohongshu; and according to the age distribution of users, Xiaohongshu’s main users are young people under the age of 30 And some users aged 31-35.

The young and mostly female user structure means that Xiaohongshu has a user base that is naturally suitable for community sharing and e-commerce.

If compared with the consumer group of Bubble Mart, this advantage will be further magnified. In the Bubble Mart user research report released by Reed Smith, it can be seen that the overall user portrait of Bubble Mart is mainly young people in the 18-35 age group, and female consumers account for 70%-80% .

The highly repetitive user structure of the two seems to explain why Xiaohongshu chose to break into the trendy play market.

From the perspective of Maslow's pyramid of needs, when people meet the basic material needs of life, they will pursue more higher-level needs in the pyramid, such as emotion, social status, and self-realization. Young consumers of Generation Z will pursue deep-seated emotional needs such as self-pleasure, interest pursuit, personalization, and social identity. This is also the underlying logic behind the rise of trendy play culture.

However, the greater the opportunity, the greater the competition. At least in the domestic market, there are many trendy brands and the competition is extremely fierce.

On December 11, 2020, the "first blind box" Bubble Mart was listed on the Hong Kong stock market, and its market value exceeded HK$100 billion on the first day. But now, compared with the highest value of 105 Hong Kong dollars in stock prices, it has been cut in half.

The main reason is that market competition has almost reached a white-hot stage. MINISO's trendy play collection store brand "TOP TOY" accelerated its store opening across the country; 52TOYS successively opened brand stores in Beijing, Chengdu and other places; Bilibili launched trendy play crowdfunding... All of a sudden, big factories gathered and capital gathered together, They all imply that the second half of Chaowan Battlefield will be extremely intense.

In addition, there is a deep bond between Trendy Play and content IP. If you want to achieve long-term growth in the Trendy Play market, content IP is always a hurdle that all players cannot bypass. Taking Disney, a world-renowned IP manufacturer as an example, the rich IP content from animation to film and television, and the fan economy based on high-value IP are the important underlying logic of Disney’s growth.

Obviously, compared to other players who entered the game later, Xiaohongshu has a user group with sufficient traffic and strong purchasing power, which is also a solid foundation for Xiaohongshu to set foot on the trendy game market. But on the other hand, Xiaohongshu, which was born in the Internet content community, lacks accumulation in content IP, manufacturing and production. Compared with players such as Bubble Mart and TOP TOY, Xiaohongshu has no accumulation of offline channels.

This also means that if Xiaohongshu wants to cut into e-commerce from Chaowan, the road may also be very difficult.

Text|Songuo Finance

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Origin blog.csdn.net/songguocaijing/article/details/122555930