About Xiaohongshu (Little Red Book) - Wechatbiz

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 KOL
Followers: 14K
Average 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 KOL
Followers: 414K
Average 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. Didor
Category: Lifestyle KOL (focused on cosmetics and home styling)
Followers: 178K
Average 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). Xiaohongshu
  is 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 2017
Xiaohongshu 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 Xiaohongshu
users 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’s
recommendation 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 Xiaohongshu
organically 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, Xiaohongshu
does 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 Xiaohongshu
might 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