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The monetization on the Chinese Xiaohongshu platform

By opening up to more merchants, the Xiaohongshu social e-commerce platform expands its restrictive vendor account settings to include sellers of all sizes rather than just registered trademarks.

This allows the platform to advance its marketing initiative.

It seeks to improve the monetization of its users and traffic.

The application is one of some content-driven applications that have struggled to achieve a successful and scalable monetization model.

Stay tuned, we’ll take a closer look at what’s going on.

  • Competition from Xiaohongshu
  • Why such a breakthrough?
  • What’s changed?

I. Xiaohongshu’s competition

The number of social e-commerce users in China reached 713 million in 2019, an increase of 17.3% from 608 million in 2018.

In addition to Alibaba and JD .com, traditional e-commerce rivals, Xiaohongshu competes with short video applications such as Douyin and Kuaishou, as well as WeChat.

During the KOL purge, Xiaohongshu is struggling to regain the trust of users.


II. Why such a breakthrough?

The year 2019 has been difficult for Xiaohongshu.

It faced government censorship for collecting data from unauthorized users, growing public criticism of the number of fraudulent reviews on the platform, and attempts to market to the detriment of its partners.

The official brand account function, deployed in early 2019, registered 29,000 brands from 23 sectors.

Xiaohongshu was removed from China’s leading Android app stores in July, then from the iOS store in August last year, before returning to the stores more than three months later.

III. What has changed?

Previously, Xiaohongshu’s official accounts were only open to registered trademarks.

Today, if companies have a valid business license in China or abroad, the platform allows traders of different sizes to sell on the platform.

Users of the corporate account will have access to several free features such as customized web pages suitable for mobile phones, data information, operating tools, and fan base integration capabilities.

Also, a location-based recommendation feature to allow sellers to connect with online and offline buyers is included in the account.


In conclusion

Despite many setbacks over the past year, Xiaohongshu is reinventing itself for business.

Let’s hope for the platform that this offers it good prospects for the years to come.


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