Red: How to use sufficient flow to solve the cash dilemma?

Posted by zaiwu 20/05/2019 0 Comment(s) E-Commerce China, Doing Business in China,

Doamtters says to you:


Xiaohong shu which have 200 million users may be more suitable for the positioning of the content community than the community e-commerce.It have anther name in english is Red.Founded in 2013, Red has now become a star-studded VC resources, D round valuation of $3 billion and 200 million users choose the grass platform, community e-commerce, flow depression after nearly six years of development.In Red, users record the details of their lives through short video, pictures and texts.The community generates billions of note exposures every day.Its content covers fashion, skin care, cosmetics, food, travel, film and television, reading, fitness and other lifestyle areas.However, most of its traffic ends up in the hands of offline merchants, and the profit conversion rate of xiaohong shu platform is not high.

Today, Domatters shares the user operation model of Red and its profit model, and explores how to solve the problem of Red's realization problem.


The reason why Red's user operation is excellent is that Red does three things well: entry point, user experience and growth model.



Accurate traffic entry point is the first successful factor in its traffic acquisition.


Why do users search for life categories?Because everyone has all kinds of problems in life.This is a very high frequency requirement,and there must be a situation that has never been met or that has not been solved before.At this time, the experience of others for us is the encyclopedia and strategy.Rapid access to search results is the ultimate in efficiency and certainty that makes for a great user experience.We take for granted a sentence "as long as you baidu, you will know" in PC era.But in the mobile age that's not the case, but what matters is traffic.


Red seizes this time opportunity and begin to divide the discharge cake of mobile Internet.There is a very important decision that the position of red platform is "life".It found an entry point for mobile search and developed into a full-path service platform for life search.Its slogan changed from "find good things abroad" in 2014, to "good things all over the world" in 2015, to "good life all over the world" in 2016, and finally to "mark my life" now.The evolution history of slogan also shows the gradual change of its positioning, from overseas online shopping strategy to cross-border e-commerce, and gradually to the mode of community + content + e-commerce, becoming a life sharing platform.


How is the content produced? It comes from UGC.The world of the Internet allows users to dilute their real identities, and everyone has the opportunity to constantly reinvent themselves.Users find identity by producing content and socializing, which is also the atmosphere of Red.


Many people will be waiting for others to post "envy envy", which is a typical show off psychology, and the core of show off is to find the audience to identify with their own behavior, which is also a sense of identity.The satisfaction brought by certainty and sense of identity jointly influences a series of behaviors of users such as learning, imitation, production and sharing.Red through the content supply and demand + user psychological needs to create a full horsepower content production engine.


  • Excellent product user experience


Xiaohongshu has more than 200 million users, among which the post-90s and post-95s are the most active users by Jan in 2019.Traffic acquisition is the first step and generating high user stickiness is the second step.Stickiness comes from the user experience.Through the combination of three aspects that basic experience, content display strategy and social atmosphere, the user experience of Red can generate user stickiness which is worth further learning.


Basic product experience:


For example, the most core content display page in the product.



This is an excellent product and interaction design ability. The interaction is simple and easy to learn. The content is presented in a carefully designed sequence with a clear purpose, which is of great learning significance.


Content display strategy:


The content display strategy of xiaohong shu is user portrait and real-time update.Among them, the user portrait is the comprehensive output from all actions in the user life cycle, which is a long-term result.Its function is that when users do not have new important behaviors (for example, active search), the Red can also present content according to the user's portrait, so that users will not be disappointed in the platform.Never underestimate every action on the Internet products, whether it is click, slide up and down, pull left and right, or even in a daze, the data acquisition model will quantify these actions into data on the record.

Real-time updates are instantaneous responses to important user behavior.For example, when you search the content of "IG", the back page will immediately show the relevant content of e-sports according to a certain proportion of weight."Originally I was interested in the content here so much", which is also an important feature design to generate user stickiness.


The new dimensions of user portraits generated by important behaviors should be weighted and de-weighted according to the iteration of portraits and the passage of time, and there is still room for optimization.


Social atmosphere:


The introduction of social media to facilitate the generation of new content and transactions is now the norm for content platforms.The social atmosphere is good mainly because there is no obvious grumpiness in the platform, which gives users a loving communication scene and makes them willing to stay.It has to do with the management style and approach of the platform.


  • Polished flow growth model


After creating a product experience with high user stickiness, the third step is to make the plate bigger and realize scale growth.Six years of traffic growth model is also a Red resources to perfusion.


Traffic = number of categories * number of authors * number of works * number of views


A.The content category


The content category breadth coverage is the platform and the user joint effort.Red in the content of the construction has always maintained a tolerant attitude that you can see from its slogan.As long as it does not step on the high-voltage line category can let its growth.For valuable products, resources will be invested as positive catalysts to make the rapid reaction a flow point.Content categories interact with each other in three dimensions, and the corresponding growth plans of categories with different dimensions weights are different.


B.The author


The platform also has clear classification for user operation.


User hierarchy is divided according to the production and transmission capacity of value. Social identity and platform identity are highly coincident in this analysis perspective.The breadth and depth of their influence determines the value of the platform


How strong is the carrying ability of star users?for example,Fan bingbing used to grow grass for her people, which led to a global shortage of goods that she could not even buy herself.The hidden value and profit dawn behind this, let platform excitement be hard to restrain.


The value of KOL is to connect the past and the future. In addition to the role of planting grass, they also build the foundation for the atmosphere of the content platform.KOL with similar category attributes do mutual drainage, so that ordinary users who follow can stay in the scene they create and become high-quality traffic.


C.Works & views


The work is the final output of the content of Xiaohong shu platform, as well as the carrier of diversified value combination output, and it is also an important component factor of the author.Views mean exposure.The positioning of Red makes its exposure channels have infinite possibilities.


Valuable works and multi-channel exposure is a set of standard combination, so that the brand can gradually seize the user's mind, become the first choice of life search.


The model of Red is full of vitality and extensibility. It combines the entry point and user experience to create an excellent user operation case.



  • The current dilemma of Red


The founder of Red once said, "content is responsible for beauty, and e-commerce is responsible for making money to support the family.


A feature of a good closed-loop business, according to Domatters, is that the platform can handle the flow of the landscape.Failing to form a healthy business loop will end up being a failure in future business analysis.Although Red has formed the business closed loop, but the ideal plump and realistic bone sense, it did not establish an absolute advantage, and was heavily used as a promotion tool capital.


A.Flow construction cost is too high


Red management pressure from the cost is too high.If it does not find a way to cut costs without compromising results, it may end up being acquired cheaply or even out of the market.


B.Profitability is relatively weak and ROL is low.


Platforms spend a lot of money to build traffic, but don't have good monetization conversion rates, which is a more dire dilemma.In the final analysis, the reason for the inefficient transformation is that the profitability is not strong enough.


Why are there alternatives?The high operating costs of Red itself need wealthy donors to pay for the flow of money.When the offer price is above the market threshold, the psychology of looking for alternative solutions naturally arises.


Stakeholder profit space is small that is the author that points to output content specifically.Hard work for a low return in the end,it also have a plan natural.This is an objective competitor. As long as e-commerce platforms can get profits from the diversion of value production chain, there will be people doing such businesses.


The above content USES three "natural", because for the market that is like a written story that the development of every day is clearly arranged, but the character of little red book does not accept the fate.


C.Trust endorsement to be built


Credibility and authenticity are problems that every e-commerce platform must face and solve.Red has played some let users moved to let the gold owner laugh business rules, such as: "the lowest price in the whole network."A lot of money advocate express very regrettable to this, the platform does not make money, but they still want to make money.So the end result is low brand engagement.And this gave many false and inferior brand business opportunity to be able to infiltrate among them.Cracking down on counterfeit and shoddy products is a persistent and costly risk control investment, which has become one of the straws on the camel's back.


The rule of thumb for Domatters is that high operating costs create not only flow depressions but operating pressures.In addition, the liquidity is not mature to make ends meet, as well as the construction of credit endorsement, these points are the current dilemma of little red book.


  • What is the best way to break the bureau?


Red has experienced the development process of pure content-main e-commerce and content e-commerce, and I believe that it has explored many directions, but ultimately it has not seen the road to success.When it comes to content alone, it is the stage of traffic acquisition. This process is successful, and one of the important reasons is that content is free for users.Then, when doing e-commerce, it is the stage of trying to realize the realization. This process is estimated to be impossible, because the basic cost of building e-commerce platform is difficult to cover.


Now we can try the "TT" model to do content e-commercemode that is content should be bigger and bigger and become an indispensable media channel as well as e-commerce to do deep do, be sure to do GMV, ROI in the breakthrough trading platform.But getting there will cost far more than anyone imagined.


From the perspective of Red, the reason why it is difficult to break the situation is because of the complex commercial nature of the platform.It wants to do both content and e-commerce.The two are easier divided than joined.It's hard to lay a whole nation on your own.


The commercial nature of content is time-based, and users need to pay for time value.Platform helps users save time cost, and users need to pay the corresponding cost.The most common models are pay-for-knowledge and ad-viewing.


The business essence of e-commerce is transaction, and users need to pay for the value of goods.The platform helps users save transaction costs, but users also need to pay a price.It's just a matter of looking at the final trading residual split.


The content of little red book is free.In fact, the profit depends on advertising and e-commerce, as long as the nature of business is the same, then the competitors are the same.Content e-commerce is equal to an information symmetric trading platform, which is an ideal model that can be imagined.


Read more:

How do we help with KOL marketing in China?

Which platform of content should you choose in China in 2019?

How to launch an APP in China?

WeChat mini program:a new ecommerce channel in China


How do we help to creat your own website in China?

Fall in love with M&G again

The truth behind starbucks、ikea、Coca-Cola....Don’t you know?

Sell WeChat community, 0 budget to get 1000+ precision users!

 The story of drinking culture in China

Why do brands prefer to cooperate with platforms in influence marketing?

With WeChat SEO, newcomers can also lead traffic easily and increase the number of fans quickly


Leave a Comment