Essay2 XIANG Lushan（1155219824）: Xiaohongshu 2.0——A Closed-Loop Ecosystem

     In recent years, the rise of social commerce has completely transformed the way consumers interact with brands and make purchasing decisions. Xiaohongshu has successfully created a seamless closed-loop ecosystem that tightly integrates content sharing with e-commerce, converting social interactions into commercial outcomes. Currently, this ecosystem has evolved into its 2.0 version.

Firstly, Xiaohongshu seamlessly combines content seeding (product recommendations through user-generated content or KOL posts in text or video formats) with live-streaming sales. By integrating content and live-streaming platforms, it enables transactions across multiple domains, forming an integrated process from "seeding" to "conversion." Xiaohongshu has invited many celebrities to become brand owners or product endorsers. Through their fan base and influence, these celebrities endorse brands and directly drive sales through live-streaming interactions. For example, Dong Jie's live-streaming session achieved a GMV (Gross Merchandise Value) of 60 million RMB through pre-event promotions and embedded product links during the broadcast. The subsequent secondary dissemination of content on social media further amplified its impact. This model combines the long-term influence of celebrity seeding with the immediacy of live-streaming sales, achieving both content promotion and sales conversion. Celebrities, as Key Opinion Sellers (KOS), are not only product endorsers but also conveyors of brand value. Their personal charisma and professional taste become key factors in attracting users, turning their fan base into brand consumers.

Secondly, Xiaohongshu has fully implemented the KBFS integrated marketing strategy, with high-quality content at its core. Through scientific traffic distribution and advertising strategies, it helps brands efficiently achieve closed-loop seeding and conversion goals. The strategy includes four core modules: KOL, Brand Advertising, Feeds, and Search. Through influencer-driven content seeding (KOL), precise brand promotion (Brand Advertising), interest-targeted traffic engagement (Feeds), and search optimization (Search), it comprehensively covers the user's Awareness, Interest, Purchase, and Loyalty (AIPL) journey. Over 10,000 influencers create curated content to engage audiences. For example, the PMPM skincare campaign stood out in a competitive market through detailed product reviews and lifestyle storytelling. In this model, Xiaohongshu's full-link marketing resources and strategies have also built a powerful mechanism for event-driven traffic and momentum, including event topic pages, event splash screens, information flow ads, hot topic campaigns, and surprise boxes. These methods, combined with big data analysis, professional generated content (PGC), multi-dimensional influencer seeding, and task-based strategies, help brands accurately reach their target users, enhancing event exposure and engagement.

At the same time, Xiaohongshu has integrated with Alibaba to create a complete closed-loop conversion pathway using tools such as “Xiaohongxing,” “Pugongying,” and “Databank.” This integration enables full-process visualization and management from seeding to purchase. By tracking consumers' paths from Xiaohongshu to Taobao purchases, brands can evaluate the effectiveness and costs of each step, optimizing their strategies accordingly. With the help of Alibaba's “Star Tasks” and Xiaohongshu's “Pugongying” backend, ad performance and cost efficiency are monitored in real-time, with dynamic adjustments to ad content, timing, and audience targeting based on Taobao’s store conversion results (such as add-to-cart and checkout). Xiaohongshu's DMP platform collects and analyzes user behavior data, generating precise user profiles that help brands better understand consumer preferences. Through Alibaba's Databank, brands can leverage this conversion data for precise remarketing, attracting similar potential consumers and improving purchase conversion. Key nodes in the conversion process, such as KOL and UGC content seeding, SPU product links, and user actions like following and adding to the cart, all play critical roles in driving conversions. Overall, this data-driven closed-loop marketing model not only enhances conversion rates but also provides long-term marketing value for brands, achieving the synergistic effect of "content + e-commerce."

    With multi-faceted efforts, Xiaohongshu, through this closed-loop business model from seeding to purchase, has driven the platform's new ecosystem upgrade and successfully led the new direction of social commerce developm