The closure of Xiaolvzhou has taught a lesson to Xiaohongshu's e-commerce, with only eight products selling over a thousand units a year

Recently, Xiaohongshu's outdoor e-commerce platform "Xiaolvzhou" issued a farewell letter to users, announcing that it will cease operations and product sales on October 1, 2023, and officially close on October 31.

Although Xiaohongshu has 369000 followers on its Xiaooasis store homepage and has sold a total of 89000 units, based on specific sales data, only 8 products in all categories have accumulated sales exceeding 1000 through search sales ranking.

This low-key farewell letter contrasts sharply with the recent high-profile announcement of the platform's e-commerce determination at the buyer conference, and has also caused quite a stir in the industry. Is the outdoor camping market sluggish, or is Xiaohongshu unable to do vertical self operated e-commerce? The closure of Xiaooasis may have prompted Xiaohongshu's thinking.

The platform has chosen to remain silent to the outside world, and there has been no response beyond the open letter.

Zhang Yi, CEO of iMedia Consulting, believes that the mainstream group of outdoor camping consumers is accustomed to large e-commerce platforms, and consumer behavior is difficult to change on one hand. Objectively speaking, Xiaohongshu also lacks experience in laying out outdoor camping products. In addition, although the outdoor camping market is still hot, the consumption of equipment will not continue.

Only eight products have sold over a thousand units

Xiaolvzhou was launched in early 2022, initially focusing on beauty, skincare, fashionable home furnishings, etc. However, it quickly changed its product positioning in March 2022, focusing on outdoor activity brands such as camping, cycling, camping, skiing, surfing, etc. Most of them are niche or high-end brands. Xiaohongshu hopes to gather the most cutting-edge fashion brands through "professional buyers carefully selecting".

In the farewell letter, Xiaooasis summarized the failure as "failure to achieve the expected goal of maximizing the satisfaction of everyone's outdoor needs in the process of business exploration and development.".

From the specific sales data, as of now, among all categories of products displayed on the interface, only 8 products have achieved sales exceeding 1000 through sales ranking search, which is the cumulative data since their launch. Among them, the best-selling one is a camping light priced at 109 yuan, which is a brand exclusive product with a purchase quantity of 5072 pieces; Ranked second is the camping water cup priced at 194 yuan, with a purchase quantity of 1648 pieces. At the same brand's Tmall flagship store, this camping water cup product has a higher price, but it shows that it has been sold for over 4000 yuan in a year.

Of course, there is a gap in the number of users between Xiaohongshu itself and Tmall. The camping cart with the best sales data on Xiaooasis has a cumulative sales of 228 pieces, while on Tmall, the annual sales of camping carts from the same high-end brand are over 500, and other popular brands can reach up to 100000+.

From the perspective of product selection and pricing, Xiaooasis has made differentiated attempts, including choosing brands that lean towards mid to high end and setting preferential prices, or establishing exclusive sales channels through brand exclusive products. However, in terms of sales volume, its volume cannot support long-term operations.

Zhang Yi told First Financial that for consumers, homogeneous products will definitely choose familiar platforms to purchase, while camping consumer groups have more family combinations, and family decision-makers are mostly old customers on platforms such as Taobao, Tmall, and JD.com. It is difficult to change their consumption habits.

Zhang Bing previously worked in the camping industry and is currently engaged in e-commerce. He believes that the problem with Xiaooasis is that Xiaohongshu itself does not have e-commerce genes, and the outdoor industry also involves a certain degree of professionalism. "At present, the products in the outdoor industry are almost the same and there is no innovation. The Xiaohongshu platform belongs to the sharing type, and if the products themselves are not differentiated, it is difficult to attract consumer attention."

After operating for more than half a year, Xiaohongshu attempted to switch to more positions. At the end of October 2022, Little Oasis settled in the WeChat app mall and posted its first article on the WeChat official account. Since then, it has been updated several times a month. However, most of the articles read less than 300. Consumer groups have not been accustomed to making decisions and consuming in the small app mall.

From February 3 of this year, Xiaolvzhou WeChat official account will not be updated. As of now, all products in the Xiaolvzhou WeChat Mini Program Mall are displayed as sold out and cannot be purchased.

The general expectation of the market is that after experiencing the outdoor camping boom from 2021 to 2022, the market will return to rationality in 2023.

However, based on the data, the camping craze has not completely subsided yet. According to data from iiMedia Research, the core market size of China's camping economy reached 113.47 billion yuan in 2022, a year-on-year increase of 51.8%. It is expected that the core market size of China's camping economy will rise to 248.32 billion yuan in 2025, driving the market size to reach 144.028 billion yuan. Zhang Yi found that based on the nationwide monitoring by the AI media consulting team, "especially in the first half of the year, the overall trend of camping was even more explosive than during the epidemic period.".

The small oasis has not grasped the dividends of development.

According to the semi annual report of the leading outdoor camping enterprise Mugaodi, the domestic brand business is still growing. In the first half of 2023, Mugaodi achieved a revenue of 860 million yuan, a year-on-year decrease of 0.84%, and a net profit of 97 million yuan, a year-on-year decrease of 14.28%. The main source of contraction is the OEM/ODM contract manufacturing business in foreign markets, a year-on-year decrease of 16.54%. However, the domestic independent brand business of Mugao Di achieved a revenue of 428 million yuan, a year-on-year increase of 23.59%.

The financial report of Pathfinder for the first half of 2023 shows that the operating income during the reporting period was 556 million yuan, a year-on-year increase of 19.54%; The net profit after deduction was 12.9105 million yuan, a year-on-year increase of 230.41%. Among them, the outdoor products business achieved a revenue of 540 million yuan, an increase of 17.8% compared to the same period last year.

Zhang Bing told First Financial that the overall outdoor industry has not declined, but has only evolved into niche markets. For example, in the early days, the sky curtains were all in solid color, but now they are launching IP series and style series. His judgment is that the outdoor industry will continue to rise in at least 2-3 years. Previously, outdoor camping was mostly concentrated in first and second tier cities, and in recent years, it has also become popular in third and fourth tier cities.

However, there are special aspects to the equipment consumption in the camping market. Zhang Yi stated that normal camping equipment can last for two to three years. Therefore, after the peak purchase period of the first two years, this year's camping equipment is generally weaker than last year and the year before. This is not because camping is not popular, but because the existing camping equipment of consumers has not yet been phased out, and the growth rate will also slow down compared to the explosive period.

"For manufacturers of camping equipment, it is necessary to accelerate updates and iterations, just like mobile phones. Next year, new models will definitely be launched, allowing consumers to constantly keep up with the trend, so as to form new consumption." From the market monitoring situation, Zhang Yi found that camping equipment is one of the problems, which is that "more people eat old roots, less innovation". ".

Where is Xiaohongshu's e-commerce going?

At the recent buyer conference, Xiaohongshu COO Conan stated that individuals such as Xiaohongshu buyers and managers have become the most dynamic force in Xiaohongshu's e-commerce. In the past year and a half, the scale of buyers and managers on the platform has increased by 27 times, the number of active sellers has increased by 10 times, and the number of purchasing users has increased by 12 times.

The small oasis was unable to achieve such growth. Although the small oasis is carefully selected by professional buyers, what is presented to consumers is still an official self operated e-commerce sector, and the value of buyers has not been highlighted. Compared to others, Xiaohongshu is currently promoting a buyer model aimed at activating more bloggers who have already cultivated a core fan base on Xiaohongshu. Through their personalized sales, explanations, and recommendations, they aim to impress fans.

In 2023, Dong Jie became the "first sister" of Xiaohongshu's live streaming sales with a GMV of 73 million. Subsequently, Zhang Xiaohui, known as the first generation internet celebrity, also achieved sales of over 50 million on Xiaohongshu's first broadcast. Industry insiders have stated that these two female characters are actually very in line with the tone of Xiaohongshu. They are not popular celebrities, have certain life experiences, and have their own unique tastes. Among the female community, their personalized sales are more recognized.

The model of Xiaooasis did not lead to such successful cases, but perhaps it has accumulated some experience for the commercialization of Xiaohongshu.

Once the buyer is activated, it can drive more merchants to actively enter, and many brands have shown interest in Xiaohongshu e-commerce after Dong Jie and Zhang Xiaohui's live streaming became popular. It is precisely because of this opportunity that the theme of Xiaohongshu's e-commerce conference has been set as "The era of buyers has arrived". The platform hopes to attract more bloggers to participate and attract more merchants, and has announced exposure traffic support for buyers and merchants totaling billions.

From the user behavior monitored by iMedia Consulting, it can be seen that the main target audience of Xiaohongshu is young women, which is an opportunity for Xiaohongshu to cultivate e-commerce. Zhang Yi believes that "the era of e-commerce 1.0 was the era of Ali, Jingdong and Pinduoduo. The merchants who failed to catch up with the dividend later caught up with the 2.0, that is, Tiktok and other live e-commerce. The merchants who failed to catch up with both will consider the third."

Zhang Yi believes that Xiaohongshu should not compete with mainstream platforms for users in e-commerce, but should cultivate the new generation, that is, the post-00s group. "These groups are not loyal to Taobao, Tmall, JD and even Tiktok, or have not formed the habit of loyalty. If Xiaohongshu can cultivate the consumption habits of e-commerce in this group at this time, it may be a good start."

Zhang Bing concluded that the Taoshi brand occupies the minds of consumers, while JD has the logistics advantage and Pinduoduo has the low price advantage. Tiktok belongs to the pan entertainment e-commerce, while the current Xiaohongshu e-commerce is facing sophisticated young groups, each with its own advantages and disadvantages. He believes that "Xiaohongshu has its own audience, but at the current stage, it seems to be focusing on marketing, resulting in a shortage of products. In the later stage, it should focus on the supply chain. Looking at other e-commerce platforms, they are all optimizing their own supply chain." In the eyes of e-commerce professionals, "product is king" is very important.