Recently, there have been reports that Xiaohongshu plans to go public in the United States around mid-2021, raising approximately US$500 million to US$1 billion, and its valuation after listing may exceed US$10 billion. However, Xiaohongshu has not yet given a clear response to the listing news. Previously, in 2018, Xiaohongshu announced the completion of a US$300 million Series D financing round. Among the investment institutions, the two giants Alibaba and Tencent were also among them. In fact, in the domestic Internet industry, it is rare to find a company that can obtain investment from both Alibaba and Tencent. As a social e-commerce platform with relatively high user activity in China, data shows that Xiaohongshu has approximately 138 million monthly active users and over 55 million daily active users. Compared with January 2020, monthly active users increased by more than 70% and daily active users increased by 100%. It is understood that Xiaohongshu has established a complete community information circle. The Xiaohongshu community includes information sharing on beauty, personal care, sports, travel, home, hotels, and restaurants, touching on many aspects of consumer experience and lifestyle. Xiaohongshu’s predecessor was a UGC application that focused on cross-border product sharing. Because it focuses on vertical fields, its user purity is high, it is easier to provide consumption scenarios, and it is also easier to enter e-commerce. Thanks to the traffic from UGC, by July 2019, the number of Xiaohongshu users had exceeded 300 million, forming a closed business loop from content community to cross-border import e-commerce. In the Internet age, traffic is everything. Many brand sellers also cooperate with internet celebrities and bloggers to drive traffic on Xiaohongshu to increase conversion rates. It is reported that Perfect Diary is a typical example of quickly gaining brand awareness through Xiaohongshu marketing, thereby accelerating the pace of listing. In recent years, with the layout of e-commerce platforms such as Alibaba and JD.com into the cross-border market, and the rise of vertical cross-border e-commerce companies such as NetEase Kaola and Miaya, the cross-border e-commerce market has quickly become a red ocean. So, facing the strong squeeze from big players in the cross-border market, how can other e-commerce platforms break through? After Xiaohongshu has gone through the development process from pure content to main e-commerce to content e-commerce, can traffic still be its main feature? Cross-border e-commerce market Little Red Book |
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