“In China, they get to monetization much faster than the west. You need to get your hands dirty, as retail is always one click away.”
This is what exactly holding most of the western companies back, Charlwin Mao talked in an interview with American magazine Wired, who is the co-founder of Xiaohongshu.
He told Wired, “If the best way to deliver experience is to have direct sourcing, do that. If you have to work with government, do that, we built a government relations team with 20 employees. These are things western companies tend to stay away from. In China, to build a successful business you don’t have a choice.”
Created in 2014, Xiaohongshu, also known as Little Red Book. In Chinese, “Red” has varied positive meanings, such as hot, popular and the best. Expectedly, Xiaohongshu has become the fastest-growing and successful social commerce platform.
Leading social networking apps in the Apple App Store worldwide in March 2019, by number of downloads (in millions)
After 5 years of development, Xiaohongshu is not only changing the way that Chinese Millenniums buying products both in-board and cross-board but also influencing their lifestyle as a further consequence.
By late 2018, Xiaohongshu had attracted 100 million users and a monthly 30 million active users, and crucially, 80-90% of these users are middle or upper-class women in first-tier cities like Beijing, Shanghai, Guangzhou, Shenzhen with good education background and a respectable income. Which largely distinguish itself from other popular social and e-commerce Apps like Douyin(TikTok) and Pinduoduo, which are more aimed at Millenniums from 4th or 5th tier cities in rural China.
As a social commerce App, obviously, social content and brand e-shops are the two main components of Xiaohongshu. Whereas, there is something makes the contents of Xiaohongshu different from other social media platforms and E-commerce websites, which is “Biji”, this is not just a dispensable name for its contents, “Biji” means “Notes”, it stands for something more professional, authentic and genuine than other social contents. In this condition, users who write a Biji must be more responsible and follow certain rules, since the content regulations of Xiaohongshu are really strict, it doesn’t allow anonymous contents, reviews, and one-click ratings, it has a specific attitude and measures towards fake engagement and fake account, for example, if you buy fake followers, likes or comments, your relevant Biji will be deleted and your account may be suspended.
With its strong focus on content integrity, Xiaohongshu Biji has made it clearer for users to know whether they’re viewing trusted user-generated content or a word of mouth advertising or a paid Biji ad (KOLs must register any paid promotional links with brands).
For a new user, you can select some interests, such as fashion, beauty, luxury, travel, etc. at your first login in, then these relevant Biji will be pushed on your homepage, you can scroll down to view more or use the search box to explore more precise Biji, or follow the accounts you’re interested in, or view Biji based on your geo-location by click “Nearby” button, all these functions are similar to any other social media platforms. In fact, users have described Xiaohongshu as a product search engine, or “like Instagram and Pinterest sprinkled with a dose of Taobao”.
Due to this unique UGC(User-Generated Content) strategy and its incredible demographic user distribution, Xiaohongshu is definitely an ideal platform for global fashion, high-end cosmetics, niche beauty brands, etc.
That’s why Charlwin Mao mentioned, “We don’t ask ourselves if we’re a social or a commerce company. We ask, ‘What does the customer want?’, If the customer wants it, you do it.”
The social side and commerce side of Xiaohongshu flow seamlessly from each other, on the one side, users can insert product links into their Biji when the brand has an official flagship store on Xiaohongshu Store, on the other side, under the product page, there is Biji from other Xiaohongshu users. No external links are permitted, which allows the platform to keep users and provides brands with an effective internal conversion between the social contents and product pages.
For any interested brands outside China, Xiaohongshu provides perfect logistic service from 60 days free warehouse in Hongkong, Europe, the U.S., Australia, etc. to the last mile delivery in mainland China. So that foreign company just need to provide their foreign company registry, and foreign bank account, then they can do cross-board commerce and open their market in China. Chinese customers will pay by like Alipay or WeChat Payment, but Xiaohongshu will convert it into U.S. dollar for the company. To do this, the 10-15% commission will be charged, and no fixed fee charged.
In my point of view, if you’re a small-medium niche foreign brand, especially cosmetic, beauty or fashion brands, Xiaohongshu is definitely a good social commerce platform for you to start your first step in the Chinese market. First of all, you can start your pre-launching contents-Biji via working with regular accounts for quantity and KOL accounts for quality to make some noises. Secondly, register your own official account to collect relevant contents on your board.
Consequently, open your official flagship store on Xiaohongshu Store to smooth the way for your potential customers. After increasing the selling, you will have more Biji to attract more users, so that you will have more customers and sales, with this, a positive circle will be created.