Last month RED/Xiaohongshu released a new rule for KOL and MCN. This month the new rule is effective officially and more details have been released.
One controversial rule is RED asks all registered MCN to pay RMB 200k deposit, which leads to a lot of complaint. RED claims this is following the general industry standard. However, Douyin doesn’t require MCN to pay deposit until they open accounts and take orders on Star Map platform, which Douyin only requires a RMB 50k deposit. Same on Taobao, MCN don’t need to pay deposit for listing. An RMB 100k deposit is required when they start taking orders, which is still much less than what RED requires.
Besides, RED also implements the most strict penalty policy. For taking orders privately (not through RED influencer platform), the MCN may lose all RMB 200k deposit. The same situation will only cause a RMB 10k penalty on Douyin and Taobao.
The relationship between platform and MCN is complicated. RED needs MCN to manage KOL and produce better content. On the other hand, MCN needs traffic and support from the platform. How RED will manage the relationship with MCN/KOL is a key to its future commercialization.
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