Value Co-Creation in the Era of Social Networking: Exploring the

Social Commerce Value Creation Model Based on Xiaohongshu

Limu Liu

The University of Sydney, Business School, Australia

Keywords: Social Commerce, Value Creation, User Engagement, Community Building, Xiaohongshu.

Abstract: This study delves into the mechanisms and operational models of value creation in social commerce,

particularly highlighting its rapid development in the context of Web 2.0 and the COVID-19 pandemic, as

well as how social commerce distinguishes itself from traditional e-commerce with its S2B2C business model.

By adopting Xiaohongshu as a case study, this paper analyzes the key elements for successfully implementing

social commerce strategies, including user engagement, content sharing, community building, and their

promotion of commercial value and social impact. The research finds that through enhancing social

interaction and user-generated content, social commerce platforms can not only improve consumers' shopping

experiences and brand loyalty but also foster co-creation of value, thereby generating greater value for both

businesses and consumers. This paper contributes to the field of social commerce by proposing a theoretical

model for social commerce value creation, clarifying the relationship between user needs, platform strategy,

and business models. For businesses and platforms aiming for success in social commerce, this research

emphasizes the importance of promoting user participation, building a sense of community, and innovating

platform technology and algorithms. Moreover, the study extends the relevant policy implications based on

existing research.

1 INTRODUCTION

In recent years, influenced by the Covid-19 pandemic

and the development of Web 2.0 (Ukpadi &

Karjaluoto, 2017), the social commerce industry has

experienced an explosive growth. According to

Becdach et al., (2022), the size of the social commerce

market in the United States is expected to reach $79.6

billion by 2025. As shown in Figure 1, the social

commerce market has rapidly developed in recent

years (Becdach et al., 2022). Furthermore, the study

indicates that people have a strong preference for

purchasing goods in large quantities through

applications and websites (Napawut et al., 2022).

Social commerce differs from the traditional B2C

(Business to Customer) business model adopted by e-

commerce enterprises, following instead an S2B2C

(Supplier to Business to Customer) business model.

This means that goods are transferred from suppliers

to community leaders through social commerce

https://orcid.org/0009-0003-9836-7846

platforms, and ultimately to consumers (Busalim &

Hussin, 2016; Lin et al., 2017).

Figure 1: US retail social-commerce sales, $billions.

Although the potential for growth in social commerce

is significant, research on its value creation

mechanisms and operational models remains

relatively limited. This paper aims to explore the

mechanisms of value creation in social commerce and

Liu, L.

Value Co-Creation in the Era of Social Networking: Exploring the Social Commerce Value Creation Model Based on Xiaohongshu.

DOI: 10.5220/0012909200004508

Paper published under CC license (CC BY-NC-ND 4.0)

In Proceedings of the 1st International Conference on Engineering Management, Information Technology and Intelligence (EMITI 2024), pages 85-94

ISBN: 978-989-758-713-9

its operational models, with a special focus on

strategies for co-creating value through social

platforms, enhancing consumer participation, and

increasing commercial value. Considering the

limitations of existing research, this paper adopts a

case study approach, using Xiaohongshu as an

example, to analyze its social commerce model and

success factors, thereby constructing a theoretical

model of value creation in social commerce. This

paper not only reveals how to create commercial and

social value through user engagement, content

sharing, and community building but also provides

theoretical support and practical guidance for

businesses implementing social commerce strategies.

Through an in-depth analysis of the Xiaohongshu

case, this paper aims to provide a more

comprehensive understanding of the value creation

process in the field of social commerce, bringing

implications and insights to the industry.

This study's structure is outlined as follows:

initially, it presents the research context and rationale,

succeeded by an exploration of pertinent literature to

elucidate the notion of social commerce and its value

generation mechanisms. Subsequently, employing a

case study on Xiaohongshu, the investigation delves

into its approach to social commerce and strategies for

generating value. Following the case study findings, a

theoretical framework for value creation within social

commerce is developed. The study concludes with

suggestions for the social commerce sector.

2 THEORETICAL

BACKGROUND

2.1 Social Commerce

Social commerce, as described by Busalim & Hussin

(2016), predominantly involves the use of online

commerce mechanisms that integrate social media

and Web 2.0 technologies. It is understood as the

integration of social media conventions with Web 2.0

technologies, facilitating platforms that enable users

to interact and disseminate business-relevant

information. The construct of social commerce

emerges from the confluence of three key elements:

Web 2.0 technologies, social media platforms, and

traditional e-commerce practices (Busalim & Hussin,

2016).

Moreover, the concept of social commerce

extends to employing social networks or media to

enhance user engagement in various online

commercial activities like marketing, information

exchange, and purchasing (Zhao et al., 2023). This

definition reflects the dynamic nature of social

commerce, incorporating newer forms of interactivity

such as live broadcasts and community-based

commerce. Distinct from conventional e-commerce,

social commerce prioritizes social interactions within

online communities, leveraging electronic word of

mouth (e-WOM) and user-generated content to foster

a social shopping environment.

Furthermore, social commerce businesses

cultivate trust and community feeling via social

networks, providing tailored shopping journeys and

adding value through superior customer service and

engagement. Social media plays a crucial role in

enabling users to exchange experiences and

knowledge about products, significantly impacting

their online buying behaviors and overall shopping

experiences. Social commerce's distinctive features

offer companies the chance to enhance customer

relationships, yielding economic advantages like

heightened sales and effective marketing strategies.

By engaging in information-sharing activities, social

commerce participants provide social support

throughout the online purchasing process,

contributing to brand loyalty and the development of

active online communities (Lin et al., 2017).

2.2 Value Creation in Social Commerce

Per Teece (2010), the generation of value is seen as

the process through which companies produce value

for their stakeholders through the provision of

products and services that satisfy these stakeholders'

needs. Additionally, as previously discussed, social

media facilitates the sharing of shopping experiences

and product insights, impacting the purchase

decisions and experiences of other users.

Consequently, in the realm of social commerce,

stakeholders encompass not just the social commerce

platforms but also the users themselves. This study

brings into focus the notion of value co-creation,

defined as the collaborative effort between consumers

and providers in the creative process of designing and

developing new products or services (Yu et al., 2020).

This approach highlights the transition from the

conventional product-centric logic to a service-

dominant logic that is centered around the customer,

where customers evolve from being merely recipients

to becoming active participants in creation.

EMITI 2024 - International Conference on Engineering Management, Information Technology and Intelligence

Particularly in social commerce, the concept of

value co-creation is further amplified within social

media contexts, such as social networking sites,

online brand communities, and discussion forums,

which provide fertile ground for co-creation activities

or a co-creation ecosystem. For instance, Schau et al.

(2009) discovered that effective brand communities

enhance brand value over time through a mutual value

creation process with consumers. As mediums of

interactive communication, social commerce

platforms not only offer businesses abundant

opportunities for engagement and interaction but also

draw a wide audience and sustain a richness of

information, thereby facilitating numerous

collaborative possibilities.

Hence, the realization of value co-creation in

social commerce is contingent upon user engagement,

trust, and dedication. Social commerce platforms act

as digital spaces where users can exchange

experiences and information, engage socially, and

utilize collaborative features that support group

interaction, collaboration, and the achievement of

collective goals through the platform. This illustrates

that social commerce platforms serve not only as

facilitators of value co-creation but also as catalysts

in the value co-creation process.

3 VALUE CREATION ANALYSIS:

TAKING XIAOHONGSHU AS

AN EXAMPLE

Given the above analysis and research on value

creation and co-creation in Social Commerce, the

following section will further analyze the

mechanisms of value creation in social commerce

through a case study of Xiaohongshu.

3.1 Company Background

Xiaohongshu is a social media and e-commerce

platform that offers users a space to share and

discover products, lifestyles, and various experiences.

Users can share their shopping experiences and

product reviews through social interactions such as

posting, commenting, and liking, and they can also

purchase products directly on the platform. As of July

2019, Xiaohongshu's user base exceeded 300 million

(Xiaohongshu, 2024), and as of September 2023,

Xiaohongshu's monthly active users reached

approximately 199 million (Thomala, 2023), making

it China's largest social commerce platform.

As a social media and sharing platform,

Xiaohongshu allows users to post information and

choose the sections where their posts will be

published. Users can share articles about their travels,

shopping experiences, lifestyles, and even complaints

or mood essays (Eastward Media, 2023).

Xiaohongshu provides a platform for all participants,

including businesses, suppliers, and customers, to

freely share any information.

This approach not only increases product visibility

but also establishes a community-based trust system

where genuine experiences and feedback influence

purchasing decisions. These strategies allow suppliers

to conduct precise market segmentation and

personalized marketing, significantly contributing to

a detailed understanding of consumer behavior

(Zhong & Liang, 2024).

Moreover, Xiaohongshu's social commerce

model, by establishing a content and community-

driven platform, deepens the interactive relationship

between brands, suppliers, and consumers. It serves

not just as a place for information sharing but also as

a bridge for interaction between Key Opinion Leaders

(KOLs) and consumers, directly influencing

consumers' purchasing decisions through the sharing

and feedback within the community. Content creators

on Xiaohongshu, by posting genuine experiences

related to product use, provide references for other

users, thereby fostering a trust-based purchasing

environment (Zhong & Liang, 2024). Additionally,

the data analysis tools on the Xiaohongshu platform

offer businesses the possibility of targeted marketing

(Zhao & Zhou, 2023), enabling them to tailor

marketing strategies based on consumer behavior and

preferences, further driving product innovation and

market expansion.

3.2 Analysis of Customer Engagement

on Xiaohongshu

In the studies by Wang et al. (2022) and Zhong &

Liang (2024), an in-depth exploration was conducted

on the impact of user-generated content on

Xiaohongshu and its influence on the decision-

making process in a social commerce environment.

These studies reveal that users on Xiaohongshu are

both consumers and content creators who not only

engage in content creation and sharing but also

participate with suppliers in the design and

development of new product activities. Consumer

Value Co-Creation in the Era of Social Networking: Exploring the Social Commerce Value Creation Model Based on Xiaohongshu

behavior is significantly influenced by other users'

comments and shared content, especially for those

lacking knowledge in specific areas, relying more on

information within the community. The studies

emphasize that content and language of posts have a

deeper impact on consumer behavior than images,

with active users and frequent content creators having

the most significant influence on consumer

preferences. Further, Zhong & Liang (2024) focused

on how community leaders and the platform itself

play a key role in shaping consumer behavior and

preferences through active content creation and

frequent interactions with suppliers and consumers.

These studies collectively showcase the crucial role

of user-generated content in shaping consumer

decision-making processes, highlight the importance

of interactive modes in a social commerce

environment, and how these interactions enhance

connections between consumers and content creators,

promoting the co-creation process of new product

activities.

Moreover, in the study by Wu (2023), the

uniqueness of Xiaohongshu as a social commerce

platform was explored, especially its significant

differences from other social commerce platforms.

The research points out that user engagement on

Xiaohongshu goes far beyond simple sharing and

communication; users actively participate in value co-

creation activities based on group relationships. This

indicates that ordinary consumers, influenced by the

community, are likely to become content producers,

actively sharing their insights and experiences. This

transformation blurs the traditional roles of

community owners in social commerce, suggesting

that every user has the potential to become a

community leader, thus participating in the co-

creation process. This finding reshapes our

understanding of community dynamics and user

engagement models in social commerce, emphasizing

that on platforms like Xiaohongshu, value co-creation

is not the exclusive domain of a few content creators

or community leaders but a process in which all users

participate and shape together.

Furthermore, the platform actively interacts with

community leaders, sellers, and consumers to ensure

the quality and authenticity of the content posted, and

at the same time motivates users to produce high-

quality content (Jin & Yu, 2021). Therefore, for social

commerce, the platform's role is not limited to

regulation but also involves ensuring the quality and

authenticity of the content published by users

(suppliers, businesses, customers).

Platform management also affects consumer

behavior. The study by Lin and Shen (2023) utilized

the SOR model to deepen the research on the

purchasing intentions of consumers in social

commerce, where user trust needs to be obtained

through platform supervision, and platform

management's reinforcement of content management

measures can positively increase users' purchasing

intentions.

In summary, Xiaohongshu differs from other

social commerce platforms in that the platform

transitions from generating demand within general

communities, choosing merchants on the community

platform, or randomly selecting merchants for

purchases, to creating value through targeted

marketing and fixed traffic flow. This means

transitioning from user A or a community leader

posting content, directing traffic to user B or other

merchants in the value co-creation process.

Accordingly, Xiaohongshu's social commerce

operation model can be summarized as shown in

Figure 2.

Figure 2: Xiaohongshu social commerce operation model

In summary, this model explains Xiaohongshu's

Social Commerce Operation Model, where dashed

lines represent the flow of information, indicating the

sharing of information among platforms, suppliers,

and community owners within the social commerce

operation mode of Xiaohongshu. Each participant

involved in this business model influences each other

and collaborates in the conception of products'

operational activities, as well as in their design and

development. Suppliers, the actual producers of the

products, can deliver goods directly to consumers and

engage with them in customer service or after-sales

work. This also reduces the supply chain and complex

distribution processes, improving the operational

efficiency of producers and reducing profit loss

during the product delivery process.

EMITI 2024 - International Conference on Engineering Management, Information Technology and Intelligence

3.3 How Xiaohongshu Constructs a

Value Co-Creation Circle in Social

Commerce

Next, as shown in Figure 3, the value co-creation

circle formed by the social commerce business model

on Xiaohongshu.

Figure 3: Xiaohongshu social commerce value co-creation

circle.

In this model, the platform refers to the social

commerce platform, which is Xiaohongshu. It

provides the digital infrastructure for business,

content sharing, and community building. Then,

Platform Initiatives and Impact represent the

technology and marketing methods of the platform,

including technology and algorithms. This includes

incentivizing users to post high-quality content and

making recommendations based on data, which also

enhances the consumer's purchasing experience

(Zhao & Zhou, 2023). The stakeholders are

participants in the platform, such as suppliers,

customers, or community owners. As previously

mentioned, the platform's profit-driven algorithm

recommendations stimulate users, turning more of

them into content creators. The high-quality content

produced by these creators attracts more consumers to

make purchases, boosting sales and cultivating a

vibrant content ecosystem for the platform.

The core of this value creation circle is co-creation

of value, where all parties contribute to and derive

value from interactions and exchanges within the

ecosystem. According to Wu (2023), for consumers

among the stakeholders, their experience with the

platform is enhanced due to personalized content and

a sense of community. For businesses, this leads to

increased brand awareness, consumer insights, and

higher sales conversion rates. Content creators gain

more opportunities for monetizing their traffic and

audience growth due to the platform's promotions.

Finally, the platform itself benefits as the quality of

content created by content creators gradually

improves, and user engagement increases with the

quality of the community (Wu, 2023); ultimately

translating into profits for the platform.

3.4 Xiaohongshu Social Commerce

Value Co-Creation Conclusion

Model

Based on the analysis above, the Social Commerce

value co-creation model shown in Figure 4 can be

derived, which explains how Social Commerce

generates value. In the following analysis, this

model's value creation mechanisms will be detailed,

using Xiaohongshu as a template.

Figure 4: Social Commerce Value Co-Creation Model

Based on Xiaohongshu.

3.4.1 Users Demand Analysis

In this model, demand is divided into user and

platform needs, where the popularity of social media

allows users to showcase their desire for self-

expression on a broader stage, and online

communities provide participants with a platform for

expression (Liao et al., 2023). Forums that allow free

expression of opinions promote users' desire to

express, thus motivating consumers and suppliers to

co-create value for the community.

In the field of e-commerce, research by Amin et

al. (2016) delved into the needs of participants,

finding that both merchants and consumers focus their

Value Co-Creation in the Era of Social Networking: Exploring the Social Commerce Value Creation Model Based on Xiaohongshu

core needs on improving shopping efficiency.

Specifically, consumers seek a convenient and

efficient shopping experience, requiring ample

product information to make informed purchasing

choices. This reflects a high demand for information

accessibility and simplification of the shopping

process. On the other hand, merchants aim to connect

with consumers more effectively by integrating the

internet, smart technologies, data analysis, and social

media tools, aiming to enhance marketing efficiency

and customer satisfaction. This indicates that both

suppliers and demand sides view improving shopping

efficiency as a core need in the e-commerce

environment. Therefore, participants in e-commerce

need to focus on optimizing the shopping process and

information delivery mechanisms to meet the market

and individuals' dual pursuit of efficiency and

convenience.

Wu (2023) identified that people naturally

gravitate towards forming or joining groups driven by

their social instincts. The collective experiences,

stories, and feelings serve as the cohesive bond that

envelops individuals, creating a communal

"atmosphere" akin to a surrounding nebula, in which

individuals find themselves deeply embedded. This

effect is particularly evident among fans of various

sports teams who come together. In the sphere of

Social Commerce, this implies that individuals

sharing similar purchasing goals are drawn together

by the allure of group exploration, making such

collective dynamics a cornerstone for building

communities within social commerce. This insight

sheds light on a novel way to comprehend how

communities within social commerce take shape,

emphasizing the critical importance of common

experiences, emotions, and needs in fostering the

formation of these communities.

3.4.2 Platform Demand Analysis

The investigation by Tajvidi et al., (2020) delved into

the notion, drivers, and processes behind brand co-

creation, along with the role of social commerce

technologies and the social attributes in mediating the

interaction between consumers and brands. This

research highlighted the profound effects of

information dissemination, social support, and the

quality of relationships on the co-creation of brands,

offering a model for fostering content-rich

communities and enhancing user retention. Moreover,

the study brought to light the critical role of

safeguarding privacy to preserve a robust social

commerce ecosystem.

In the context of social commerce platforms,

Tajvidi et al., (2020) underscored that elements like

social interactivity, social support, and the caliber of

relationships encourage consumers to jointly create

brand value, markedly influencing their buying

behaviors. These factors collectively contribute to

boosting user retention by facilitating increased user

engagement and satisfaction, ultimately improving

the profitability of the platform.

Specifically for Xiaohongshu, the platform

encourages user-generated content (UGC), with over

70% of posts created by users, fostering active

participation and content diversity. The platform

focuses on sharing authentic experiences, and this

marketing strategy based on real user word-of-mouth

constitutes the cornerstone of Xiaohongshu's

community marketing success. Through high-quality

community operations and product experience

sharing, Xiaohongshu continually enhances content

quality and trust in the platform (Chernavina, 2022).

Thus, building a high-quality content community and

enhancing user stickiness are key to Xiaohongshu's

success, with the platform continually innovating and

developing in this direction.

Additionally, research by Zhao et al. (2023)

discussed the key features of social commerce, such

as platform compatibility, relative advantage, and

user trust, and their importance in increasing user

purchasing behavior. By improving the operational

efficiency of the platform, these features' performance

can be enhanced, thereby increasing user satisfaction

and purchasing intentions. Moreover, social influence

mechanisms, like subjective norms and critical mass,

can also be strengthened by enhancing platform

efficiency, further promoting user purchasing

behavior.

In conclusion, as a social commerce platform,

how to stimulate consumers' desire to purchase is key

to maintaining the platform's survival and

development. By building high-quality content

communities and increasing user stickiness, as well as

improving the platform's operational efficiency,

consumer purchasing intentions can be effectively

enhanced, thereby bringing more profits to the

platform. Xiaohongshu has achieved user growth and

brought significant economic benefits to the platform

through strategies such as algorithm adjustment and

encouraging high-quality content creation (Thomala,

2023).

EMITI 2024 - International Conference on Engineering Management, Information Technology and Intelligence

3.4.3 Social Commerce Value Creation

Analysis

Research by Wu, (2023) deeply analyzed that in the

era of "She Economy," with the improvement of

women's education level and the enhancement of

independence consciousness, female consumers have

become the core driving force of the consumer

market. In this era, women's consumption concepts

show more open and diversified characteristics,

especially on the Xiaohongshu platform, where

female users tend to share and purchase content

related to maternity and baby care, beauty and

skincare, clothing, etc. This not only reflects their

emphasis on self-expression but also their desire for a

high-quality life. Xiaohongshu effectively meets the

self-expression needs of female user groups through

its social and e-commerce functions, while also

providing a platform for the economic independence

and social status enhancement of women, reflecting

the growing influence of women in social and

economic fields.

Moreover, the primary age distribution of users on

the Xiaohongshu platform is between 20 and 40 years

old, whose shopping decisions are largely driven by

collective emotions and are based on trust in other

users in the community (Wu, 2023). This

consumption model effectively improves shopping

efficiency, transitioning from traditional comparative

shopping to a trust-based decision process, not only

enhancing the user shopping experience but also

promoting profit growth for businesses. For

merchants, the increase in the number of communities

and the improvement in community content quality

have enhanced consumers' trust in enterprises,

encouraged more users to participate in purchasing,

reduced dependence on traditional customer service,

improved business operation efficiency, and reduced

costs, demonstrating the significant potential of the

social commerce model in promoting economic

efficiency and social development.

Within Social Commerce, the decision to engage

with social commerce platforms is significantly

influenced by both technological aspects (such as the

tools and features of social media) and social elements

(including perceived value, pleasure, social impact,

and interaction) (Zhao et al., 2023). Therefore,

platforms continuously innovate to improve user

retention rates. As mentioned earlier, Xiaohongshu

enhances user experience by actively interacting with

platform users, merchants, etc., and ensuring the

production of high-quality content, and it also utilizes

new technologies and algorithms to ensure accurate

content delivery (Zhao & Zhou, 2023). These

measures have led to a series of explorations and

innovations in the Social Commerce field, driven by

profits to innovate and explore new business models.

In the context of Social Commerce, platforms like

Xiaohongshu demonstrate how the digital market

transcends mere economic transactions to create

vibrant community environments (Wu, 2023). By

integrating user-generated content (e.g., "unboxing"

videos), these platforms engage users in a cycle of

interaction and consumption that is deeply rooted in

shared emotions and community bonds. This process

not only enhances consumer experience by providing

a sense of belonging and identity but also increases

commercial value by intertwining commerce with

social participation and community building (Wu,

2023). Moreover, this interaction fosters a sense of

belonging and identity among users (primarily the

younger generation), who actively participate in

content creation and consumption. Through these

activities, the platform not only facilitates economic

transactions but also strengthens social bonds and

community cohesion, showcasing the ability of Social

Commerce to combine business objectives with social

significance, thereby making a positive contribution

to social welfare.

In the realm of Social Commerce, consumer status

is elevated through an ecosystem that integrates user-

generated content, fostering an interactive platform

where consumers transcend traditional roles to

become co-creators of value. This paradigm shift

underscores a more inclusive economic model,

valorizing consumer insights and contributions.

Hence, Social Commerce significantly democratizes

value creation, transforming consumers from passive

recipients to active participants in brand development

and innovation, thus enhancing their societal and

economic status (Wu, 2023; Liao et al., 2023) [16,20].

Social Commerce facilitates the fulfillment of

self-presentation needs by providing individuals with

a platform for online expression and identity

construction. Through participation in interaction and

content creation, users can align their digital personas

with their actual self-images. This not only enriches

their shopping experience by making it more

personalized but also enables them to actively

participate in shaping brand stories, thereby

strengthening their identity through recognition and

sharing of products on social networks (Wang et al.,

2024).

Value Co-Creation in the Era of Social Networking: Exploring the Social Commerce Value Creation Model Based on Xiaohongshu

Furthermore, the promotion of self-presentation

satisfaction becomes a key factor, allowing users to

carefully craft and share content that aligns with their

identity. This process not only allows for deep self-

expression but also cultivates richer interactions with

brands and their communities. Users actively

participate in value co-creation with brands by

contributing, sharing experiences, and feedback. This

dynamic significantly enhances user engagement,

loyalty, and the overall effectiveness of social

commerce strategies, emphasizing the key role of

self-presentation in the digital commerce

environment (Liao et al., 2023).

3.5 Summary: Innovations and

Achievements of Xiaohongshu in

Social Commerce

This case study delves into how Xiaohongshu

constructs a value co-creation ecosystem within the

social commerce domain, unveiling the following

discoveries and research outcomes:

(1) The Central Role of User-Generated Content

(UGC): Xiaohongshu has successfully built an active

community anchored on user-generated content,

which not only promotes widespread user

participation but also enhances the diversity and

quality of content. Users engage in content creation

and participate in the design and improvement of

products through interaction, significantly

influencing consumer decision-making.

(2) The Drive of Platform Strategy for Value Co-

Creation: Xiaohongshu encourages the production of

high-quality content through algorithm optimization

and incentive mechanisms, increasing user stickiness

and enhancing the platform's operational efficiency.

The platform's technological innovation and

marketing strategies enhance the consumer

purchasing experience, stimulating users' passion for

creation with precise content recommendations and

rewards for high-quality content.

(3) The Construction of Xiaohongshu's Value Co-

Creation Circle Model: Xiaohongshu's social

commerce model integrates advanced digital

infrastructure and algorithm optimization to promote

the generation of high-quality user-generated content

(UGC), and inspires users to transition from passive

receivers to content creators. The platform brings

together diverse participants such as suppliers,

consumers, and community managers, forming a

mutually beneficial content ecosystem. In this

framework, consumers enjoy personalized content

and a strengthened community experience, businesses

achieve brand promotion and sales growth, and

content creators gain more monetization

opportunities. Ultimately, this model not only

improves the platform's content quality and user

engagement but also significantly enhances its

commercial value and profitability, offering a

successful model for the social commerce field.

(4) This research thoroughly investigates the

processes of value co-creation within social

commerce by examining the case of Xiaohongshu,

leading to the development of a theoretical framework

that clarifies how user demands, platform policies,

and mechanisms for creating value interact. Crucially,

the insights and foundational elements of this model

extend beyond just Xiaohongshu, offering valuable

lessons for various social commerce platforms. The

generalization of this theoretical framework

emphasizes how the proliferation of social media has

ignited users' desires for self-expression, while online

communities offer platforms for participation,

encouraging both users and suppliers to co-create

value for the community. Moreover, an innovative

aspect of this theoretical framework is its proposal of

an integrated perspective, considering the crucial

roles of technological and social factors in user

engagement on social commerce platforms, as well as

highlighting the role of female consumers as the

driving force in the market under the "She Economy"

backdrop. The theoretical contribution of this

research lies not only in deepening and expanding

existing theories of social commerce but also in

providing a comprehensive framework for analyzing

and understanding the value co-creation process on

different social commerce platforms in future

research and practice. By emphasizing the broad

applicability and innovation of the theory, this study

offers new perspectives for academic research and

practical application in the field of social commerce.

4 LIMITATIONS AND OUTLOOK

This paper mainly focuses on the domestic market in

China, overlooking the dynamics and impact of

Xiaohongshu and similar platforms in the

international context. This limits the understanding of

global social commerce trends and the possibility of

extrapolating findings to other regions. Additionally,

the case study method specifically targets

Xiaohongshu, which operates mainly in China. This

narrow focus may not capture the full spectrum of

EMITI 2024 - International Conference on Engineering Management, Information Technology and Intelligence

social commerce practices or the diverse business

models adopted by platforms in different countries.

As a result, the findings may not be fully applicable

or reflective of the global social commerce landscape.

Moreover, the study faces significant challenges in

obtaining precise revenue data related to social

commerce activities on Xiaohongshu. The platform's

revenue streams, especially those arising from the

complex web of user interactions, content creation,

and sales transactions, are intricate and not easily

quantifiable. The lack of such data hampers the ability

to fully assess the economic impact of social

commerce on the platform's overall performance.

Furthermore, given the multitude of merchants on the

platform, conducting a comprehensive study covering

all merchants operating on Xiaohongshu is

impractical. This limitation means the analysis might

not fully represent the diverse strategies, challenges,

and successes experienced by different merchants

within the platform ecosystem.

Considering these constraints, it's important to

approach the results of this study cautiously. Future

investigations could mitigate these constraints by

including data from international markets, broadening

the case study to cover a larger selection of platforms,

gathering more in-depth financial data, and

performing a thorough analysis of the diverse

merchants present on Xiaohongshu.

5 CONCLUSION

This paper systematically explores the theoretical

background of Social Commerce, the process of value

creation, and a specific analysis of Xiaohongshu as a

case study. The article first defines the concept of

social commerce, highlighting the integration of three

core elements: Web 2.0 technologies, social media,

and e-commerce, providing users with an interactive

online shopping environment characterized by user-

generated content. By delving into the role of value

creation in social commerce, this paper reveals the

importance of co-creation of value, i.e., how

businesses, consumers, and other stakeholders

collaboratively work through social media platforms

to jointly participate in the innovation process of

products and services. The case analysis of

Xiaohongshu further demonstrates the practical

application of this theory, especially how value co-

creation is achieved through establishing trust and a

sense of community, providing personalized

shopping experiences, and enhancing customer

service and interaction. Additionally, through specific

analyses of customer engagement and platform

strategies, this paper discusses how Xiaohongshu

successfully built a social commerce ecosystem that

fosters business innovation, improves efficiency,

enhances consumer status, and meets the needs for

self-expression.

Drawing from these findings, companies and

platforms aiming for success in social commerce

should prioritize enhancing user involvement,

fostering community bonds, and advancing

technological and algorithmic innovations. To begin

with, platforms and businesses ought to boost brand

trust and loyalty among users by better managing

community interactions and promoting the creation of

user-generated content (UGC), thereby streamlining

the value co-creation process. Moreover, there should

be a focus on improving data analysis capabilities and

tailoring recommendation algorithms to improve both

the shopping experience for users and the accuracy of

market targeting and marketing tactics for vendors.

Additionally, given the scope limitations of this study,

future investigations should include a wider variety of

social commerce platforms and explore international

markets for deeper insights. Lastly, to remain

competitive and achieve long-term growth,

businesses and platforms must stay attuned to the

evolving needs of social commerce users,

continuously refining their business approaches and

technological solutions.

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