Xiaohongshu determines the three major commercialization directions in 2025, and comprehensively accelerates product infrastructure construction.

Written by Yang Qi

Edited by Zhang Xi 

There are new trends in Xiaohongshu's commercialization business. 

36Kr has learned that Xiaohongshu's commercialization business has recently clarified three major directions for 2025: 

First, in terms of industries, it will expand from focusing on consumer goods to meeting the needs of multiple industries, with a focus on breaking through in clue industries such as life services; 

Second, in terms of commercial product capabilities, more efforts will be made in the optimization of seeding and planting, the post-seeding measurement, and the direct delivery of customer business clues; 

Third, in terms of the ecosystem, it will move towards greater openness, and in the future, it will directly connect with more platforms, merchants and brands from different industries, and MCN agencies, etc. 

Advertising marketing and transactions (including e-commerce, local life, etc.) have always been the core revenue businesses of Xiaohongshu. Advertising marketing is also called the commercialization business internally and currently contributes to the main revenue of Xiaohongshu. 

A person familiar with Xiaohongshu told 36Kr, "The internal view of Xiaohongshu is that the'seeding and planting' strategy that the commercialization has focused on in the past two years has achieved 'phased results' in both top brand recognition and business income. If the next stage wants to introduce more industries, different types of brands and merchants, the product infrastructure needs to be further accelerated." Previously, according to media reports, the revenue of Xiaohongshu's commercialization business grew rapidly in 2023 and Q1 of 2024. 

The above-mentioned insider told 36Kr that the three major trends of the commercialization business occurred at the Xiaohongshu Business Co-creation Conference held in Shenzhen recently. "In the research before the conference, some brands and merchants, especially in life service industries such as travel services and home decoration, raised problems and complaints to the internal. At that time, the commercialization management realized that Xiaohongshu did not well meet their needs." The aforementioned person believes that these research results also directly affected the direction of Xiaohongshu's commercialization business. 

36Kr previously learned that in the first half of 2024, the number of small and medium-sized merchants operating on Xiaohongshu increased by 379% year-on-year, and the total transaction volume (GMV) of small and medium-sized merchants increased by 436% year-on-year. Among them, the growth rate of merchants in the life service industry is particularly significant. 

36Kr learned that another core topic of the Shenzhen Co-creation Conference is to pay more attention to the "business" indicators of merchants, that is, how much sales revenue merchants have obtained on the entire platform after placing on Xiaohongshu - in the past, the placement indicators of Xiaohongshu were exposure, click-through rate, and CPM (cost per mille), focusing on the seeding process rather than the result. 

The mismatch between the infrastructure capacity of commercial products and the growth rate of commercialization is an old problem that has always existed in Xiaohongshu. A former employee of Xiaohongshu's commercial products told 36Kr that since Xiaohongshu officially started commercialization in 2019, the internal has always wanted to solve the measurement problem of seeding and planting, and has launched multiple projects one after another, "but the biggest difficulty for content platforms is that it is difficult to obtain sales data on other platforms."

Therefore, for a long time, in order to know exactly how the effect of "seeding and planting" is, merchants can only know by checking the search growth on other platforms such as Taobao and JD.com after placing. A digital merchant once told 36Kr that after placing on Xiaohongshu, it is difficult for him to accurately grasp whether users have made a purchase, where they have made a purchase, and how much they have bought, which makes small and medium-sized merchants who are already sensitive to the effect of placement more hesitant. 

It is not the first time that Xiaohongshu has solved the measurement problem of product seeding and planting. At the WILL Business Conference in 2023, Xiaohongshu proposed to measure based on users' "in-depth reading" and "in-depth interaction" behaviors on Xiaohongshu without relying on external sales data. However, to clearly see the specific effect of the placement, the final solution still needs to obtain sales data through external cooperation to solve the problem. 

According to 36Kr's understanding, the current external data cooperation of Xiaohongshu is mainly divided into two categories. One category is that some brand parties cooperate with their own sales data and analyze it through Xiaohongshu's business tools.

The main tool used in this process is "Xiaohongshu Lingxi", which is the most important tool for Xiaohongshu to insight, optimize and measure the placement at present. A person close to Xiaohongshu told 36Kr that Lingxi will significantly lower the usage threshold before the end of this year, and the number of merchants who can directly use Lingxi will increase significantly. Some merchants have already received this news - previously, Lingxi was only open to some big brands, and brands not on the invited white list could only obtain data through the corresponding front-line salespeople of Xiaohongshu. 

As for the other category, it is to solve the data problem through tripartite cooperation with platforms such as JD.com. Currently, Xiaohongshu has formed Xiaohongxing, Xiaohongmeng, and Xiaohonglian with Taobao Alliance, JD.com, and Vipshop respectively. The core goal is to directly connect the seeding and planting data of Xiaohongshu and the conversion data on each platform, so that merchants can accurately see the effect and optimization direction after placing. 

36Kr learned that at the upcoming WILL Business Conference in 2025, Xiaohongshu will announce a new solution to the seeding and planting measurement problem, and the above two external cooperation forms will be important contents. Different from the previous iterations, a Xiaohongshu agent said, "This solution is more thorough and theoretically may solve the past measurement problem." 

In addition to measuring the effects of external platforms, another way for merchants to directly see the placement effect is to improve the direct conversion within Xiaohongshu. That is, to allow merchants to complete the entire cycle of opening a store, seeding and planting, promoting with traffic, and selling within the Xiaohongshu platform in one stop. This can not only improve the conversion efficiency from placement to sales, but also directly measure the placement effect without relying on external data. 

Especially in 2023, with Dong Jie, Zhang Xiaohui, etc. driving the breakthrough of Xiaohongshu's e-commerce, integrating commercialization and the e-commerce closed loop has become a necessary option, which is also one of the important directions of Xiaohongshu's commercial products in 2024.

In order to accelerate the formation of a closed loop within the station for some well-known brands and merchants, it was previously reported by the media that in the middle of 2023, Xiaohongshu newly established the KA (Key Account) group from the e-commerce operation team, which is concurrently responsible by the person in charge of the commercial luxury and fashion service, in order to facilitate the settlement of big brands in Xiaohongshu's e-commerce. 

36Kr also learned that at the beginning of September, Xiaohongshu's integrated e-commerce marketing platform "Chengfeng" has been fully and quantitatively opened to merchants. Some merchants told 36Kr that Xiaohongshu will migrate all the e-commerce placement functions previously distributed on other products to "Chengfeng" by the end of December, so as to more efficiently coordinate the commercialization and e-commerce businesses and accelerate the closed loop within the station. 

Not long ago, the Xiaohongshu Double 11 battle report showed that the number of merchants with a transaction volume of over 10 million during the Double 11 period was 4.8 times that of the same period last year, and the number of buyers with a single transaction volume of over 10 million was 3.6 times that of the same period last year. 36Kr learned that during this year's Double 11 period, after a fashion brand was seeded and planted on Xiaohongshu and placed through Chengfeng, the ROI reached more than 8 at the highest, making a certain clothing of this brand become a popular commodity in Xiaohongshu's e-commerce.