Xiaohongshu was founded in 2013. Xiaohongshu focuses on the beauty and fashion domain, a platform for people to post and share shopping tips, product reviews and lifestyle stories.
Xiaohongshu has developed into a trustworthy source that can provide suggestions and references for other users and like-minded people. Xiaohongshu has successfully created a thriving user interaction/participation and information sharing community.
In order to meet the needs of users to purchase foreign goods, Xiaohongshu launched its own cross-border e-commerce platform "Xiaohongshu Mall" in 2014. Users can purchase overseas products through the app, connecting consumers with global brands. Since then, Xiaohongshu has established strategic partnerships with many overseas brands, including Lancome, Swisse,Innisfree etc,.
Relying on the successful business model of the social e-commerce platform, Xiaohongshu has achieved great success in recent years, especially in 2015, when GMV increased from RMB 1 million to more than 100 million people in just 6 months. It continues to grow. As of 2019, the registered users have exceeded 200 million. The revenue in 2018 was 1.49 billion yuan. It is expected to receive nearly 3 billion yuan in 2019!
As one of the most popular e-commerce platforms in China, it provides excellent opportunities for marketers.
1. Focus on Generation Y & Z who has high purchasing power
According to its official website, as of January 2019, the registered users of Xiaohongshu have reached 200 million, among which the 90’s and 95’s users are the most active. According to statistics collected by iResearch, more than 50% of users were under the age of 30, more than 80% of them are women.
For young urban women, Xiaohongshu is an effective platform for selling and promoting skincare, cosmetics and fashion products. Given that the app is very popular in Gen Z, Xiaohongshu is an ideal marketing platform for brands that want to target young people.
2.Thriving online community
Xiaohongshu successfully created an online interactive community by allowing users to share information, including product reviews, OOTD and makeup tips. In addition to creating their own content, users can also save posts, interact with others through likes or comments, and even press follow to subscribe to specific users/brands they like. Xiaohongshu also allows users to share posts externally via Weibo/WeChat.
3. Extensive word-of-mouth marketing
The user-generated content of the app makes key opinion leaders (KOL) active on the platform, similar to KOLs (influencers) on Douyin and Weibo, most of them share usefulness about beauty and lifestyle Tips and interesting content. These KOLs work with brands to promote products to followers, thereby increasing brand awareness, user engagement and followers.
Some examples of Xiaohongshu influencers include Austin Li, nicknamed "Mr. Lipstick", who tried luxury brand lipsticks such as Gucci and MAC. He has accumulated 3,169,800 fans and his comments are often shared by other lipstick lovers.
In addition to those who became famous after joining Xiaohongshu, celebrities such as Fan Bingbing and Ouyang Nana also opened their own Xiaohongshu accounts, which helped to further increase the application's traffic and credibility.
Fan Bingbing is known as the "Queen of Sales" and has accumulated more than 10 million fans on Xiaohongshu. She often shares her beauty tips with fans. Her followers are very active, and every mask she supports is sold out on the platform.
4. Direct link to an e-commerce store
In order to keep high-quality content, Xiaohongshu does not allow self-advertisement. By emphasizing "authenticity", it further promotes trust and honest sharing among users by implementing these policies. Therefore, descriptions such as "No.1..." or "Best..." are strictly prohibited in all brand stores or advertisements!
In addition to sharing and commenting, Xiaohongshu also uses a recommendation algorithm to create a custom homepage based on the user's browsing and search history. It also provides "exploration" functions based on the same data. This feature allows users to focus on topics they are interested in and sort out unwanted information. If you look into the "Nearby" feature, it displays popular topics based on the user's location, while "Following" displays the latest posts from subscribed accounts.
Xiaohongshu has pushed its application to a new level by launching an e-commerce platform called "Xiaohongshu Mall", which allows users to purchase products directly from merchants after reading reviews. Through the store, users no longer need to worry about the authenticity of the product.
This feature greatly reduces consumer search and time costs and further encourages the "like to read" cycle within the app.
For brands, they can set up an official account/digital store to sell products and interact with customers, which is an effective way to increase market awareness and sales. Xiaohongshu provides comprehensive logistics, customer service and marketing support for brands, including data insights and in-app advertising.
Summary
This is a new opportunity for the future. Xiaohongshu is a fast-growing online market. Unlike Taobao and Tmall, its content-driven model attracts consumers who value quality and authenticity and provides huge opportunities for high-quality brands.
