Social commerce unicorn Xiaohongshu wants to monetize by driving revenues for its content creators

The platform will roll out a content creator center, and promises incomes of about USD 1,400 per month for its trendsetters.

Photo credit: KrASIA

Shanghai-based social commerce startup Xiaohongshu (Little Red Book) has announced that it will roll out a content creator center and it will test run a brand cooperation platform, a product recommendation function, and a live streaming platform, to help trendsetters improve efficiency and better monetize their influence, according to the company’s official WeChat account.

Alibaba-backed Xiaohongshu, which was set up six years ago to provide shopping tips for Chinese outbound tourists, has turned into an online social content and e-commerce platform with 300 million total users and 100 million monthly active users (MAUs) by July, according to its website.

More than 3 billion texts or video “diaries” containing viewpoints on various products, including cosmetics and clothing, have been shared and exposed on Xiaohongshu every day, according to its WeChat.

The new creator center will provide a slew of instruments, such as a fans analytics tool and a comment management tool, and will also roll out a paid marketing service called Chips, allowing creators to place their diaries to a targeted group of people, said Jie Si, Xiaohongshu’s head of content generation segment, during  the company’s open day for creators in Beijing on Thursday.

The center will first be available to creators who have acquired more than 5,000 followers and have generated more than 10 diaries with over 2,000 views each, Jie added.

The brand cooperation platform which will undergo test run soon, will enable brand owners to book and pay creators for displaying their brands as advertisements online, said Jie.

A similar brand platform is already active on Xiaohongshu with more than 10,000 brands, but the company does not charge a commission fee to these companies, Chinese media outlet Caixin reported, adding that the firm will start getting a cut of revenues with an upcoming online transaction feature.

The product recommendation platform will allow users to view goods and buy them with a simple click, while it will also enable creators to gain a commission fee.

The live streaming platform will provide a new way for influencers to interact with their followers. Xiaohongshu has actually started to test run this feature as early as June, allowing select streamers to sell goods directly through live promotions, KrASIA reported.

Jie said that his company wants to help more than 100,000 creators gain over 10,000 fans, and assist 10% of these creators in earning a monthly income of about RMB 10,000 (USD 1,421). If these aims are achieved, Xiaohongshu could be able to reach a better financial position.

The firm has been valued at more than USD 3 billion after its Series D round led by Alibaba in June 2018. However, it faced a setback when its app was prevented from distribution between early August and late October.

The company launched a comprehensive investigation and self-correction of its content on the platform, in a move to “actively cooperate with relevant departments to optimize and improve the cyberspace”. However, its high growth has been affected.

Xiaohongshu said it has gathered more than 100 million MAUs in July, but when the creator’s open-day event was held on Thursday, the firm did not provide updated data, maintaining the same previously announced numbers.

All the new measures show the company’s intentions to retain its current users by helping them driving revenues, while the firm is also looking to speed up its strategy to monetize its existing user pool.