THE INCREDIBLE GROWTH OF XIAOHONGSHU:

THE MOST POWERFUL SOCIAL COMMERCE PLATFORM TO ENGAGE YOUNG CONSUMERS IN CHINA

May 18, 2020

Written by Stefano Bocchini

What is Xiaohongshu?

Xiaohongshu 小红书, or RED as it is called in English, is among the top social commerce platforms in China and also one of the most largely used platform for cross-border e-commerce.

The app has been defined as a hybrid between Instagram, Amazon, and Pinterest in the Western world, and this mix is so is so peculiar and different from what we are used to that the Xiaohongshu could embody the business model to follow in the future for app creators interested in developing a cross-border social commerce platform.

How does Xiaohongshu work?

Despite the interface may look like those of Instagram or Pinterest, Xiaohongshu is different, because it offers the possibility to search, purchase, and socialize at the same time in one single app.

Users can look for a product, check out the reviews and buy it while also see their friends or favourite influencers social updates. Everyone can create content and post them on its social account, but usually these posts are more informational and detailed than in other social media platforms, almost wrote in a review format. Through the use of tags, it is possible to see what products are used and directly access it or access the store of the brand to see and buy different products.

Xiaohongshu interface

Xiaohongshu interface

An user of Xiaohongshu with tags on clothes she are waering linking to different products in different stores

Tags linking to different products’ stores

Nike official store page

One could argue that also Instagram offers this feature, but the real difference is that the online shopping service is owned by Xiaohongshu. The app has a built-in e-commerce platform with self-operated stores and also stores operated by registered brands. Thus, Xiaohongshu somewhat acts as a middleman for companies not big enough to manage online stores, and sell selected goods to its customers while also allowing licensed brands to register and sell their products directly on its online store.

Users number and demographic

Since its establishment in 2013, the company had an extraordinary growth. As of March 2019, Xiaohongshu sells more than 200,000 SKU (10,000 more than the previous two years).

According to the Xiaohongshu itself, in July 2019 the company registered more than 300 million users, 70% of which born in the post-90s, and MAU (monthly active users) made a break-through of 100 million.

As for the gender distribution, the vast majority of users are female (79%) against only 21% of males (link).

Number of registered users of Xiaohongshu in China from 2015 to 2019

Bar chart showing the increase of number of registered users on Xiaohongshu from 2015 to 2019

Source: Statista 2020

What is the youngest generation interested in on Xiaohongshu?

Earlier this year the company published a report precisely with regard to Chinese Generation Z (those born after 1995) users and their habits.

What emerged is that this segment is paying more attention to the job market, with an increase of work-related posts by 13.59% in the second half of 2019 in comparison to the first half. The top 10 of these posts included “Handbags for work”, “Shoes for work”, “Suits for work”, “Perfumes for work”, and “Work outfits” and so on.

In the same period, the new posts and search volume for Chinese domestic brands increased respectively by 22.26% and 23.16%; for ingredients of skincare products by 17.2% and 29.9%, and for sports, the most discussed topics were losing weight, yoga, and fitness with an increase of 37.9%. Furthermore, the new posts for Chinese traditional costumes and blind box increased respectively by 47.3% and 293.4%.

Finally, Chinese young consumers showed a huge interest in travelling, with 713.7% of search volume increase of travelling tips since the first half of 2019.

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