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Three Reasons for the Success of Xiaohongshu

Dragon Social > Doing Business in China  > China Market Insights  > Three Reasons for the Success of Xiaohongshu

Three Reasons for the Success of Xiaohongshu

Little Red Book (Xiaohongshu in Chinese), is a shopping App for overseas products. With a slogan of “Find the best things from around the world”, it’s not only a social media platform, but also a  cross-border e-commerce site. It’s a place where users can share content and talk about their buying intentions and experiences. The users of it are both consumers and distributors. On June 6, 2017, the 66th anniversary of the founding of the PRC, over 100 million products were sold on the platform in just two hours, skyrocketing its ranking on the Apple App store to number one in the shopping category.

 

The slogan of Little Red Book - "Find good things around the world."

The slogan of Little Red Book – “Find good things around the world.”

 

It was founded as a social e-commerce platform in 2013 by Charwlin Mao, providing users with a platform to share personal shopping experiences, product reviews, and information regarding upcoming products. With an incredibly mature e-commerce landscape, Little Red Book, successfully managed to carve a place for itself in the market. In just four years, it has grown into the world’s largest consumer reputation database and community e-commerce platform, with more than 50 million consumers from 200 countries and regions.

 

With the rapid development of e-commerce today, how does Little Red Book manage to survive in a landscape dominated by Tmall, JD.com, and Taobao? Behind its success, what are the main factors? In this post, we will go through the details of Little Red Book’s success story.

 

 

The key factors of Xiaohongshu’s  success

 

1. Understanding the Needs of it’s Users

 

“When I was studying abroad, I witnessed the madness of my compatriots’ overseas shopping.” Said by Charwlin Mao, the CEO of Xiaohongshu, “However, many people don’t completely understand what they are buying, and they don’t know where it is better to buy it as well as how to get a refund. So at the earliest, we wanted to create a shopping APP to serve the group of people who would travel abroad and have overseas shopping requirements.”

 

Little Red Book gives you lots of recommendations and advises when shopping overseas.

Little Red Book provides users with tons of recommended goods and advice when shopping overseas.

 

In Little Red Book, most of the shopping experiences shared are from females shopping overseas, with those born after 1985 making up the majority of its users. They represent the new generation of consumers, who have become an attractive target for businesses all across the globe. Most of them are students and white collar workers, who enjoy overseas shopping and the pursuit of high-quality living standards. They want to find something that matches their lifestyle and their own perception of life. However, due to the limited number of products in the domestic stores and the increasingly mixed quality from sellers on Taobao and other platforms, more and more users have begun to drift towards Little Red Book.

 

So let’s summarize the needs of Xiaohongshu’s core users:

  • “I like to travel overseas, and I can’t travel without shopping, but I don’t know what is worth buying. I hope some other people especially who have rich experience can give me some advice.”
  • “With the improvement of the quality of my life, the goods I purchased are no longer limited to basic usage. I hope the things I buy can bring me more spiritual satisfaction. So I want to find these kinds of goods”
  • “I am a trend follower and like to surf the internet. When I look at what others are sharing, I get so excited that I also want to buy it.”

 

Based on these desires, Little Red Book has created a community which focuses on users’ original content. It increases content hits and user engagement through social media functions like comments, favorites, and reposts among users. All these combined with the e-commerce experience have laid the foundation for Little Red Book’s growing community.

 

2. Focusing on the Community First 

 

When it comes to business to consumer e-commerce, people tend to look at content as having a strictly selling intention. Customers always think “you just want me to buy your stuff”, no matter what type of content they generate. However, UGC (User Generated Content) is different, there is no obvious buying and selling relationship. Unlike the other e-commerce platforms, Little Red Book relies on its community and social media functions, allowing customers to interact both with sellers and other customers.

 

As it has grown Little Red Book has managed to maintain this focus on user generated content. It’s homepage still shows all kinds of shopping experiences shared from different users. In the early days, Little Red Book gathered a large number of active users from other shopping BBSs (Bulletin Board System). The excellent global products and overseas shopping strategies they shared quickly attracted a large number of fans and generated a lot of interaction.

 

Some shopping experience shared by Xiaohongshu users

Some shopping experiences shared by Xiaohongshu users

 

For example, for the coming Easter and Ching Ming Festival, Japan is a top travel location for many Chinese people because of the Cherry Blossom season. Having photos under Cherry Blossom tress in kimonos is a must for many Chinese tourists. However, due to the difference in language and culture, many tourists face difficulties in choosing the kimono style and the boutique for where they should either purchase or rent it.  On Little Red Book, users can find plenty of  recommendations for kimono boutiques in Japan, as well as how to make an appointment. You can choose the boutique you like best by comparing information from the various blogs on the site.

 

This type of user to user communication is essential to Little Red Book’s business model. Since the platform provides such reliable information from other users it helps to develop trust in the platform and the products that they sell.  It leads users to believe that since the recommendations from others on the platform are quite reliable, Little Red Book’s own products should be reliable as well.

 

Finally, Little Red Book upgraded it’s business model and moved fully into the e-commerce world, allowing it close the commercial loop. After six months of operation in E-commerce their sales volume broke the 200 million mark, a massive achievement for a business competing in one of China’s most developed sectors.

 

 

3. The personification of the platform — a more comfortable social relationship.

 

In Xiaohongshu, users are called “little sweet potatos” and customer service is called “the captain of the potatoes”. The use of these nicknames make the Little Red Book seem not just like an app, but  as a “girlfriend” who helps to bring goods from abroad.

When talking about products, Good friends and businesses, of course, are two different kinds of tones. Little Red Book closes the distance between merchant and consumer. Similarly, Little Red Book’s official Weibo, doesn’t do a lot of marketing about their products. By contrast, it posts tips that can improve life quality, interesting articles recommended by consumers, Make-up Tips, recipes, etc. It’s range of posts almost cover every aspect of a female’s life. At the same time, Little Red Book will also post some of its own merchandise, with an objective to meet the consumers’ requirement for living better. This way of promotion greatly improved people’s acceptance of the platform and has earned them quite a following on Weibo.

 

The web page of Xiaohongshu‘s official weibo account

The web page of Xiaohongshu‘s official weibo account

 

 

Conclusion

 

Through the whole development process of Xiaohongshu, no matter the original shopping strategy or the e-commerce’s entry afterward, it managed to cut into the big market of travel shopping. By focusing on the sharing function of the community, it devotes itself to finding good things around the world, to meet people’s growing needs for better life quality.

 

One of the slogans of Xiaohongshu used for promotion.

One of the slogans of Xiaohongshu used for promotion.

 

Many think that the Little Red Book is just another e-commerce business, when in truth it is so much more. It’s managed to create an image for itself as an interesting, useful, and warm brand. It turns everyone into a trend follower. The in-depth understanding of the core users in the post-80s and post-90s generation directly influences the development of the products. Now with considerable user volume and activeness, Little Red Book’s main strategy is to further develop the relationships with its users and grow further.

 

The Dragon Social team always stays up-to-date. If you have any questions about China marketing or the creation of some creative campaigns of your own, feel free to contact us!

 

 

Regina Yang

Studied finance and marketing at The Chinese University of Hong Kong. Born and raised in Mainland China with a strong passion for marketing and the fashion industry in China. Currently working in the Dragon Social team in charge of content marketing.

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