Core Insights - The article discusses the launch of a "Million Commission-Free Plan" by Xiaohongshu to attract more merchants and accelerate business expansion, offering commission-free transactions up to 1 million yuan from September 1, 2025, to August 31, 2026, while only retaining a 0.6% payment channel cost [1][3]. Group 1: Commission Structure - Previously, Xiaohongshu's commission rates varied by category, generally ranging from 2% to 5%, with specific rates of 5% for women's clothing, personal care, and pet categories, 4% for beauty products, and 2% for fresh produce [3]. - Under the new plan, multiple stores under the same merchant can share the 1 million yuan incentive, and if the original category rate is below 0.6%, the original rate will apply; any amount exceeding 1 million yuan will revert to the original rate [3]. Group 2: Business Strategy - Xiaohongshu aims to enhance its advertising revenue by attracting more merchants to generate transactions, as merchants are more likely to invest in advertising for increased traffic [3]. - The company has been accelerating its commercialization efforts throughout the year, including recruiting e-commerce operation service providers and upgrading merchant settlement periods to improve cash flow efficiency [4]. Group 3: Competitive Landscape - Other e-commerce platforms like Taobao, JD.com, and Meituan are also implementing favorable policies to attract merchants, with Taobao launching a 500 billion yuan subsidy plan and JD.com offering commission-free policies for new merchants in specific categories [4]. - Douyin is also planning to implement commission-free measures in live streaming and short video scenarios, expanding its coverage to various product categories [5][6].

Group 1 - The core point of the news is the launch of the "Million Commission-Free Plan" by Xiaohongshu E-commerce, aimed at reducing operational costs for merchants and encouraging more businesses to join the platform [1] - The plan allows the first 1 million yuan of transaction volume for the same merchant to be exempt from commission fees, only retaining a 0.6% payment channel cost, which simplifies the fee structure for merchants [1] - Previously, Xiaohongshu E-commerce had varying commission rates by category, typically ranging from 2% to 5%, but this new plan standardizes the rate for the first 1 million yuan [1] Group 2 - The "Million Commission-Free Plan" has minimal entry barriers, with automatic commission deductions during service fee settlements, requiring no application from merchants [1] - In addition to this plan, Xiaohongshu E-commerce has implemented various measures throughout the year to lower operational difficulties and costs for merchants, including the recruitment of e-commerce operation service providers and upgrades to merchant settlement periods [2]

Core Insights - Xiaohongshu aims to unify its internal organization to focus on monetization efforts, particularly through e-commerce and advertising [4][5][14] - The recent high-profile collaboration with influencer Zhao Lusi has significantly boosted Xiaohongshu's traffic and user engagement [1][4] - Xiaohongshu has restructured its commercial operations by merging its e-commerce and advertising departments into a new large commercial division [5][10] E-commerce Development - Xiaohongshu's e-commerce is gaining traction, with users making direct purchases from the platform rather than being redirected to other sites [4][11] - The platform's gross merchandise volume (GMV) is projected to reach approximately 400 billion RMB in 2024, which is significantly lower than competitors like Douyin and Kuaishou [9][10] - The establishment of an independent e-commerce department in August 2023 aims to enhance operational efficiency and align with community and commercial departments [10][12] Advertising Strategy - Xiaohongshu's advertising growth potential is considered greater than its e-commerce, with over 94% of consumers influenced by content before making purchases [12][13] - The platform has opened external links to major e-commerce sites like Taobao and JD.com, allowing users to transition from content to purchase seamlessly [7][11] - The integration of advertising and e-commerce functions is expected to improve monetization efficiency for brands [20][25] Competitive Landscape - Xiaohongshu is compared to Douyin and Kuaishou, which have successfully integrated advertising and e-commerce, creating a synergistic effect [9][26] - The platform faces challenges in establishing a clear conversion chain for brands, which may lead them to prefer more established platforms like Taobao and Douyin for advertising [15][17] - The experiences of Kuaishou and Bilibili serve as valuable lessons for Xiaohongshu in navigating community engagement and monetization strategies [26][39]

Core Viewpoint - Xiaohongshu is at a crossroads, needing to decide between relying on offshore supply chains or achieving a complete closed-loop system for its e-commerce operations [1][28]. Group 1: E-commerce Strategy - There is significant public interest in whether Xiaohongshu will abandon its e-commerce business in favor of promoting products from platforms like Taobao and JD [2][3]. - Xiaohongshu has recently re-opened external links to Taobao, allowing users to directly access products from Xiaohongshu's content, which is seen as a strategic move to enhance its e-commerce capabilities [5][6]. - The platform has previously experimented with external links but reverted to a closed-loop system due to poor user experience [8][19]. Group 2: Internal and External Link Dynamics - Xiaohongshu has introduced a "blue link" feature that allows users to share product links in comments, facilitating direct purchases without affecting the distribution of original content [11][13]. - Despite the introduction of the blue link feature, its effectiveness has been questioned, as it relies heavily on viral content for visibility [13][15]. - The recent changes indicate a significant shift in Xiaohongshu's approach to e-commerce, moving towards a more open and integrated model [16][20]. Group 3: Market Position and Competition - Xiaohongshu's e-commerce ecosystem is no longer a fully closed system, which may impact its ability to attract and retain merchants [20][21]. - The platform's advertising and e-commerce strategies are evolving, with a focus on integrating community-driven content with commercial objectives [23][24]. - The competitive landscape is shifting, with Xiaohongshu needing to enhance its infrastructure to support a broader range of merchants and products [31][32]. Group 4: Future Outlook - The success of Xiaohongshu's e-commerce strategy will depend on its ability to balance community engagement with commercial interests, as well as its capacity to attract larger merchants [28][30]. - The platform faces challenges in maintaining its unique community identity while expanding its e-commerce capabilities [33].

Core Insights - Xiaohongshu is undergoing organizational restructuring in its e-commerce division, shifting the focus from a standalone buying team to better serve merchants, indicating a strategic pivot in its business model [1][3] - The integration of buying and merchant operations reflects a broader trend in Xiaohongshu's e-commerce strategy, moving towards a merchant-centric approach rather than solely relying on buyers [3][5] - The transition from a buyer-centric model to a lifestyle e-commerce concept suggests an effort to enhance the platform's commercial viability and address challenges faced by the buying model [5][7] Summary by Sections Organizational Changes - Xiaohongshu's e-commerce division is restructuring, with the buying operations now integrated into the merchant operations team, aiming to improve service for merchants [1] - This change does not signify a complete abandonment of the buying model, as it remains a method for merchants to sell products [1] Historical Context - The shift towards integrating buying and merchant operations has been in progress since early 2024, with initiatives during the 618 shopping festival aimed at providing traffic incentives for all merchants [3] - The introduction of the lifestyle e-commerce concept marks a significant evolution in Xiaohongshu's approach, moving beyond the initial focus on buyers [3][5] Market Dynamics - The buying model, while initially promising, faces challenges such as selection errors and false advertising, leading to a cooling attitude towards influencer-driven sales across the e-commerce industry [5] - Xiaohongshu's buying model struggles with scalability, as replicating successful influencers is difficult due to the unique skills and market presence required [5][7] Product Focus - The buying model is more suited for niche, non-standard products that emphasize experience and personal branding, but these products often come with higher supply chain challenges [7] - Xiaohongshu's initial choice to focus on buying was partly due to its weaker supply chain capabilities compared to major competitors like Taobao and JD.com [7] Strategic Implications - The evolution from a buying-centric model to a lifestyle e-commerce framework indicates a strategic effort to broaden participation in the e-commerce ecosystem, involving merchants and operators with stronger operational capabilities [7]