Xiaohongshu also known as the Little Red Book is a Chinese social media and e-commerce platform that was founded in 2013. Initially it was created as a space for users to find recommendations about foreign fashion, beauty and cosmetic products, as well as dietary supplements. It is known to have honest and better reviews of products from actual users rather than “created reviews”.
In only four years after its creation Xiaohongshu gained more than 70 million subscribers and developed its own e-commerce platform called Fulishe which has become one of the most popular shopping apps, generating more than $700 million Yuan (around USD$109 million) each semester . Users are mainly women and around 50% are students and young working women aged from 18 to 3 years old, who live in first and second tier cities. As well it has an important penetration in third and fourth tier cities.
Women buying in Xiaohongshu are the main buyers for cosmetic and fashion products. They rely on the reviews found in this platform and this transforms in great sales. The sales confirmed after reading a review of a product reaches up to 8% which is higher than the 2.6% that is reached after reading reviews in Tmall, the biggest China e-commerce platform. And these results are what make the Little Red Book so attractive for brands and retailers. As well you can find tips for luxury shopping and trips in countries like US and France among other countries.
The business model of this platform is quite unique and efficient. For the e-commerce section brands and retailers need to apply the website and be approved in order to sell their products. As well, they will sell directly to Xiaohongshu and they will do all the delivery and customer service. And as a second option the platform welcomes some qualified brands to establish their digital shops in the platform and will need to pay a technical fee plus a commission to up to 5% on sales.
However it is a very good deal for fashion and cosmetic brands as this market is highly influenced by the reviews on products. And Xiaohongshu differs from any other platform for having true reviews from actual users that can be long enough for users to tell the truth about the products using photos and videos. Users can use the “Notes” space to write their reviews and if the product they are making the review of is available in Xiaohongshu they can even place a link to the product. Hashtags are allowed and other users can comment on your review as well. Once a user is convinced to buy your product they can either click the link or go directly to Fulishe to buy the product.
The difference between Xiaohongshu and other similar Chinese e-commerce platforms is that they are more focused on the trust their users have on the reviews made than on the number of sales they have. This is why influencers are a key tool in this platform. Their honest reviews will make a certain product be successful or not in this platform. Brands are not allowed to make even soft ads to promote its products and there are no official accounts for brands either.
As any other Chinese social media app, you can follow your favorite people according to what you like. Influencers can work with certain brands by testing their products but their reviews must be personal, honest and not influenced; otherwise their account can be deleted. So before you try to approach an influencer you must be certain that your product goes in line on what they like. One example of how much power an influencer can have in this platform is when Fan Bingbing, a famous Chinese actress, who gained more than 600,000 followers in one month, made a review of a facial mask and cream. The products she recommended were sold out not only in Fulishe but as well in other online and offline sites.
Inside the app you can find as well some “Editor’s Pick” or “Featured” section in which include posts or reviews selected by the app and you have better chances of being there if your product was reviewed by an important influencer.
Xiaohongshu has become very popular and attractive for foreign brands. Here they can see if their products actually comply with what Chinese women or users are looking for. As well, it is a great place to study and learn what the market demands are. This way, brands can create new products especially for Chinese users and as well use this platform for their review and promotion.