Xiaohongshu The Little Red Book for Your Social Media

Social media platform? Or e-commerce platform?

Part content-sharing site, and part fashion and luxury shopping platform, this app became the trusted source of product information for young urban Chinese women in China.

What is Xiaohongshu?

The official website describes Xiaohongshu as a “lifestyle community platform”. Xiaohongshu is also known as Little Red Book or Red. Mao Wenchao and Qu Fang established the company in 2013 when they found an information gap on how mainland Chinese enjoys travelling to Hong Kong–one of their favourite travel destinations–to purchase luxury foreign brands but lacked the knowledge.

In late 2018, Xiaohongshu had garnered 100 million users and shot up to more than 300 million registered users by July 2019. The founders have identified that 70% to 80% of the users are women. Data showed that women from the ages of 18 to 30 posted daily feedback and recommendations of purchased products from cosmetics, apparel, food, to travelling, where 90% of them were middle or upper-class women with a considerable amount of disposable income.

Users can post product photos, reviews, and tips for other users, where they will be able to read, like, comment, and save to their boards from others as well. The “like” feature in Xiaohongshu is similar to Facebook’s “like”, as well as how leaving a comment on content counts as interaction with the post and the user. Meanwhile, saving content is like Pinterest’s “save” feature where users can bookmark it for future reference.

Unlike other e-commerce platforms that allow anonymous reviews or one-click ratings, Xiaohongshu encourages users to share “notes” which are posts with detailed, immersive product reviews. For instance, users can be reprimanded if they do not register any paid promotional links with brands. Users can then easily distinguish genuine posts from paid posts with content integrity in Xiaohongshu.

Influencers are born by posting quality content regularly as it can instantly attract a significant amount of followers. Once users have gathered a significant following, they can even earn commission by becoming influencers.

Xiaohongshu’s sales revenue exceeded 100 million RMB in just two hours on 6 June 2017 when they organised a shopping festival to commemorate their founding anniversary.

The number of verified brands that feature products on Xiaohongshu comes up to about 8,000 brands, including many major global brands at the moment. More investors are interested in this app, including the familiar name of Alibaba, which has supported Xiaohongshu with USD 300 million in series D funding on account of the strength of their market niche.

It first started as a shopping guide but gradually evolved to a combination of sharing and reviewing feedback of products from other users, plus purchasing them directly from the same app as their primary monetization channel. Thus, user-generated content, word-of-mouth advertising, and online community-building have resulted from this platform’s unique fusion.

Following the success of the online platform, Xiaohongshu established a physical store in Shanghai in mid-2018. This step led to the expansion of product offerings favoured by its users.

How will getting involved in Xiaohongshu help your brand?

Xiaohongshu is a platform that can assist brands in improving brand visibility and in interacting with potential customers. Furthermore, brands can utilise the e-commerce marketplace to sell their products. With just a few documents, companies – local or foreign – can easily set up an official brand account on Xiaohongshu.

An official report released by Xiaohongshu describes the sale price, conversion, and repeat purchase rate are higher plus a lower refund rate on the platform as compared to the live streaming of other e-commerce platforms.

On top of that, brands can utilize the platform to identify the latest interest from young consumers in China. Include Xiaohongshu in your marketing plan to reach consumers in new trendy ways.

Brands can also leverage on Xiaohongshu based on the following:

Huge user base

Discovering brands or information on their own is favoured by Chinese consumers, rather than acquiring it from a formal source. Xiaohongshu has a substantial number of active users, where they can explore new brands from a recommendation from others. Brands can leverage the platform’s effectiveness in developing quality Key Opinion Consumers (KOC) and loyal customers.

Customer trust

Hard sell from advertisements will be a fruitless attempt to attract current Chinese consumers. The assumption made by Chinese consumers that online influencers are more trustworthy than “official” advertisements has intensified, which makes positive word-of-mouth more effective in China than in the West. Xiaohongshu is a contrast to any other internet sources as it relies on trust and authenticity.

Online influencers

Brands can still benefit from this platform without having to create an official account or shop. Key Opinion Leader (KOL) and Key Opinion Consumers (KOC) marketing is key in China and it does not show any signs of declining in use. KOCs in this platform particularly can make an impact for brands as they are more authentic, loyal to a brand, and much less expensive.

E-commerce

It has become habitual for Chinese consumers to check Xiaohongshu for reviews when they discover an interesting brand or product. Having the product available on the Xiaohongshu marketplace can influence the likelihood of purchasing the product as users can immediately add it into their shopping cart within the app. Additionally, forming a partnership with a reputable platform like Xiaohongshu can reassure users of its authenticity as counterfeit products on e-commerce is a problem that persists in China.

How to use it?

For brands that have created an official account with Xiaohongshu, you can start creating content and post as “notes” for users to browse through. Brands with an official account can benefit from user-generated content as well. When users post their feedback/recommendation and tag your brand, it will appear in the “notes” section on the brand’s official account.

The homepage of the brand will also display a “product” tab for users to browse a list of goods that are available in the Xiaohongshu marketplace, where they can directly go to the brand’s store within the app to purchase any favourites.

This platform which focuses strongly on lifestyle, beauty and fashion markets provides versatility in their features which brands can benefit from. Xiaohongshu recommends content like food, fashion, and travel in an “explore” section for users to discover from other popular users that they might like. Not only that, users will receive alerts about shopping experiences in their physical environment with the “nearby” section in the app.

Xiaohongshu introduced a “brand partner platform”, targeted to connect brands with influencers and KOLs to arrange for sponsored content. This feature enables brands to be connected with any influencers on this platform by a simple search of content tags. Key metrics such as the number of likes, average hits, comments per post, and fan counts of the influencer can be viewed by the brand’s team.

When to use it?

The right time is now. The Chinese market, who typically enjoy travelling to shop for luxury goods, have no access to the old ways of procuring their favourite items anymore. The impact of the Covid-19 pandemic has shaped a new way for consumers to purchase goods, which is through online shopping platforms.

Xiaohongshu presents the solution for these consumers as many luxury brands have already signed up, such as YSL, Shiseido, Fendi, etc. This platform has shown amazing growth since its launch and will continue to grow and evolve to better suit its consumers. It will be a good opportunity for your brand to use Xiaohongshu to tap into the Chinese market.

Who should use it?

Xiaohongshu’s user base consists of affluent young Chinese women. Brands that are targeting the same demographics can consider implementing the use of this platform in their social strategies. This social e-commerce platform has cultivated a relationship with trust and authenticity with the consumers that brands can leverage on.

This platform is also ideal for smaller or less well-known brands. This is because Chinese millennials – who make up a majority of Xiaohongshu users – enjoy finding content with brands or products they are not familiar with. In addition, smaller brands can benefit from the word-of-mouth marketing approach to increase brand awareness.

As this platform acts as a training ground for KOLs and KOC, brands who are keen on utilising this marketing approach to reach young Chinese consumers will be fitting. Chinese consumers can be immune to posts that seem too “commercial”, especially endorsements from celebrities. Be sure to find appropriate KOLs/KOCs based on their content and audience.

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