Reporter Xie Zhiguo and intern reporter Bai Lulu report
On January 10, Xiaohongshu released two governance results announcements.
Among them, the "Results of Qinglang·Special Rectification of Internet User Account Operation Chaos" shows that this rectification dealt with a total of 51 "reincarnation" accounts, more than 60,000 accounts with illegal user names, more than 7 million "zombie fans", 517 malicious marketing accounts, and 41 illegal accounts that rented and sold online game accounts to minors. The "Panda" Plan 2021 Annual Governance Announcement" shows that last year, Xiaohongshu managed a total of 535,016 fake notes and handled 124,873 fake accounts, including 100,729 fake accounts, covering 502 brands.
This is the result of the third and fourth batch of content ecological rectification actions released by Xiaohongshu since the beginning of this year.
Although Xiaohongshu frequently publishes rectification results, it turns out that this kind of "clean-up rectification" only treats the symptoms but not the root cause for the top content community. The content ecology of the platform is still worrying. Equally worrying is the commercialization process of Xiaohongshu. Judging from its revenue sources in 2020, Xiaohongshu mainly relies on advertising and e-commerce. Among them, advertising accounts for 80%, while e-commerce accounts for 20%.
In addition, Xiaohongshu reduced its holdings in Shanghai Moody E-Commerce Co., Ltd. (hereinafter referred to as: Moody), but began to enter the toy field, investing in the domestic building block toy brand Coincidence Mortise and Tenon, and holding 21% of the shares.
The reporter wrote to Xiaohongshu regarding content ecology, investment and company development. As of press time, no reply has been received.
The number of illegal accounts is staggering, and there are hidden concerns about the content ecology
In 2020, there were more than 40 million Xiaohongshu content sharers, the number of notes published throughout the year increased by more than 150% year-on-year, and the community brought together nearly 80,000 brands from more than 230 countries and regions around the world. As of August 2021, Xiaohongshu has approximately 160 million monthly active users, an increase of 97% from January 2020.
Xiaohongshu’s excellent grass-growing capabilities, strong community stickiness and growing number of users have made it the leading grass-growing platform in the country and favored by capital. On November 8, 2021, Xiaohongshu completed a new round of financing of US$500 million. For this round of financing, Temasek and Tencent led the investment, and old shareholders such as Alibaba, Tiantu Investment, and Origin Capital also participated in the investment. After receiving the investment, Xiaohongshu is valued at US$20 billion.
It is worth noting that behind the high valuation of Xiaohongshu, there are not only the pursuit of capital but also hidden problems such as false advertising, pornography, and showing off wealth. Recently, Xiaohongshu, a content community with a valuation of US$20 billion, has been involved in a scandal over showing off its wealth, and has been thrust into the forefront of public opinion.
On January 6, a group of online conversations showed that someone took a screenshot of a photo posted by a blogger with the account name "Ingird" on Xiaohongshu. The blogger posted that he worked at a securities firm, with a total income of 2.24 million in 2021, and the amount of tax he needed to pay was 620,000. In the month with the lowest income of the whole year, his salary was more than 60,000 yuan. Currently, the account has been deleted.
This is not the first time Xiaohongshu has dealt with the issue of showing off wealth. As early as November 18, 2021, Xiaohongshu carried out a special crackdown on showing off wealth and announced the results of the crackdown on the WeChat official account. From May to October 2021, the platform processed 8,787 illegal notes related to showing off wealth and punished 240 accounts. As of January 10, 2022, there were 6,796 complaints involving Xiaohongshu on the Black Cat Complaint Platform, mainly involving issues such as false propaganda and malicious review failure.
As the leading domestic content community and grass-growing platform, Xiaohongshu has been troubled by its content ecological issues.
In September 2021, Xiaohongshu was accused of disrespecting women because of an advertisement placed on Hupu. Among them, the slogan "There are so many beauties in Xiaohongshu, you can read them for free without paying any money" and the pictures of women that seemed to be sexually suggestive made many netizens angry. Female users have always been the main users of Xiaohongshu. As of the beginning of 2021, female users account for as high as 90.41%. This kind of advertising that objectifies women has caused Xiaohongshu to lose the trust of its main users.
In October of the same year, Xiaohongshu was once again involved in a public controversy because of its filter attractions. The following December, Xiaohongshu was exposed to push sexually suggestive videos to minors. At the same time, the problem of false content on the Xiaohongshu platform also forced it to survive by cutting off its arms and carrying out the first batch of false content management, banning 29 brands at one time.
On January 5 this year, Xiaohongshu launched the second batch of false content management, banning 39 consumer brands, offline institutions and merchants suspected of false marketing, and appeared on hot searches.
On January 10, Xiaohongshu released the “Results of Qinglang Special Rectification of Internet User Account Operation Chaos”. This rectification operation mainly carries out self-examination and cleanup work on five types of account operation chaos on the platform, including "reincarnation" accounts, illegal name information, fake fans of Internet celebrities, malicious marketing accounts, and selling online game accounts to minors.
In this rectification, Xiaohongshu disposed of a total of 51 "reincarnation" accounts. There are more than 60,000 accounts with illegal name information. A total of more than 10,000 accounts related to abnormal increase in followers and false follower counts were cleared, and more than 7 million "zombie followers" were cleared. There were 517 malicious marketing illegal accounts. There are 41 illegal accounts in the game account risk service category.
Regarding the results of the rectification, some users said that they were misjudged for violations and filed a complaint. The problem was solved but the notes were not restored. Some users said that they have made rectifications but their accounts still show serious violations and want to know what aspects still need to be rectified.
From content communities to community e-commerce, the commercialization process still needs to be accelerated
Public information shows that Xiaohongshu is a lifestyle platform for young people, with the mission of "Inspire Lives, sharing and discovering the wonders of the world". It was founded in Shanghai in 2013 by Mao Wenchao and Qu Fang. Users can share their lifestyles on the platform, interact based on interests, and record every detail of their lives through short videos, pictures, and texts. As of October 2019, the number of monthly active users of Xiaohongshu has exceeded 100 million. 70% of its users are born in the 1990s and continue to grow rapidly.
At the end of 2013, the official app of Xiaohongshu Shopping Notes was officially launched. It mainly focuses on sharing overseas shopping experience; the specific content is shared and created by users; the format uses a picture with three tags: price, source, and brand.
Xiaohongshu, with its simple form and intuitive content, was deeply loved by the public. During the following Spring Festival, its number of users increased sevenfold without spending a penny on promotion fees.
In 2014, the launch of the "Welfare Club" allowed Xiaohongshu to realize the integrated process from "planting grass" to "pulling grass", breaking the original embarrassing situation of "you can only shop but not buy".
During the anniversary celebration on June 6, 2015, Xiaohongshu APP ranked fourth on the Apple App Store list, with 15 million users. With the enhancement of Xiaohongshu's grass-growing capabilities, the increase in community stickiness and the increase in the number of users, Xiaohongshu began to further expand the market, launch its own products, create its own supply chain, and begin to enter the e-commerce field.
In 2015, Xiaohongshu’s first product to test e-commerce was the “Greek Amita Cleaning Liquid” personally selected by Mao Wenchao. By the 2016 Spring Festival, Xiaohongshu had more than 10,000 online products, 95% of which were sold out within 2 hours. At its peak, it even sold 200 million yuan in one hour.
The initial victory in the e-commerce market inspired Xiaohongshu to have greater ambitions, and began to expand its e-commerce territory and improve the e-commerce supply chain and operation chain. Its founder Mao Wenchao has established overseas warehouses in 29 countries, and has established bonded warehouses and stocking warehouses in domestic cities such as Zhengzhou, Shenzhen, and Shanghai. The original delivery cycle, which took up to one month, was reduced to 2 to 3 days.
However, according to data released by Dongxing Securities, in 2020, Xiaohongshu’s revenue mainly consisted of advertising and e-commerce. Among them, advertising revenue is 600-800 million U.S. dollars, accounting for about 80%; while e-commerce GMV is about 1 billion U.S. dollars, and its revenue proportion is about 15%-20%. From this point of view, Xiaohongshu relies heavily on advertising for revenue.
Xiaohongshu also realized this and began to enter the building block toy market. It invested in the domestic building block toy brand Mortise and Tenon, holding 21% of the shares.
It is also worth noting that as a grass planting platform, Xiaohongshu is also deeply troubled by false grass planting. This may affect the development of its commercial business.
On January 10, Xiaohongshu announced the annual governance announcement of last year’s “Panda” project. Last year, Xiaohongshu managed a total of 535,016 fake notes and 124,873 fake accounts, including 100,729 fake accounts, covering 502 brands.
Although the results of content rectification on Xiaohongshu are frequently released, judging from the actual situation in the past, these rectifications often address the symptoms rather than the root cause. The content ecology of Xiaohongshu is still worrying. Can the newly opened toy market become a new revenue growth point and change the strong reliance on advertising? Reporters will continue to pay attention.
