Social e-commerce platform Xiaohongshu on Tuesday said that it is opening up to more merchants by broadening its restrictive vendor account parameters to include sellers of all sizes rather than just trademarked brands, Chinese media reported.
Why it matters: Xiaohongshu, also known as RED, is pushing its commercialization initiative forward as it looks to improve monetization of its users and traffic. The app is one of a number of content-driven apps which have struggled to land on a successful and scaleable monetization model.
- China’s social e-commerce users were expected to hit 713 million by 2019, up 17.3% year on year from 608 million in 2018, according to data from research institute Iimedia.
- In addition to traditional e-commerce rivals like Alibaba and JD.com, Xiaohongshu is competing with short video apps like Douyin and Kuaishou, as well as WeChat, which saw a spike in e-commerce transactions via its mini program feature.
Details: Xiaohongshu’s official brand accounts had previously only been open to trademarked brands. Now, the platform has broadened the category to “enterprise accounts” and allows merchants of different sizes to sell on the platform as long as they have a valid business operating license in China or overseas.
- Users of the enterprise account will have access to several free features such as data intelligence, custom mobile-friendly web pages, operating tools, and fan base integration capabilities.
- In addition, the account also includes a location-based recommendation feature to allow sellers to connect with buyers both online and offline.
Context: Xiaohongshu had a tough 2019, during which it faced growing criticism from the public on the number of fraudulent reviews on the platform, censure from the government for unauthorized user data collection, and tried to commercialize at the cost of its partners.
- The official brand account feature, rolled out at the beginning of 2019, has registered 29,000 brands from 23 industries.
- Xiaohongshu was pulled from major Chinese Android app stores in July and then from the iOS store in August last year before it returned to the stores more than three months later.
- The company said it had a total of 250 million users and more than 85 million monthly active users as of June.