Xiaohongshu Has Merged Buyer and Merchant Operations of E-commerce Division

Xiaohongshu Platform

Iwas revealed that Xiaohongshu, known internationally as Red, has merged its e-commerce buyer and merchant operations into a unified department within its larger e-commerce division. Previously, these operations were managed separately in two distinct departments.

In this context, buyers primarily refer to key opinion leaders (KOLs) and influencers who promote products through live streaming.

The new department will be led by Yin Shi, who reports to COO Ke Nan. This merger marks a significant change since the establishment of the trading division in 2023.

It indicates that Xiaohongshu, after strengthening its live streaming presence through buyer operations, is now broadening its offerings to include both influencer and store live streams.

Yin Shi was previously in charge of Xiaohongshu’s live streaming business. His background is well-suited to foster the joint development of influencer and merchant live streaming,

Sources also revealed that live streaming e-commerce, or live commerce, is a key investment area for Xiaohongshu in 2024. The consolidation of influencer and merchant operations into a single department is expected to enhance efficiency.

Xiaohongshu experienced rapid e-commerce growth in 2023, with transaction volumes in multiple sectors, such as fashion, increasing by 380% year-on-year, and home furnishings by 300% year-on-year.

Expanding from influencer live streams to merchant live streams is seen as a necessary step for Xiaohongshu to establish a broader purchasing mindset and boost transaction volumes.

Xiaohongshu Platform

In 2023, Xiaohongshu integrated its e-commerce and live streaming businesses to form a new trading department, operating alongside the community and commercial departments. Following this adjustment, live commerce gained greater importance.

Subsequent actions by Xiaohongshu confirmed this shift. In August 2023, Xiaohongshu announced the advent of the “buyer era.” The buyer model has since become a distinctive feature of Xiaohongshu, with various influencers gaining public attention.

Reflecting this in the data, Xiaohongshu’s sales report for the 618 shopping festival released on May 20 shows that the gross merchandise volume (GMV) from merchant live streaming on the first day of the festival increased 4.2 times compared to the same period last year, with the number of live streams on the first day being 3.8 times higher.

A merchant participating in this year’s 618 festival on Xiaohongshu told that Xiaohongshu’s increased support for merchant live streaming is evident.

However, the increase in the number of merchant live streams means more intense competition. The merchant added that some popular live streamers’ commissions have doubled, but Xiaohongshu still offers good value compared to other leading live commerce platforms.

To better support live streaming merchants, Xiaohongshu conducted a round of surveys at the beginning of the year to understand the challenges they face. Subsequently, Xiaohongshu introduced a set of practical methods, improving product links based on traffic acquisition and conversion techniques.

A survey participant told that merchants appreciate Xiaohongshu’s low return rates, high repurchase rates, and strong interactivity.

“Merchant live streaming should not be a simple sales venue but should involve patient explanations, good service, interaction with users, and a rich variety of products, giving users the feeling of visiting physical stores.”

Xiaohongshu Platform

Over the past year, e-commerce merchants in the fiercely competitive market have been flocking to Xiaohongshu. In 2023, the number of new merchants in Xiaohongshu’s two key sectors—fashion and home furnishings—grew more than sixfold and fourfold year-on-year, respectively.

In the early days of live commerce, brand merchants could quickly gain popularity through influencer live streams.

However, as the platform and brands grow, the focus has shifted to the sustainability and certainty of merchant operations, with live streaming viewed as a way to retain users and ensure stable operations.

A merchant told  that “it’s inevitable for brands to value live streaming. Having their own channel allows them to better convey their brand philosophy.” More importantly, merchant live streaming can spur further growth beyond influencer live streams while potentially saving costs.

This shift indicates that Xiaohongshu’s e-commerce business has entered a new stage.

2024 marks the eleventh year since Xiaohongshu was founded and the tenth year of its exploration into e-commerce. Balancing e-commerce and community aspects has been a challenging issue for content communities.

From the earliest cross-border e-commerce Fulishe to the later success of celebrity-turned-influencer Dong Jie’s live streams, Xiaohongshu has finally found a new direction in e-commerce.

In February last year, during the launch of Dong’s first live stream, brands were unsure about the sales potential of Xiaohongshu’s live streams.

However, when Dong’s second live stream surpassed 30 million in GMV, it exceeded Xiaohongshu’s internal expectations, and brands reportedly regretted not joining earlier.

Following Dong’s success, more buyers emerged, and the volume of buyer live streams grew. A source close to Xiaohongshu told that a buyer with 35,000 followers could generate a monthly GMV of 3 million.

In the current phase of e-commerce, few companies can still create growth, and Xiaohongshu appears to be one of them.

Although platforms like Douyin, Taobao, and WeChat Channels have moved past their fastest growth periods in content e-commerce, compared to traditional e-commerce and retail markets, content e-commerce still has a growth advantage.

According to NielsenIQ, in 2023, the total retail sales of China’s fast-moving consumer goods saw a slight decline of 0.04% year-on-year, while online sales facilitated by content e-commerce surged 55.9% year-on-year despite e-commerce sales dipping by 5.8%.

Ethan Johnson
Ethan's journey into journalism began with a deep curiosity about how businesses operate and evolve in today's dynamic markets. Armed with a degree in Journalism from a prestigious university, he embarked on his career, initially covering local business developments before expanding his scope to national and international commerce news.