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Xiaohongshu: A Social Commerce Platform You Cannot Miss

On 8th Dec. AMCHAM invited our founder, Miro Li, to share insights about one of China popular social platform, XiaoHongShu. In this article, Miro provided practical and professional marketing suggestions for brands on how to do branding on XiaoHongShu.

This article was also originally posted on AMCHAM.

Xiaohongshu (小红书), also known as “Little Red Book,” is one of the largest and fastest-growing social commerce platforms in China. Users can discover products, share recommendations and tips, and place purchases on the app. It is often used to investigate new purchases or to search reviews from other customers. Xiaohongshu describes itself as “a sharing platform for young people’s lifestyles through a deep-rooted UGC (user-generated content) shopping sharing community.”

Founded in 2013, Xiaohongshu hit 100 million monthly active users this year. It gained significantly more attention after raising over $300 million in its Series D fundraising, led by Alibaba, and as of June 2018, its valuation is over $3 billion. Though Xiaohongshu may not be as big as unicorns like Tmall or WeChat in terms of its user base or transaction amount, it has unique features that render it a must-have for both local and international brands.

Why is Xiaohongshu unique?

Start from its highly content-driven social sharing community: over 70% of all content on Xiaohongshu is user-generated. Authenticity is at the core of Xiaohongshu’s content, which users have come to trust. The later inclusion of e-commerce onto the app, including third-party operators in 2016, completes the social commerce cycle: When customers discover an interesting product from user posts, they can click through to the product page to make their purchases and post reviews after using the product. This differentiates Xiaohongshu from traditional e-commerce platforms such as Taobao or JD, and other social media platforms such as Weibo.

If we must compare Xiaohongshu with Western apps, think of it as a combination of Instagram and Pinterest. Just like both these platforms, you can save posts you like, engage with content and other users, create your own content and connect with brand pages. But Xiaohongshu also provides in-app purchasing, a stronger community of actively engaged users and longer, more detailed blog post-style content.

How can brands use Xiaohongshu?

Step 1: Set up an official account

Most people will already be familiar with WeChat official accounts, where a brand can gather followers, send them notifications and redirect them to their website or WeChat store. However, this can be costly and it is increasingly difficult to grow a following. An alternative option is to open an official brand account on Xiaohongshu, which has relatively lower costs and offers the ability to connect with a more targeted customer base. The monthly fee for managing a WeChat account is around RMB 10-20k, while for Xiaohongshu, it usually costs less than RMB 10k.

Official accounts benefit both brands who sell products on Xiaohongshu as well as those who simply want to use the platform to build awareness and interact with their customers. If users are already talking about your products on Xiaohongshu, a brand account allows you to respond to comments and turn inquiries into purchases, as well as maintain relationships with followers to gain a larger pool of customers. A good practice is to publish two to three posts per week while constantly monitoring and engaging with followers on a daily basis.

Companies should note that any brand that wants to launch marketing campaigns on Xiaohongshu must get their official accounts verified first. Without proper verification, commercial posts (including KOL posts or regular user posts) may be considered in violation of the platform’s policies and can easily get blocked.

Step 2: Open a shop on Xiaohongshu

Launching an online shop on Xiaohongshu may be a good option for brands that are new to China who are looking to test the market. Setting up a shop on other larger e-commerce marketplaces can be more complicated and requires more costly investment. Xiaohongshu has minimal barriers to entry compared to other popular platforms. It offers cross border payment and logistics support. For overseas brands, you do not need a Chinese entity or bank account. However, Xiaohongshu is not nearly as big as Tmall or JD in terms of the market share and brands, therefore, should not expect their sales volumes to be as large.

Step 3: Work with a KOL and KOC

Working with KOLs/KOCs to create word-of-mouth traffic is one of the most common marketing methods on Xiaohongshu. KOLs/KOCs know how to create the right type of content for the platform and help new audiences discover your brand. If a consumer goes on Xiaohongshu to research your product and sees little to no user-generated content, they will start to worry that it is not a good product.

Selecting and working with a KOL/KOC is both crucial and challenging for brands. First, you need to understand the different levels of KOLs/KOCs and their key characteristics. According to our experience, a pyramid-shape KOL/KOC strategy (as shown) is the most effective way to launch a campaign and reach your target audience. This includes one or two celebrities or top KOLs, a few mid-tier KOLs and a large number of small and micro KOLs and KOCs.

Xiaohongshu is now giving more attention and resources to promote micro KOLs and KOCs (those with less than a 10K follower base). On the app’s landing page, a considerable ratio of micro KOLs and KOCs are pushed to you, rather than the most popular ones.

However, follower numbers can be faked. How can you avoid fake KOLs? There is much more criteria you need to evaluate besides the follower number. One is content quality— try to pick KOLs that can produce high quality content in a genuine voice that their followers will love. Check the comments and find out how audiences react to the posts. When audiences take time to write dedicated and lengthy responses, this indicates an active and dedicated fan base. Users who are actively engaging with your KOL are the ones who are going to purchase your products.

Content is king on Xiaohongshu

Xiaohongshu is a highly content-driven platform. They want to be seen as a trustworthy source of product information. While the platform does offer display ads and sponsored posts, the core value of Xiaohongshu is still content, and this is what brands should focus on. Even ads need to provide valuable content. Unlike Weibo, Douyin and other social media platforms, Xiaohongshu limits the amount of commercial posts a KOL can do. Content that reads like an advertisement is almost guaranteed to do poorly. You must provide value to the reader and teach them something new. Shift your mindset from selling to sharing.

Change your tone of voice to the Xiaohongshu style to develop a sense of trust with your audiences. Write something interesting or informative in a sincere and casual way, instead of the standard content that brands often post on official WeChat channels. The best way to get noticed on Xiaohongshu is to get other people talking about your brand, not you. When people see their peers talking about a product, that’s when it will really catch on.

Having the right keywords is essential for optimizing SEO and increasing your brand visibility. Xiaohongshu is often used as a product recommendation search engine. People won’t just wander and stumble upon your brand or products. The initial way people may find your brand or products on Xiaohongshu is simply by searching for key product information (functions, ingredients, etc.) in the search bar. If you don’t have the correct keywords, users won’t find you.

Xiaohongshu has a filter system that will automatically scan the text, images and videos to filter posts, such as those containing illegal keywords or requests to lead users to other platforms. Strictly follow the platform rules to avoid being blocked.

Example of a Xiaohongshu post

Case Study – Perfect Diary

Established in 2017, Perfect Diary has grown to be the most successful domestic cosmetics brand in China. We found that the company put a lot of resources into Xiaohongshu. Apart from its young, stylish brand image and reasonable prices, the way it markets and engages with customers is something that other brands should learn from.

Approximately 50% of the content on the Perfect Diary brand account is reposted user generated content. This is an excellent way to engage with consumers, encourage the creation of even more UGC and saves the brand from having to create its own content. The brand also actively interacts with followers on a daily basis. The communication between Perfect Diary and customers is relaxed and colloquial, just like chatting with friends. In addition, Perfect Diary also actively conducts lucky draw games or free trial activities to engage with followers, especially after launching new products or during big promotion dates. The relationship between Perfect Diary and customers is closer than many other brands.

Final tips

Xiaohongshu is a fast-changing and evolving platform. It’s important to keep a close eye on new functions and rules in order to study and understand them, and to have a flexible long-term strategy. Instead of trying to create and stick to the perfect plan, experiment with the platform and play around with different styles of content. And most importantly, give it time to grow.


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