On April 27th, GeekPark reported that Xiaohongshu, a Chinese lifestyle-sharing platform, has begun recruiting restaurant and service providers for internal testing. The platform will soon introduce group-buying functions to connect users with restaurants and facilitate offline transactions.
By enabling the group-buying feature, Xiaohongshu will enter into competition with local lifestyle platforms such as Meituan, Dianping, and Douyin. Douyin has set a target of 400 billion yuan ($57.9 billion) in GMV for its local life business this year.
Xiaohongshu has introduced support programs for both merchants and influencers. The platform is encouraging more merchants to join by offering zero deposit, zero commission, and traffic support. Additionally, influencers can earn commission rewards by posting notes about restaurants that include group buying links that generate transactions.
In the past two years, Douyin, Kuaishou, and Xiaohongshu have ventured into the local life business. This move was driven by the potential for growth in this sector as it remains largely untapped. According to iResearch Consulting’s data, China’s online penetration rate for local life services stood at a mere 12.7% in 2021. Despite such low figures, the online-to-offline (O2O) industry for local life has already reached an impressive scale of 2.83 trillion yuan ($409 billion).
Xiaohongshu’s local lifestyle business was first attempted in 2019 with the launch of its store details display function. In 2021, Xiaohongshu expanded its offerings in response to the growing popularity of camping and tourism, taking a step forward in the travel category.
In recent years, Xiaohongshu has enhanced its point of interest pages for restaurants and scenic spots. These pages now provide more than just basic information like addresses, average cost per person, and contact phone numbers. Users can also find popular dishes, videos, and nearby stores on these pages.
In recent years, Xiaohongshu has gained popularity among young people as a lifestyle search engine due to the expansion of user habits and content. This advantage has enabled Xiaohongshu to enter into local life businesses, which is expected to generate significant advertising revenue for the platform.