When traffic converges with sales, the tale of e-commerce repeats itself.

In the past, Alibaba invested in Weibo, sparking a wave of celebrity-driven sales on the platform; websites like Mogujie, Meilishuo, Juanpi, and Zhe800, acting as "Taobao Affiliates," once thrived but gradually faded from the spotlight.

Taobao has consistently pursued traffic, and traffic platforms have often ultimately partnered with Taobao for monetization. Yet, two decades have passed, and while Taobao remains unchanged, the once-popular traffic platforms have lost their luster.

Today, as a representative of the new generation of content communities, Xiaohongshu's collaboration with Taobao marks another chapter in the deep integration of traffic and sales.

▌1. Who Needs Whom More?

On one side stands China's foremost content recommendation community, and on the other, China's largest e-commerce platform. The partnership between Xiaohongshu and Taobao has naturally garnered widespread attention.

On May 7, 2025, the Chinese e-commerce landscape witnessed a significant collaboration—Taobao Tmall and Xiaohongshu officially announced a strategic partnership, jointly launching the "Red Cat Plan" to connect the entire journey from content recommendation to transaction purchase, forging a more efficient closed loop for consumption conversion.

The core highlight of this partnership lies in the new "advertising link" function. In the future, a dedicated link area will be established beneath Xiaohongshu's posts, enabling content from pilot brands to directly navigate to their product or store pages on Taobao Tmall. This allows users to seamlessly transition from recommendation to order placement with just one click, significantly enhancing conversion efficiency.

Following the announcement, a heated debate emerged: Does Taobao need Xiaohongshu more, or does Xiaohongshu rely more on Taobao?

Many argue that Taobao has a stronger need for Xiaohongshu.

As the only community in China capable of generating large-scale, high-quality content recommendations, Xiaohongshu has achieved remarkable traffic growth and sales capabilities in recent years. Despite attempts by giants like ByteDance, Alibaba, and Tencent to "replicate" Xiaohongshu through imitation and resource倾斜, they have all failed.

This unique blend of content and community tone places Xiaohongshu in a relatively proactive position in e-commerce collaborations.

However, Xiaohongshu's options are not actually vast.

Short video platforms like Douyin and Kuaishou compete directly with it in content ecology, making in-depth cooperation challenging; while JD.com's open platform has grown, its product diversity still lags behind Taobao's; and Pinduoduo, with its focus on low prices, is incompatible with Xiaohongshu's brand tone.

Comprehensively, Taobao is almost the most suitable and the only high-quality partner for Xiaohongshu.

From a proactive perspective, Taobao is clearly more eager for the Xiaohongshu platform.

As early as 2023, Jack Ma returned to Taobao, proposing the "three returns" of "returning to Taobao, returning to users, returning to the internet." The series of reforms at Taobao over the past two years can all be traced back to these three directions: shifting customer focus from merchants to consumers, divesting offline heavy assets to pursue a lighter approach, and introducing a real experience score to reconstruct the evaluation system.

And this partnership with Xiaohongshu is a continuation of the "return to Taobao" strategy.

In fact, the collaboration between Taobao and Xiaohongshu can also be seen as a return to the classic approach of "off-site traffic diversion." From Taobao Affiliate platforms like Juanpi and Zhe800 that emerged around 2012 to Alibaba's investment in Weibo in 2013, Alibaba has always been heavily reliant on off-site traffic. And this time, Xiaohongshu is playing the role of that traffic hub.

Off-site traffic is a crucial source for Taobao to maintain platform vitality and competitiveness. By leveraging Xiaohongshu, Taobao hopes to once again harness the content ecology and reconstruct its traffic logic and growth trajectory.

▌2. Can Xiaohongshu's E-commerce Still Succeed?

Xiaohongshu's stance towards external links has undergone several adjustments.

The most recent significant change occurred in 2021. That year, Xiaohongshu began to accelerate its e-commerce process and imposed stringent controls on external links, including those from Taobao. In August of the same year, Xiaohongshu issued major new platform regulations, completely removing external link permissions for products in posts, affecting not only Taobao Tmall links but also closing the product links of Xiaohongshu's own mall.

At the time, Xiaohongshu publicly stated that this move was aimed at optimizing the user experience. Jesse, who was then in charge of the open platform and e-commerce, publicly responded: "We do not believe that inserting product cards into posts is an elegant way of interaction."

Disconnecting external links and strictly cracking down on soft advertising have always been Xiaohongshu's strategies to maintain community tone and content ecological balance, as well as an important approach to keep its commercialization pace pure and orderly.

However, shortly after severing external links, Xiaohongshu launched the "account-store integration" strategy, widely seen as an acceleration of its commercialization—the platform intended to close the transaction loop between merchants and bloggers within Xiaohongshu, building a complete content-to-transaction closed loop.

In the subsequent years, Xiaohongshu experimented with various directions such as live streaming and direct e-commerce. But the overall results were underwhelming. Zhang Xiaohui, Dong Jie, and others brought popular live streaming scenes but failed to form a replicable top live streamer ecosystem, and Xiaohongshu itself also struggled to develop a mature live streaming e-commerce system.

In fact, as early as 2014, Xiaohongshu launched its self-operated cross-border e-commerce platform "Welfare Society" and achieved notable success in beauty, fashion, and other categories for a period.

However, self-operated e-commerce has extremely high requirements for supply chain, inventory management, and SKU diversity, making it difficult for Xiaohongshu to compete head-on with comprehensive e-commerce giants like Taobao. Many users still flowed to other platforms to complete purchases after being "recommended" on Xiaohongshu.

Ultimately, "Welfare Society" announced the termination of product sales and the closure of all stores in September 2023. This marked a strategic retreat by Xiaohongshu in the field of self-operated e-commerce, followed by a refocusing of resources on the platform ecology to support the development of buyers, curators, merchants, and brands.

The decision to reopen external links now inevitably raises market doubts: Does this mean that Xiaohongshu's exploration of building its own e-commerce system has once again failed? Will it ultimately only be able to direct traffic to other platforms, struggling to truly establish its own closed-loop e-commerce ecosystem?

These are the concerns of the outside world regarding Xiaohongshu's commercialization path.

▌3. Off-site Traffic and Taobao Affiliates

In this partnership between Xiaohongshu and Taobao, public attention has largely focused on Xiaohongshu, overlooking the potential far-reaching impact of this partnership on Taobao's future. In fact, to assess whether this partnership has the potential for qualitative change, the key party is still Taobao.

A core question is: What role does Xiaohongshu play in this partnership?

Looking back at history, there are two typical roles that can be used for analogy: Weibo, and rebate shopping guide platforms, the latter including Mogujie, Meilishuo, Juanpi, Zhe800, etc.

The example of Weibo is more well-known.

In 2013, Alibaba invested in Weibo, and at that time, one-third of Weibo's revenue came from Alibaba.

However, Weibo's high dependence on advertising, especially on Taobao advertising, also restricted the independence and development space of its ecosystem.

Another typical representative is the "super Taobao Affiliates" platforms represented by Mogujie and Meilishuo.

These shopping guide websites initially attracted users in the form of fashion sharing communities but actually served as traffic intermediaries for Taobao behind the scenes. Users were guided to complete purchases on Taobao after browsing the content, and the website earned commissions based on transaction volume. Data shows that among the 3 billion yuan shared by Taobao Union in 2012, such shopping guide platforms accounted for 21% of the share, earning over 600 million yuan in commissions.

However, when these platforms grew to a certain scale and attempted to build their own transaction closed loops, Taobao began to show vigilance.

According to reports, platforms like Meilishuo and Mogujie once contributed up to 10% of Taobao's overall traffic. To prevent external platforms from "usurping the host's role," from 2013 onwards, Taobao gradually tightened the interface permissions and commission policies for such shopping guide platforms, and even took measures of "restriction or banning" under the pretext of controlling quality, forcing them to transform or find new paths.

Taobao's series of actions clearly illustrate its consistent traffic control strategy:

Actively leverage external traffic for growth in the early stages of the platform, but once external partners grow too large and threaten the platform's dominance, decisively "take back power" and firmly grasp traffic control in its own hands.

Today, the partnership between Xiaohongshu and Taobao is, in a sense, an upgraded version of the Taobao Affiliates model. Taobao has consistently continued the strategic logic of "growing with the help of others, taking control when appropriate."

This time, the "Red Cat Plan" is not only a strategic collaboration between the two parties but also has the potential to trigger a commercial transformation in Xiaohongshu's content ecosystem.

Traditionally, the primary source of income for Xiaohongshu bloggers has been brand advertising and content collaboration. It is reported that advertising revenue once accounted for over 80% of the platform's overall revenue (2022). After the implementation of the "Red Cat Plan," bloggers' posts can embed direct links to Taobao products, coupled with performance advertising and conversion data tracking, forming a complete closed loop from recommendation to purchase.

This means that Xiaohongshu bloggers are beginning to evolve into "new-generation Taobao Affiliates."

In the future, they may not only need to publish content but also drive transaction conversions and earn commissions accordingly. Their income structure will also expand from the originally relatively single advertising fee to a composite model of "advertising + e-commerce sales commissions."

Additionally, the first UD cooperation between Xiaohongshu and Taobao Tmall, as well as the newly launched performance advertising mechanism, will also assist brand merchants in achieving efficient links from content delivery to product conversion.

This type of cooperation is actually familiar to everyone—products you have searched for on platform A will also be precisely pushed to you on platform B; other platforms may use native advertising, while Xiaohongshu may use bloggers' images, texts, or videos.

For Xiaohongshu, the most direct benefit is the rapid growth of advertising revenue.

Against the backdrop of rumors of Xiaohongshu's IPO, the support of Taobao's traffic and commercial capabilities will undoubtedly bolster its financial performance.

But in the long run, this also means a greater challenge: how to maintain the tone and balance of the content community while accelerating commercialization will become a question that Xiaohongshu must answer.

Interestingly, Alibaba invested in Weibo in the year before its IPO in 2014 and contributed a significant amount of advertising revenue to it. Now, with rumors of Xiaohongshu's IPO continuously emerging and its acceptance of cooperation with Alibaba, is it aiming for a performance boost before going public?

Perhaps this mutually beneficial partnership has already hinted at its price and chips from the start.

According to Tianyancha, Xiaohongshu's operating entity, Xingyin Information Technology (Shanghai) Co., Ltd., has frequently adjusted its shareholder structure in recent years, and currently has investments from Sequoia, Hillhouse, Alibaba, Tencent, and other capital firms.