Launching in 2013, XiaoHongShu was a fusion of a TripAdvisor-like forum and a Haitao (overseas purchase) platform, providing User Generated Content (UGC) shopping strategies.

Products were shared by bloggers to fellow users who wanted to know what to buy when they travelled abroad.

Now, XiaoHongShu (小红书, Xiǎo hóng shū), literally: Little Red Book, is a booming Chinese social media app with 1 billion registered users and 30 million monthly active users.

1 billion registered users, 30 million monthly active users

As the number of users increased, the team behind XiaoHongShu gradually discovered the benefits of ’planting the seed’.

Products tagged by vast number of users sell out almost instantly, from this XiaoHongShu developed their e-commerce business model, and sales boomed.

This is an influencers’ app, and it’s geared to accelerate expansion even more. XiaoHongShu has recently raised USD $300 million from investors including both Alibaba Group and Tencent, the two leading internet heavyweights in China.

The app’s new funds will be “used to support talent acquisition, machine learning infrastructure and user growth”, says the company’s spokesman.

Socially enhanced e-commerce

XiaoHongShu uniquely operates like a combination of Weibo (think Instagram) and Tmall (think Amazon) — a generator of word-of-mouth marketing. Users share photos and videos, write posts and tag items linked to e-commerce listings.

The company is adopting the trendy social and business model that focuses heavily on UGC content. The app zooms into an urban female community (between 18 and 35 years) passionate about cosmetics, fashion, lifestyle, healthcare, and luxury international products.

Key Opinion Leaders (KOLs) are constantly on the look-out for what’s new on the platform. Sharing self-generated content and short video are key ways to generating organic traction.

The app is gaining more popularity among China’s Generation Z, a young and sophisticated consumer base becoming more active and loyal to the platform.

How can brands leverage the platform?

Xiaohongshu seamlessly upgraded from content community to social e-commerce in 2014 with the launch of their self-operated mall Welfare Society.

Using intelligent data, the platform can learn what its users like and what their needs are. Based on those buying needs, the company sources the most popular products directly from abroad and sells them via their app retail store.

In the second half of 2016, XiaoHongShu extended an offer to third-party stores and brand merchants to set up stores on their platform.

The most popular categories on the app are beauty products, cosmetics, skin care, and nutrition supplements that are hard to find in China. Other top trends are fashion, apparel, and tourism.

This gives new, niche, and innovative foreign brands a springboard to enter the Chinese market, to get themselves digitally visible and accessible by Chinese consumers.

Share, review and purchase on the same platform

As Chinese consumers become increasingly more sophisticated and selective, traditional communication channels like TV adverts are not enough to capture their attention. This is especially true for Chinese millennials.

One of the key feature of the app’s success is that users have the opportunity to share photos and short videos of the products with reviews and tips. While other users can read comments and interact with each other.

The platform’s social commerce model has also attracted a number of China’s biggest celebrities. It has become an organic way for celebrities to engage with their fans and increase their fan base.

According to the company, celebrities are not paid to endorse the site and many are loyal users of the app themselves. On the platform, product recommendations of celebrity KOL fly off the shelf.

Japan’s Dr.Ci:Labo skin toner beat its one year total offline sales in Hong Kong during a three-day sale on XiaoHongShu. A Spanish neck cream, XHEKPON CREMA sold out overnight after Chinese actress Fan Bingbing shared on her account.

Many more celebrities, including Lin Yun, WuXin, Zhang Shaohan, Chen Huilin, and Liu Jialing, often share images and videos of their outfits and the skincare products that they use.

What next?

Little Red Book, and other social commerce tools like it, are a great way to generate buzz around a product in China. The social integration of the app can lead to direct conversions at a comparatively low cost compared to traditional marketing routes. It also opens up possibilities for companies to interact and engage with the celebrities and influencers (KOLs) that drive localised market trends.

Setting the right strategy for social commerce is an integral part of any exporter’s key action plan. ACOLINK’s social media services teach, guide, and launch brands on a social visibility pathway to optimise sales and accelerate growth. Contact us to find out more, or sign up for our Let’s Do China workshops.