Core Viewpoint - Xiaohongshu has successfully positioned itself in the e-commerce market by leveraging trust and community engagement, allowing it to thrive despite being a latecomer in a saturated market [2][3][21]. Group 1: E-commerce Strategy - Xiaohongshu upgraded its app to include a dedicated e-commerce section, attracting major brands like Apple and DJI, which indicates its growing influence in the e-commerce space [2][3]. - During this year's Double Eleven shopping festival, the number of merchants achieving over 10 million in sales on Xiaohongshu increased by 2.4 times compared to last year, showcasing significant growth [3]. - The platform has seen remarkable sales from native brands, with some achieving over 100 million in monthly sales, demonstrating its ability to cultivate successful brands [3]. Group 2: Consumer Behavior and Trust - In a market characterized by oversupply, consumers face an overwhelming number of choices, making trust a critical factor in their purchasing decisions [5][6]. - Xiaohongshu builds trust through genuine product offerings and community engagement, which is essential for attracting consumers who are wary of being misled [6][8]. - The platform's community-driven approach allows for effective supervision of sellers, ensuring that consumers can verify claims made by merchants, thus enhancing trust [11][12]. Group 3: Mechanisms of Trust - Trust on Xiaohongshu is established through high product quality, effective supervision, and significant consequences for breaches of trust, which collectively create a robust environment for consumer confidence [17][14]. - The platform's unique structure allows for real-time feedback and oversight from a large user base, which acts as a deterrent against dishonest practices [12][14]. - Xiaohongshu's community dynamics mean that negative experiences are quickly shared, raising the stakes for sellers and increasing the cost of non-compliance [14][19]. Group 4: Market Positioning - Xiaohongshu's ability to thrive in a competitive market is attributed to its focus on building trust rather than merely competing on price, which is a departure from traditional e-commerce strategies [21]. - The platform has created a consumer environment where purchasing decisions are made based on trust and personal connections rather than just product features or pricing [19][21]. - Xiaohongshu's model demonstrates that in an oversaturated market, establishing trust can be a more effective strategy than competing on the number of choices available [21].