Chuan Hong Xiao Book Valuation Of Up To 6 Billion U.S. Dollars, Monthly Activity Has Exceeded Vip.Com

In a short period of a year, the 3 restructuring of the company has surpassed vip.com's Xiaohong book and is being sought after by capital.

According to TheInformation, people familiar with the matter said Xiao Hong is negotiating to raise $500 million, or the company's valuation is as high as $6 billion. According to sources, Xiao Hong's potential investors include Softbank's vision fund, Sequoia China and high leverage capital. Other information indicates that several US dollar funds have already given the letter of intent for investment.

It is noteworthy that the potential valuation will be two times that of the last round of financing in Xiaohong book. Although the transaction is not yet completed and the terms may still change, it also means that the platform with both community and e-commerce attributes is gradually being recognized by the capital market. In May last year, Xiaohong got more than $300 million from Alibaba, and its valuation exceeded $3 billion. In addition, Xiaohong got tens of millions of dollars in B round of financing in 2015, and was invested by GGV Ji Yuan capital, and then invested $100 million in Tencent in 2016.

After the news came out, the relevant leader of Xiaohong Book responded quickly, indicating that Xiaohong was developing rapidly, but the news was not true.

In an interview with China Entrepreneur Magazine earlier, Quong Fang co-founder Qu Fang stressed that the commercialization steps of Xiao Hong's book were just beginning, and the huge commercial potential was not excavated. "Now we are like a gold mine. Many people want to dig gold mines. This really poses great challenges for us, and we need to speed up our actions."

Xiao Hong is also known as "China's Instagram". It was founded in 2013 by Mao Wenchao and Qu Fang. It was originally positioned as Haitao shopping sharing platform. It aims to help users find "good things in the world". After that, it gradually attracts a large number of users to produce high-quality notes spontaneously, accumulates the first batch of users who have real cross-border shopping demand and forms a community atmosphere of heavy operation. In 2015, the monthly number of small red books started more than 50 times per person, and the single use time reached more than 130 minutes.

Driven by three factors, high viscosity, high activity and female users, Xiao Hong began to tilt to the electricity supplier and launched the first self operated cross-border e-commerce business "welfare agency" in the second years of its establishment. In order to be able to more flexibly manage the electricity supplier business, Xiao Hong chose the whole self run platform. The platform not only handled the selected products, procurement, customs and customer service, but also took two days to deal with hundreds of thousands of single bonded warehouses and two overseas warehouses.

In the selection of products, Xiao Hong uses the idea of explosive money, partly from the high commodity of the community, and the other part comes from the excavation of potential explosions. It also attracts the brand merchants, suppliers and agents to enter. However, for these upstream channels, the platform side lacks the ability to control, and the problem of mixed sale has always been a stumbling block.

In March 2018, Xiao Hong launched its own brand "bright REDelight". Its products include household products such as thermal insulation cups, pajamas and bedding. There are also a few kitchen utensils, such as ceramic knives, health kettles, soup pots, etc. It is reported that most of the suppliers of bright REDelight products are selected from the global purchasing experience, including domestic and foreign suppliers as well as big brands.

At the same time, the small red book team is also expanding. Last year, the total number of employees has reached 2000. In his letter to his employees, Xiao Hong emphasized that using products to influence the lifestyle of the new generation of young people is a constant beginning for the group.

However, in the face of the accelerated layout of Alibaba, NetEase koala and Wei pin international business tycoons in the field of Hai Tao, Xiao Hong has no advantages in terms of commodity prices, logistics and after-sales experience. According to the data from the Analysys, as of the fourth quarter of 2018, Xiao Hong ranked sixth in the cross-border import retail business market scale, accounting for only 3.7%.

Aware of the fact that the electricity supplier is not strong enough to compete with the giants, Xiao Hong's book suddenly reversed its focus on the content and community sector last year, and abolished 50% of the employees in the electricity sector. More than 10 of the divisions under the commodity category will also be reduced to single digits. Qu Fang emphasized more in public that Xiao Hong is a community rather than an electricity supplier.

The little red book, determined to reform, resolutely changed the slogan from "marking my life" to "finding the life you want", not only increasing the short video function, but also attracting a large number of 95 young consumers by inviting Ouyang, Nana, Fan Bingbing and other stars to set up account numbers, sponsoring "idol trainees" and "creating 101" and so on.

In the positive market environment, ritawang, Chen Baiyang and other bloggers, who grow with Xiaohong book, are also coming to the peak of commercialization. Tom Ford Beauty, La Mer and other high-end skin care and beauty cosmetics brands have launched many advertisements on the platform. The world's largest luxury brand Louis Vuitton has also entered the Xiaohong book and opened its first official brand number because of the need to screen advertisements.

According to the latest data of fashion business express, the monthly active user volume of Xiao Hong book has exceeded 85 million, which is nearly 3 times a year ago, the total number of users is 250 million, and the daily exposure of community notes is more than 3 billion times, of which 70% of the exposure is UGC (user production content). After 90 and 95, it has become the mainstream user of the community.

However, some analysts pointed out that as the driving engine of the electricity supplier business, the nature of the real community decided that Xiao Hong book could not direct the purchase of content directly, just like other electronic business platforms. Therefore, the problem that Xiao Hong book should consider now is how to support its valuation of up to US $6 billion.

According to fashion business data, after half a year after landing on the New York stock exchange, mogujie.com's market capitalization has also shrunk by nearly 80% to $300 million from the initial $1 billion 500 million. Known as China's "net red first stock", such as Han holdings listed only three months, the cumulative decline in market capitalization has more than 70%, from the initial 1 billion dollars shrank from last Friday's 264 million dollars.

Obviously, even if the net traffic capacity of Hong Hong has been constantly improving, the disadvantages such as low authenticity and lack of sustainability have been gradually enlarged. According to the report analysis, Xiao Hong's fault lies in the fact that the confusion between real content sharing and advertising content is inconsistent with its original intention, and it is difficult to collect statistics on goods.

In order to further raise the threshold and save the trust crisis, while continuing to train the content of UGC, Xiao Hong also began to force PGC (professional production content) and PUGC (professional user production content), on the one hand, through the pendant account set up by the platform itself, producing professional content and running hot topics, on the other hand, attracting three parties such as KOL and MCN to enter and produce professional content.

In May this year, Xiao Hong published the "brand cooperation platform upgrade instructions", which made higher demand for fans and monthly exposure. The number of fans with less than 5000, and the average exposure less than 10000 of KOL will be canceled the qualification of brand partners, and no more advertisements can be answered. The previous standard is more than 1000 fans, and the average exposure of the notebook is over 1000.

At the same time, Xiao Hong book will sign a real name system that has been legally compliant with KOL, which has entered into the conditions of access to brand partners. In addition, only content cooperative agencies that have at least 10 or more brand partners and companies over a year or more can enter the brand cooperation platform. However, Xiao Hong book will give a month growth period for the existing co operative agencies which have not reached 10 applicants who are eligible for the terms of the brand partnership, and will be removed if they fail to meet the standards after the expiration date.

After the release of the news, the number of the latest brand partners in Xiaohong Book reduced from 17 thousand to about 5500 instantly, almost filtering out 70% of KOL, most of which were star and head KOL. Xiao Hong said in a statement that the upgrading of the brand cooperation platform is aimed at establishing a more high-quality, efficient, transparent and fair brand cooperation body system, so as to improve efficiency and standardize the business market while establishing a good community ecology.

In the same month, Xiao Hong also released nearly 500 thousand users to publish the "red heart" rating system. This product aims to continue to tap user value in consumer decision-making scenarios. It is understood that "Xiao Hongxin", based on the fact that Xiao Hong book truly experiences users and "one person, one vote, equal rights for each vote", is constantly updated according to the recycling of household registration monuments per month. The single products and categories covered will also be iterated continuously, aiming to restore the number of users' reputation of more than 3000 single products with grading.

In June 21st, it was reported that Xiao Hong Shu official issued a "detailed rules for the management of the cooperative organization of Xiaohong book" to the MCN organization, which explained in detail the criteria for the establishment of the small red book institution, the commercial deposit security system, rights and obligations, punishment measures and institutional KPI.

The rules require MCN institutions to pay 200 thousand yuan deposit before entering the small red book brand collaborator, and the use of margin is punished according to the small red book cooperative agency. If the institution involves "private orders", "false partnership with bloggers" and "data cheating and cheating" during the cooperation period, the deposit will be deducted and the cooperation will be terminated for one year.

Some analysts pointed out that the official evaluation system for MCN institutions is constantly filtering and filtering, hoping to select an organization that has the ability to continuously reserve high-quality bloggers. At the same time, it is also inspecting the company's scale, operation capacity, content making ability and content and business planning of the small red book platform.

What it means is that a MCN organization called "Hongwen culture media (Shanghai) Co., Ltd." has also emerged slowly. This is the official MCN institution created by Xiao Hong book, which provides platform support for personal content creators who have reached the standard but haven't found MCN institutions. After signing KOL as a brand collaborator, a settlement application can be filed once a month, with a deduction of 10% fees and taxes from Hongwen.

As for whether the industry will conflict with other third party MCN institutions, Cheng Hongwen, an analyst, is only giving Xiao Bo a choice to the bloggers during the transition period. It will not be too competitive. In early June, Xiao Hong began to test the live broadcast function. The core goal was not "selling goods" but "sharing life". Whether users can see live broadcast in the "discovery" page depends on the algorithm of content distribution.

We need to be vigilant. In a highly digitalized consumer climate, fierce competition has led retailers who originally sell mainly to focus on content.

In March this year, the UK luxury business platform Farfetch suddenly updated the global website in March of this year. It launched a content board that participates in global and creative personalities. It also invited actress Oscar, the actress and rap singer and activist Riz Ahmed, the model actress and activist Adwoa Aboah, who was the nominee and Golden Globe Award actress Chlo Sevigny. They will share their own fashion ideas and teach people how to make use of the luxury products of Farfetch to create extraordinary images.

Sweden's fast fashion giant H&M, whose performance growth is in the bottleneck, launched the new Internet platform Itsapark beta in May this year. The platform is the same as Xiao Hong's book. It aims to provide consumers with a place to solve fashion problems and seek new inspirations, so that people can exchange ideas and suggestions around fashion modeling. The website also provides links to all products involved, including not only private brands, but also competitors Asos, Topshop, River Island and New Look.

Instagram, the most popular social media platform for young people, has begun to test the water social networking business. This year, the company launched its internal shopping function. The product owner said frankly that the electricity supplier has the potential to become another major pillar of Instagram after advertising. Instagram predicted that in 2019, impact marketing would generate revenue of $1 billion 700 million.

If the above cases are against the international market and lack practical competitiveness in the Chinese market, the Tencent, the "originator" of the domestic social media, has recently launched a product called WeChat, which is called the "good thing circle" test. That is, when consumers search for "Montblanc" in WeChat, besides the official account of the brand, there will be the core or classic product of the brand. Users can choose to click on the "good thing circle".

"Good things circle" allows WeChat friends to more directly achieve the recommendation of peer to peer, which is regarded as a key move of WeChat's benchmarking book. In the latest report on consumer digital behavior in China's luxury goods market released by Boston consulting company, WeChat, which has 1 billion 100 million active users, has already surpassed Xiaohong book and has become the most popular social platform for consumers in the domestic discovery and research links.

Despite the twists and turns, the development path and location of Xiao Hong's book is becoming clearer and clearer, that is, "true, beautiful and diverse social platform". Mao Wenchao once described Xiao Hong as a "virtual city". Users can find like-minded people in this "city", and feel comfortable doing themselves, whether stars, KOL or ordinary people. In order to better grasp the sinking market full of business opportunities, Xiao Hong book, which started online, has landed in three lines under the experience of Shanghai Jingan, Jiangsu Changzhou and Shanghai Jiading, and both are in a profitable State.

To be sure, the industry's doubts about Xiao Hong's book are still going on, especially why the small red book should start with KOL and MCN organization from its own hands. But in such an era of information explosion, commodity explosion, homogenization, commercialization and fragmentation, it is a key to filter or maybe open the new door to Xiao Hong's book. After all, users and consumers need guidance from bloggers, and brands need bloggers to be disseminators, and "authenticity" is more important than ever before.