You may or may not have heard about XiaohHongShu in recent times. It’s currently the most talked about app in China. But what is it exactly? In this series of three articles we will tell you more about this fascinating app.
What is XiaoHongShu?
XiaoHongShu (小红书), which can be literally interpreted as “Little red book” in Chinese, is a social e-commerce shopping app headquartered in Shanghai. Mainly focusing on 18-to-35-year-old Chinese urban females, the platform enables customers to discover and purchase luxury, fashion and beauty products from outside China. They can also share shopping tips and exchange ideas.
The numbers are impressive. By the end of 2017, XiaoHongShu’s user base had explosively grown to over 70 million, with an average monthly active user base of 15.4 million. It ranked as the Top 1 out of all the cross-border e-commerce platforms in China’s App Store. In 2016, XiaoHongShu completed its Round C financing of 100 million USD from Tencent, Genesis Capital and Tiantu Cpital, while being evaluated at 1 billion USD. Few months ago, it raised another 300 million USD from investors led by Alibaba. Several days before, XiaoHongShu just celebrated its fifth year of operation.
How did such a young platform scale up so fast in the last years, surviving against strong cross-border e-commerce dominants like Tmall International (Alibaba) and JD Global (JD)?
XiaoHongShu’s success originated from the development of trust between consumers and platforms. If we look at the history of XiaoHongShu, it was originally designed as a UGC (user generated content) social sharing platform. It grew bigger even during the period that Weibo and WeChat had already dominated mass Chinese consumers’ digital social life. XiaoHongShu’s success can be summarized into 3 points:
- Xiaohongshu entered with a sharp position of targeting young, urban (especially large cities like Beijing and Shanghai) female’s unmet desire of discovering and sharing shopping lists and experiences while travelling outside China.
- Most young female customers regard XiaoHongShu to be the best social platform that could satisfy their desire of sharing shopping experiences, while for instance Wechat Moments is more targeted towards sharing within private social networks.
- XiaoHongShu formed a large group of females who enjoy luxury or fashion shopping and sharing, bringing feelings of trust, safety and being embraced to its target customers. Reinforced by the network effect of XiaoHongShu’s origin as a social platform, they were able to scale up quickly as a social sharing platform of global shopping experience.
Further growth of XiaoHongShu
By the end of 2014, XiaoHongShu launched its cross-border e-commerce business. Instead of choosing a marketplace model, XiaoHongShu took all products as own stock with quality assurance in order to strengthen the feeling of trust.
The user experience is regarded as very efficient and smooth. When looking for a new product, users are inclined to open XiaoHongShu to search for a certain global fashion/beauty product, go over different reviews generated by KOLs and other customers, make the decision and then directly buy the product from XiaoHongShu.
As the platform also increased the number of male users, XiaoHongShu has accumulated a large amount of social and consumption data of Chinese urban young people. The platform has been using big data analyses to better understand them, improve the accuracy of shopping post/product push, and ultimately improving the development of its original social sharing platform.
In the next article we will elaborate on how to leverage the platform and share a few cases of overseas companies selling on XiaoHongShu. Would you like to know more about how to sell on XiaoHongShu? Drop us an email at firstname.lastname@example.org.