From obscurity to having hundreds of millions of users, the Xiaohongshu platform has become a well-known e-commerce brand in China in just ten years. But behind it is not only the attribute of e-commerce. So what is the business model of Xiaohongshu?
What is the Little Red Book platform like?
First of all, let's position it, this is a content sharing platform. On the platform, content creators are users, and content users are also users. Since its launch in March 2014, the platform is just a pure (UGC) community model.
On the above, people can share their consumption experiences, feelings and experiences online, and users with related needs can also actively search for various shopping strategies. It can be said that with the help of the Xiaohongshu platform, people have realized "planting grass" and "pulling grass".
Xiaohongshu business model
Unlike other e-commerce platforms, it has a single business model. The business model of Xiaohongshu is comprehensive and complex, including the following types,
1. Brokerage model: Since this is a content sharing platform, it has a rich number of talents. A brokerage relationship is formed between the platform and these talents. Xiaohongshu has its own official platform, Dandelion.
After reaching 5,000 fans, the Daren can join Dandelion. And when the brand has a need for communication, it will establish communication with the talent through the platform. As the platform side, Xiaohongshu draws a certain percentage of commission as income.
2. Hard advertising model: Like most e-commerce platforms, the platform also has advertising space. Depending on the location and the traffic you get, the cost of placing a fixed location will naturally be different. When the brand side conducts communication, it will choose the corresponding position use right according to the communication needs.
3. Commercial entry model: The commercial entry model is the most basic Xiaohongshu business model. The business entry model is combined with the e-commerce attributes of the platform. Brands need to pay a certain cost to open a store on the platform, and the cost varies according to the store level.
In addition, after opening a store, if you want to upgrade the store's functions to make the store opening process smoother, you also need to increase the corresponding investment in function upgrades. In the subsequent product sales process, there will be corresponding commission income.
Since Xiaohongshu is a multi-attribute platform, this also makes the business model of Xiaohongshu more diverse. A multi-attribute platform can enrich the user experience, realize platform drainage to the broadest extent, and expand the source of capital income as much as possible.
This series of advantages has contributed to the rise of the Xiaohongshu platform in the past ten years. If you want to enter the Xiaohongshu platform, or make good use of the platform resources of Xiaohongshu to help the development of your own brand, the first thing you need to do is to find out its business model.
The above is the sharing of "Little Red Book Business Model", I hope it will be helpful to everyone.