(Yicai) Aug. 29 -- Xiaohongshu, also known as Rednote, has put its e-marketplace front and center on the app’s main page and is waiving commission fees for the first CNY1 million (USD140,200) in sales by new merchants as the Chinese lifestyle content platform ramps up its e-commerce drive.

This marks the latest progress in Xiaohongshu’s business transformation, two years after the platform, which boasts 350 million monthly active users and is known for its product recommendations and interest-driven content, announced its ‘all in’ push into online retail.

Xiaohongshu aims to maintain a strong presence in the e-commerce sector and attract more high-quality vendors, Afang, head of merchant development at the company’s trading business, said at a media briefing held yesterday.

Currently, only users who shop frequently on Xiaohongshu can access the new interface, Afang said. However, all users should have access to it within the next month.

Since Xiaohongshu began seriously promoting its e-commerce business in 2023, the Shanghai-based firm has gradually built up its online retail infrastructure and developed a signature content-driven shopping style in which lifestyle experts, such as buyers and store managers, create, select and match products to meet users’ personalized needs.

The number of people shopping on Xiaohongshu is growing fast, especially among the young, said Laike, head of Xiaohongshu’s trading marketplace. “We hope the e-marketplace will become another important reason for young users to use the Xiaohongshu app,” he said.

Of Xiaohongshu’s 350 million monthly active users, half are aged 30 or younger, according to data released at the briefing. And 70 percent of those who make online purchases are in this age group. Xiaohongshu describes its e-commerce users as young people with strong purchasing power, good taste and a willingness to pay for quality.

The seller community on Xiaohongshu is also relatively young. Half of the individual merchants with stores on Xiaohongshu were born after 1995, and more than half of them are running a store for the first time, Afang said.

When it comes to shopping preferences, Xiaohongshu’s competitive edge is not in traffic, scale or price, but rather in providing users with a unique shopping experience, Laike said. Users know that they can find ‘good stuff’ on the platform.

The number of new merchants surged 8.1 times last year from the year before, and the pace is still accelerating, according to Xiaohongshu. Over the past three months, Afang has been on business trips every week to find and onboard quality vendors, he said.

Before 2022, advertising linked to "product recommendations and interest-driven content" had made up around 80 percent of Xiaohongshu’s revenue, while e-commerce only contributed 20 percent. However, with the new push into e-retail, this proportion is likely to have changed.

When Xiaohongshu will go public is a subject of great market interest. There have been rumors of a potential listing almost every year since 2021. This year there were reports suggesting that Xiaohongshu would list as soon as this year, but Xiaohongshu has not made any public comment yet regarding its initial public offering plans and potential valuation.

Editors: Tang Shihua, Kim Taylor