Xiaohongshu Merges its Social and E-Commerce Teams

Chinese lifestyle and social media platform Xiaohongshu (Chinese: 小红书), also known as Little Red Book or RED, announced yesterday that it will merge its social and e-commerce units to create a new social department.

Chief operating officer Ke Nan will lead the new team. 

According to an insider from the company, the decision is a "natural iteration as sections evolve for a shared vision."

Specifically, the company aims to offer more users an online community representing diverse lifestyles, in which transaction will be a key part, said the aforementioned person who spoke on condition of anonymity.

Within the community, users can cultivate their buying habits while businesses generate a sales ecosystem reliant on social media and influencer marketing.

This is not the first time Xiaohongshu has made adjustments to its internal structure. In February 2019, it incorporated third-party vendors into its social media affiliate, renaming them "brand accounts."

Meanwhile, during the 2019 overhaul, the Shanghai-based unicorn also integrated merchandise procurement, marketing, warehousing, logistics and customer service, in an attempt to upgrade its iconic fu li she, or "welfare society."

The term refers to a cross-border shopping service launched in 2014 to drive sales of imported goods. This marked the start of Xiaohongshu's pivot to e-commerce as a major avenue of monetization.

However, in the face of increasingly stiff competition, Xiaohongshu over the years has gone steadily from a direct-to-customer (D2C) business model to introducing more third-party brand merchants to its platform.

Since its inception in 2013, Xiaohongshu has constantly evolved, shifting from a community for sharing shopping tips to a platform for influencer marketing and to a lifestyle community.

Currently, Xiaohongshu Mall, a B2C e-commerce marketplace, features two main types of merchants, self-run stores and third-party brand owners. This makes it resemble e-commerce giants such as JD.com and Suning.

Zhi Heng, chief marketing officer of Xiaohongshu, revealed in late December 2021 that as of November, the platform had 200 million monthly active users, of which 72% are born in the 1990s and 50% reside in tier-one and tier-two cities.