About Xiaohongshu (Little Red Book)

Xiaohongshu (Chinese: 小红书; pinyin: xiǎohóngshū; literally: "Little Red Book") is a cross-border e-commerce platform that retails luxury, beauty and fashion products by encouraging shoppers to share content, ideas, bargains and shopping tips in the social community.

Xiaohongshu uses data from users’ browsing, likes and collections to analyze user needs. It was launched by Miranda Qu and Charlwin Mao in 2013. The original intention of establishing Little Red Book was to provide a platform for people traveling abroad to share shopping experiences and recommend fashion products. After the app launched in 2014, the founders refocused on helping local Chinese consumers contact with global retailers directly, by purchasing and setting up a warehouse in an e-commerce free-trade zone.

Xiaohongshu users exceeded 100 million, with sales of nearly ten billion RMB, making it the world's largest community e-commerce platform.

On 6 June 2017, Xiaohongshu sales reached 100 million RMB in the first two hours, which make it rank first in the shopping category of Apple App Store.

In June 2018 the company completed a $300 million Series D funding round led by Alibaba, with a valuation of $3 billion.

• Combine the delectable visual desire of Instagram feeds to the inspiration of Pinterest boards with rich information and detailed analysis on the online buyer bulletin boards and marry them all with the shopping convenience of Amazon – you have got Little RED Book, a community driven cross border shopping haven for the post 90s urban females in China.

• Xiaohongshu (小红书), meaning “little red book,” or RED as its commonly called, is one of a kind social e-commerce app. It started as a peer to peer cross-border purchase information portal doling out shopping tips and strategies to help the readers shop smarter overseas. The shopping notes feature assisted the users in their travel to draw out their shopping lists, learn how to apply for tax refunds, wisen up about spotting fakes and bag the best shopping deals.

• It evolved to let its users tag the brands as they shared their shopping experiences which would further got linked to third party sites now finally to its current avatar where brands can set up their brand stores on RED, creating a complete commercial loop.

• RED’s motto of “Find best things from around the world” is well synced with its audience’s core needs. With high purchasing power, higher awareness of international brands and a need to keep up with the trends, the RED audience is continually seeking to upgrade their consumption and standard of living.

Why do the consumers love RED?

We interviewed the twenty-something urban women in China, and mainly five reasons came up for what makes RED sticky:

1. Access and product variety

“Can always find the stuff I want on RED. It has a great variety of goods.”

“Recently I wanted to change my foundation brand from Estée Lauder. After doing comprehensive research online and offline, I found Tarte to be a good option. This brand is not present in China. Some private sellers on Taobao offered it but didn’t look reliable. I decided to give the little RED book a shot, found a third party seller and went for it.”

2. Reliability

“Relatively a lot more reliable than C2C cross-border platforms, for example, YangMaTou（洋码头）

“My friends and I trust the platform and the authenticity of goods.”

3. Convenience

“Faster speed of delivery as RED has its warehouse, so excellent logistics and no customs issues otherwise you’d have to wait at least two weeks for goods shipped from overseas.”

4. Credibility

“I like the non-promotional nature of content on RED.”

“I hope they don’t start doing more of ads-like posts as that would make the platform less credible for me.”

5. Knowledge

“Nars blush was recommended across different platforms. I made up my mind to buy it and went to RED to check which shade should I opt for, reading reviews of users whose skin condition is most similar to mine.”

“I go to RED to check out what products are hot, what’s popular recently.”

“Gives me a place to review my purchases safely.”

Consumer Journey on RED

The consumer journey on RED is clean, aesthetically pleasing and user-friendly, allowing the user to complete the full commercial cycle from discovery to purchase on RED. Purchases are primarily conducted directly through the RED Store (小红书商城), and the payment options include both WeChat Pay and Alipay.

How can brands participate?

Brands can set up their brand shop (Official Account) with the primary purpose of e-commerce but the main value lies in using RED to create digital word of mouth and desire using Key Opinion Leaders (KOL) collaborations and product seeding route. Here are our top three strategies on how to find suitable KOLs on RED:

1. Keywords

Create a diversified keyword strategy to find your KOL mix. Start with category keywords such as “silver jewellery” or “premium water”, “hydrating face-masks”. Include any relevant trending keywords such as “小众” (meaning trending but yet not mass famous!).

Search by competitor brand names as those can give you a great understanding of KOL content in your category. Another interesting way is to search by your brand’s country of origin and identify which KOLs are passionately endorsing products of brand’s country of origin.

How can brands participate?

2. Related images

Follow the related images path under each post to find other KOLs talking about the similar topic.

3. Follow your target audience

You can follow the interests of your target audience and reach them via influencers in other categories of their interest. For eg. as a leather bag company targeting twenty something women, you may want to collaborate with travel and lifestyle KOLs and not restrict to only fashion KOLs.

What are RED influencers like? Closer look at three RED KOLs

The RED KOLs started as ordinary users who shared valuable and engaging content in their feeds and gradually gained popularity.

1. Shelley_宣Category: Cosmetics & skincare KOLFollowers: 14KAverage engagement for last 5 posts: 300

Content Types: Skincare routine, makeup tutorials, and styling tips

Styling: Her posts have a down-to-earth style. Instead of going the professional photography route, she keeps it real by sharing her lifestyle and day-to-day, leading to instant credibility and relatability with her followers. The average engagement for her posts is quite high.

One of her most recent posts provided an in-depth review for Dove’s Mild and Moisturizing Makeup Remover which garnered 1000+ likes, outperforming all her other posts, and was received positively for comprehensive information, and authentic opinion..

Location: Datong, Shanxi Province

Brands mentioned: Numerous cosmetics and skincare brands such as Vichy, Kiehl’s, Clarins, Origins…

2. Amber_元宝Category: Travel KOLFollowers: 414KAverage Engagement for last 5 posts: 26

Content Types : Pictures from her travels and any interesting products or places she discovers along the way

Styling: Drool-worthy food photographs, beautiful sceneries throughout the world. Her posts have an authentic, friendly and carefree attitude.

Background: Based in Shenzhen, Amber is an educator, freelancer and an avid traveler

3. DidorCategory: Lifestyle KOL (focused on cosmetics and home styling)Followers: 178KAverage Engagement for last 5 posts: 106

Content Type: Preferred skincare products, latest fashion picks, and premium lifestyle favorites.

Styling: Shows a sophisticated living experience with artistic product placements, very detailed posts explaining her experience, the good and the bad, followed by usage and overall tips.

Background: Didor is an Amsterdam-based blogger. Her self expressed passions of are interior design and fashion match well with RED’s content feed.

Brands mentioned: Numerous fashion, health, and home product brands such as Always, Daniel Wellington, SKII, and Estee Lauder, and Downy.

The platform is niche, still enjoys relatively high credibility and offers bang for the buck to the marketers engaging their target audience via KOL collaborations.

Xiaohongshu is fostering e-commerce via word of mouth

• Have you heard of Fan Bingbing, that famous Chinese actress known in Hollywood as Blink in X-Men? Which shampoo does she use to tame her mane? How does supermodel Angelababy maintain her fluffy bangs? And, just as important, how does Dee Hsu (that hilarious Taiwanese TV host more commonly known as Xiao S or Little S) achieve the look of a V-shaped face? You must have seen Chinese actor Hu Ge on those Emporio Armani billboards around town, looking all styled up and retouched. But do you know which espresso bar he frequents for his morning cup of joe?

• There is one handy place you can find the answers to all the questions above, the Xiaohongshu (小红书aka Little Red Book or RED). Xiaohongshuis also the number 1 cross-border e-commerce app in China.

What is Xiaohongshu?

Xiaohongshu encourages a “safe space” for like-minded consumers to write reviews and share their shopping experiences good or bad.

The app contains an “Explore” section enabling users to explore content on topics such as fashion, food, and travel. However, the most popular category on the app remains beauty and cosmetics.

The app is often used when a user is investigating a new cosmetic product they would like to try, and are curious about the experience of other customers.

Let’s explore Xiaohongshu?

The app also has a “Nearby” section that users can use while traveling. While on a business trip to Hong Kong, Xiaohongshu would point me to food, experiences or shopping opportunities around me.

When reading a post, users usually add “hyperlinks” to the page of the brand which can contain an e-commerce section. There is a smooth transition between content consumption and e-commerce.

From a social platform to an e-commerce platform

Before becoming today’s social and e-commerce hybrid, Xiaohongshu started out as a drafting tool for Chinese users to make fashion and beauty shopping lists before traveling overseas, with an interface similar to Pinterest. Essentially, it was just a content sharing platform, targeting Chinese shoppers’ unmet desire of discovering and sharing shopping experiences.

Having accumulated a huge amount of social and consumption data from a largely urban female user base, Xiaohongshu has since developed a closed shopping cycle on the cross-border sale of luxury items.

From a social platform to an e-commerce platform

Instead of choosing a marketplace model like most Chinese e-commerce sites, Xiaohongshu maintains partnerships with foreign brands and keep their own inventory for added quality assurance, shipping directly to users from their warehouse.

Xiaohongshu may be the best platform for shoppers to reach a large group of like-minded individuals, who are most likely to engage with their posts (known in the app as Shopping Notes).

Users don’t have to make their personal experience completely public (like on Weibo, China’s Twitter), or visible only to a closed circle like on WeChat. On Xiaohongshu, Shopping Notes are written by and shared to a relevant crowd that are eager to get informed about shopping and lifestyle.

How little is Little Red Book?

Xiaohongshu is one of the largest and fastest growing social e-commerce apps in China, co-founded in 2013 by Charlwin Mao and Miranda Qu. The women-focused app is now:• Valued at $3 billion in its Series D round June 2018• Supported by the most prestigious investors including Alibaba, Tencent,

Genesis Capital, ZhenFund and GGV Capital• Over 100 million registered users• 30 million monthly active users, a 40% increase in end of 2017Xiaohongshu was ranked as the #1 app in the cross-border e-commerce App category with 15.4 million MAUs during Black Friday 2017 according to Analysys. The #2 app Kaola only had 5.3 million MAUs during the same period.

According to iiMedia, Xiaohongshu makes up for 5.6% of the total cross-border e-commerce market. Notice that it’s one of the only platforms that’s gaining more market share in Q1 2018.

Xiaohongshu’s user demographics

In a nutshell, most Xiaohongshuusers are post-90s urban females who value quality, with relatively high consuming power, and premium taste.It’s one of the fastest growing e-commerce platforms.

This makes the platform the ideal channel to target young, affluent female shoppers that have the intent and ability to consume branded products.

According to Qianfan, Xiaohongshu has a predominantly female audience (88%). It also has a rather young population: more than 60% of its users are 30 years old or younger.

57% of the users live in top-tier cities, the traditional centers of wealth. In fact, a closer look at their spending behavior reveals a large proportion of the users have relatively high consuming power.

User content that informs purchase decisions

High-quality shoppers demand high-quality pre-purchase information. Driven by candid product reviews (Shopping Notes), authenticity is at the core of Xiaohongshu’s user posts.

It is like an illustrated textbook that teaches you to shop, covering such topics as what up-and-coming brands you need to know, how to spot fakes and the best time of the year to shop for the best deals etc.)

Users can make purchases through a shopping note, ensuring a smooth and efficient shopping process that takes place entirely within the platform.

User content that informs purchase decisions

To maintain quality and effective communication, Xiaohongshu’srecommendation algorithm encourages users to interact with topics they are interested in. Profanity, explicit self-advertisement and verbal abuse are all effectively censored.

Also, it is worth noting that there is no forwarding or sharing features on Xiaohongshu, while users can like, comment on, and add Shopping Notes to their own collection.

This in a way prevents users from getting spammed, and to let Xiaohongshuorganically push to users the content they believe will be most relevant and useful to them.

Celebrities’ favorite sharing platform

Xiaohongshu is one of celebrities’ favorite social media platforms in China, and there are plenty of stars sharing their latest shopping picks and lifestyle hacks there every day, mixing snaps of their not-so-glamorous side of life.Consumers feel like they share an intimate bond with celebrities through their personal, light-hearted Shopping Notes. This has created a unique UGC (user-generated content) circle made up of well-known influencers with a massive following.

On a platform like Xiaohongshu, celebrity endorsements come with a special authenticity. Fan BingBing is a classic case of quality over quantity. Dubbed “queen of sales” on Chinese social media, she actually temporarily brought down the server of Xiaohongshu one time, thanks to a shopping note endorsing the latest beauty finds she just published.

Currently, with 9.9 million followers on the platform, every face mask she ever endorsed on the platform is reported as sold out. Even the actress joked about quitting the platform, so she can at least find her favorite products in the store.

Marketing on Xiaohongshu

Unlike other platforms, Xiaohongshudoes not provide display ads services. It relies on a vibrant network of social interactions and KOLs which can help promote brands.

For products that are listed on its e-commerce platform, Xiaohongshu has different sales campaigns to generate sales, stores and brands can sign up. It also runs a 4-hour count down sales events 3 times per day platform-wide. These discount events are focused on cosmetic product, health product, food, household items, formula. It also runs a “Stylish girl” event which hosts cosmetic product only.

Marketing on Xiaohongshu

Smaller brands can benefit from Xiaohongshu’s growing network of celebrity users to drive brand recognition through KOL campaigns. A simple way to begin partnerships is to send products to influencers that are within the brand’s niche and have them authentically post their thoughts.

Is Xiaohongshu a good investment?

Xiaohongshu is not a cheap platform to operate. It charges a large 15-20% to brands. On top of this, a company helping you run campaigns and operate your store will often charge an additional 10-20% of sales.

That’s 25 to 40% of your sales you have to give up, without taking into account fixed operating costs (often 15,000 to 50,000 RMB per month).

So is Xiaohongshu worth the money? It is, but not only as a sales platform: as an information platform.

Chinese Luxury customers make exhaustive research before purchase. They have the largest number of touch points before making a purchase decision, and especially if you’re in the beauty space, Xiaohongshu will be one of them.

Is Xiaohongshu a good investment?

Even niche cosmetics brands can have thousands of mentions on Xiaohongshu, and customers who see your products on Xiaohongshumight very well end up buying it on Tmall or WeChat a few hours or days later.

In short:Xiaohongshu is worth it. But with its huge engagement rates and significant organic traffic, you should see it as a marketing channel rather than as a sales platform.

Recommendation

As part of the e-commerce revolution for purchasing better products, Xiaohongshu’s unique positioning as a trustworthy, celebrity-approved distributor of overseas products is a great channel for brands that look to capitalize on the social commerce trend.

The nature of Shopping Notes makes it not only authentic but also useful to potential consumers. Driving brand recognition and sales aside, a well-established presence on Xiaohongshu allows a business to track customer sentiment over a test period, which can then be used to inform future marketing strategy.

eCommerce in China How retailers and brands are innovating to succeed in the most dynamic retail market in the world

https://www.pwccn.com/en/retail-and-consumer/publications/total-retail-2017-china/total-retail-survey-2017-china-cut.pdf

Our Service Package

• Red Official Account (Brand Store) Setup

• Package A: 10 product seeding per month (Monthly charge + 15% commission)

• Package B: 20 product seeding per month (Monthly charge + 20% commission)

• Consignment at Hong Kong warehouse or (Red Hong Kong warehouse)

Remarks : Not include RED store commission and store depoist