As businesses around the world strive to reach a new generation of consumers, one social commerce platform in China stands out.
Of course, we refer to RED aka the Little Red Book. Reaching millennials and Gen-Z youth with Xiao Hong Shu influencer and social marketing has never been more engaging.
RED was one of the most popular apps in China in 2019 for cross-border ecommerce, exciting a female audience, in particular. While international companies like Facebook and Instagram are struggling to integrate online shopping features, Chinese social media platforms are perfecting social shopping.
In this week’s blog article by Tenba Group discover all you need to know about Xiao Hong Shu and how to accelerate your brand with influencer marketing and social marketing in China.
What is RED?
Xiao Hong Shu (Chinese: 小红书) literally means Little Red Book and is therefore also known as RED. It is a Chinese social media and ecommerce platform, which was created in 2013 by Charlwin Mao and Miranda Qu.
Today in 2020, the app has 85 million monthly active users, who generate more than 3 billion posts a day. RED users and influencer stars love to review fashion and beauty lifestyle products, restaurants, and travel services in a blog-style with photos and short videos. This makes it the most trusted social shopping platform in China.
It’s like a “virtual city” where young people meet every day to hang out. Chinese consumers find foreign products sold via cross-border there, which are harder to find in China - high-quality luxury items, in particular, for health and beauty.
Foreign brands can use Xiao Hong Shu in three ways to sell their cross-border ecommerce (CBEC) products:
- As a social commerce platform, applying content and influencer marketing
- Set up an own shop on Xiao Hong Shu
- Wholesale to Xiao Hong Shu directly
The rise of RED
Alongside TikTok, Xiao Hong Shu put a social spell on teens and youth. 70% of RED users are born after 1994 (Generation Z) and 80% of the users are girls and women. It can be described as a mix between Instagram and Pinterest for the Chinese market. The Little Red Book is more about content and presenting yourself than hard sales.
Source: www.xiaohongshu.com
At RED Mall, the ecommerce shop function of Xiao Hong Shu, local products are sold to Chinese consumers as well as international products (cross-border ecommerce, CBEC). And with REDelivery, Xiao Hong Shu offers its own international logistics system. By the beginning of 2020, Xiao Hong Shu’s total sales reached 3 billion RMB (432 million USD).
In June 2017, RED held a shopping festival to celebrate its fourth anniversary. In just two hours the sales revenue exceeded 100 million RMB (14.4 million USD). And the app ranked first in the iOS App Store in the category "shopping".
In June 2018, the rival tech giants Alibaba and Tencent, among other investors, invested in Xiao Hong Shu. This investment valued the business at more than 21 billion RMB (3 billion USD). With this financial injection, RED is working on its talent acquisition, machine learning infrastructure, and user growth.
The attraction of foreign products
Ecommerce is booming around the world, led by China. The Middle Kingdom’s ecommerce industry is predicted to reach 1.8 trillion RMB by 2022 (259 billion USD). A major part of this growth is expected to come from CBEC (cross-border ecommerce), mainly focusing on the fashion and luxury goods segments. Foreign natural and organic products are equally popular and the only way to buy these products at the moment is through CBEC.
Now, you may not be surprised to read that RED is the first address for global luxury brands in China. With a population of more than 1.4 billion, the Chinese market is hungry for exclusive imported products like cosmetics, clothes and accessories, nutrition foods, organic, and health products. Why? Many Chinese associate better quality with foreign goods. Generally speaking, they are safer due to stricter standards and add to the elite flare of the Chinese buyer.
In the past, people who wanted to buy foreign products had to travel abroad themselves, or purchase them through a so-called Daigou (代购) - someone who lives abroad, buys products in bulk and sells them in their shops to China.
RED and other platforms like Tmall Global and JD Worldwide quickly became the better and more reliable options. Besides, consumers can research and buy from the brands directly, which increases the buyers’ trust. Finally, bonded warehouses in a free-trade zone or warehouses in Hong Kong speed up the CBEC delivery time and often reduce the cost.
The cross-border ecommerce landscape in China
Although RED has a relatively small market share compared to the cross-border ecommerce leaders - Alibaba’s Tmall Global (28%), Kaola (21%), Tencent’s JD.hk (14%) and VIP.com (10%), the Little Red Book has found its niche and place.
Maybe due to the strict government restrictions and censorship, the Chinese are generally hesitant to buy into advertisements from big official brands and their advertisements, which remind them of propaganda. Instead, Chinese consumers trust their peers and word of mouth more. This is why influencers like movie and music idols, KOLs, and Wanghongs have become the next big thing in Chinese marketing.
In 2019, Xiao Hong Shu introduced a live-streaming feature. This trend is taking off in 2020 on social media and online platforms in the Chinese market and around the world.
Xiao Hong Shu influencer & social marketing
Are you ready to launch your brand on China’s popular shopping app for foreign products? Here are the best strategies for social marketing in China via Xiao Hong Shu:
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Work with influencers
- UGC (user-generated content)is king! Leverage RED to engage Chinese consumers with authentic content from their trustworthy peers - Xiao Hong Shu influencers. An experienced China marketing agency can help you to save time and energy as well as money.
- The cost of working with influencers depends individually on the number of their followers and the quality of their content. It is wise to make sure they are not fake accounts with fake followers.
- Insider Tip: RED has become a spare-time activity for many young women in China. They go there for “window shopping” and use it as a sort of search engine, similar to how people use Pinterest. They browse, get inspired and entertained by something new and glamorous. Today, the Little Red Book is one of the top sources in the pre-purchase journey of Chinese consumers. However, the actual purchase often takes place on Tmall Global and WeChat. In China, almost exclusively QR codes (as photos) are used to link, for example, to a WeChat shop.
- Since last year, influencers also have to pay a commission of 15%-20% to Xiao Hong Shu.
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Open your own RED store
- Alternatively, you can open an official account for your brand. Currently, there are around 8,000 official brand accounts, including the major global players. Setting up a Xiao Hong Shu account can be challenging, as several documents are required, for example, your trademark registration. A digital & social marketing agency for China, who typically works with a local attorney in China, can help you with this.
- The commission is between 15-20% per sale. RED also requires a deposit of 20,000 RMB (2,900 USD), which is returned, if you close your store.
- Create engaging content, that helps your fans and followers to find out more about your products, comment and share them with their friends.
- Insider Tips
- Keep in mind that since the main goal of Xiao Hong Shu is to provide product reviews of goods and services, sharing posts with an obvious commercial or profit-making aspect (sponsored content) is not allowed. You can’t use descriptions like “the most”, “the best” or “high-end”. You are also not allowed to share reviews that link to external websites.
- Instead, provide added value with quality content and engage with your followers. Ask them to share your post with their friends, for example, on WeChat and Weibo. They can also like, bookmark and comment on your post. Popular content, for example, is a photo or short video with a make-up tutorial, a food recipe or a lucky-draw.
- Keep your SKU (stock keeping unit) aka the number of items in your store low. Focus on your top-selling hero items, and drive your traffic to Tmall Global, WeChat, and other ecommerce platforms we mentioned before.
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Xiao Hong Shu pre-purchase
- RED can also pre-purchase your products directly from you. The advantage is that you don’t have to set up your own shop and deal with marketing, customer support, claims, as well as refunds. This comes at a price, of course, depending on your business and products. Keep in mind that RED only accepts selected products that fit its strategy. Let a Chinese digital marketing agency facilitate this for you!
The Takeaway
Are you an international upscale brand, offering cosmetics, organic and health products, or travel services like tour guides? Are you considering entering the Chinese market and building your brand presence in the Middle Kingdom? Do it like Chanel and Dior with their innovative and inspiring approach on Xiao Hong Shu, the Little Red Book. Shine on the number-one social ecommerce app in China.
Discover the place to be for global luxury brands - RED, where generation Z and millennial females share their product reviews, focused on fashion and beauty. The authentic and community-focused content sets the Little Red Book apart from other Chinese social media and ecommerce platforms like Sina Weibo and WeChat.
Tenba Group is the China online marketing company of your choice! Leverage Xiao Hong Shu for your business now! Besides Xiao Hong Shu influencer & social marketing, we are your number one address for marketing advice for China. This includes how to sell products online in China, WeChat advertising, and Baidu SEO (the number one Chinese search engine).
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