Nowadays, internet platforms are becoming more important for young people to consume. Social platforms like Little Red Book have shortened the distance between brands and consumers. Qu Fang, founder of Little Red Book, said ” the original intention of Little Red Book is introducing good foreign brands to Chinese consumers and recommending good Chinese brands to foreign consumers”. According to a Marketing report by Xiaohongshu, there are over 140,000 brands on Little Red Book and 56 % of them are domestic brands as of January 2023.
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First of all, what is Little Red Book?
Little Red Book (Xiaohongshu) is a lifestyle sharing and purchasing decision-making platform. It allows users to share short videos and photos about fashion, beauty, food, travel, and much more. Founded by Mao Wenchao and Qu Fang in 2013, Little Red Book remains one of the most popular social platforms in China. In 2019, the authoritative American business media “Fast Company” selected the best innovative companies in China, and Little Red Book ranked in the top three following Meituan and Alibaba, becoming the only new unicorn company within the top three.
Who are Little Red Book’s users?
According to Qiangua’s 2022 XiaoHongshu Active User Portrait Trend Report, the number of monthly active users of Little Red Book reached 200 million in 2022, with 72% of users being born in the 1990s. Users from first – and second-tier cities accounted for 90% of the total. Among Little Red Book users, female and male users account for 88.8 % and 11.2 % respectively. In order to expand the proportion of male users, Little Red Book has made continuous efforts, launching the “Men’s content Incentive Plan” in 2021, which provides support for content preferred by male users, including digital, fashion, sports and automobiles. However, according to the current data, the proportion of male users of Little Red Book is still low.
The evolution of Little Red Book in China
From a shopping guide to a community to e-commerce
It all started in Hongkong, one of the favorite overseas travel destinations for mainland Chinese people. Despite the western ambiance and exquisite Cantonese cuisine, one of the main purposes of travel was shopping.
Yet, due to the language barrier and lack of knowledge about foreign brands, many Chinese travelers were wondering, “Which handbag should I buy as my first luxury item? Which skin moisturizer is worth a try? How can I do a tax-refund?” Little Red Book co-founder Mao saw that information gap and started the first version of Little Red Book – Little Red Book Hongkong Shopping Guide – offering shopping-related information for mainland Chinese consumers from those who traveled or lived in Hongkong.
Chinese consumers do thorough pre-purchase research, especially for overseas products
A couple of months later, more and more user-generated content about shopping overseas had been shared and it was not just limited to Hongkong. Shopping experiences in other countries such as Thailand, South Korea, and Japan were also being exchanged and discussed on the platform. Seeing that, the company decided to adapt the name to Little Red Book Shopping Notes. After obtaining all the knowledge about foreign brands and “window shopping” the products from all over the world, Little Red Book users were eager to purchase the goods they have learned about. In late 2014, Little Red Book built up its own e-commerce ecosystem, turning into a social platform/e-commerce hybrid.
The value of Little Red Book app in the daily life of Chinese consumers
Users often search for reviews and recommendations on RED before they make purchasing decisions. Some people simply use Little Red Book for “window shopping”, searching for fashion inspiration for things like clothing and hairstyles. Little Red Book has become a very important step along many Chinese consumers’ pre-purchase journey. Moreover, many Chinese young women browse the app as a leisure time activity, to get inspired and entertained by something new, funny, or glamorous.
How international brands can leverage Little Red Book in China
Similar to famous platforms like WeChat and Weibo, foreign companies can set up an official brand account on Little Red Book in China as well. Brands need to submit various documents such as business registration for verification and depending on the product category, required documents can be different. In recent years, more and more brands have joined Little Red Book platform. Especially some well-known luxury brands, such as Louis Vuitton, DIOR, Gucci, Prada, Celine, and Balenciaga, have all opened Little Red Book accounts.
Working with KOLs and KOCs: Online influencers in China
Even if a brand has neither an official account nor a shop selling its products on Little Red Book, it could still be very beneficial to leverage this app to engage with Chinese consumers. Working with KOLs and KOCs is crucial in China since Chinese consumers assume that online influencers are more trustworthy than “official” ads.
In China, KOL marketing is one of the main ways that brands are using to reach their target audience. KOL stands for Key Opinion Leader, who can settle new trends, widen a brand’s audience, increase brand awareness, and motivate customers to purchase from online and offline channels. In 2020, KOLs influenced 48% of interviewed Gen Z shoppers. When collaborating with a KOL, it is of major importance to find the right person, whose image is compatible with your brand and whose followers are your target groups. The simplest way to reach out to a KOL is by sending them free samples of your product.
Meanwhile, as Chinese consumers are increasingly sensitive to authenticity, KOC marketing is also a great way worth considering. KOCs, also known as Key Opinion Consumers, are the micro-influencers of China. The main benefit of collaborating with KOCs on Little Red Book in China is that they are perceived as more authentic, they are more loyal to a brand, and much less expensive. However, a KOC’s influence is minimal compared to a KOL. The infographic below weighs pros and cons of both KOLs and KOCs.
Live streaming: a new traffic entrance
The Chinese social-commerce platform launched its live-streaming function in March 2020.
During the Spring Festival in 2021, the live-streaming of Little Red Book rose sharply compared to the previous year, with an average daily click-through rate of 17.53%. In total, the estimated sales of live streamed goods were 198 million RMB, and the average unit price was over 100 RMB. Compared to the live streaming of other e-commerce platforms, Little Red Book has a higher sale price, higher repeat purchase rate, and lower refund rates.
An important factor for Little Red Book’s success in live streaming is the high stickiness of KOL fans. Before the launch of live-streaming, KOLs have already kept a good interaction with fans. This provides a solid platform for successful live steaming. Even without Li Jiaqi (the top KOLs of Taobao), Little Red Book still attracts many brands and KOCs to live stream and get in touch with followers directly. More importantly, Little Red Book is good at training quality KOCs and create loyal customers.
Is Little Red Book in China the right place for your brand?
- Little Red Book’s user base is mainly composed of young affluent women living in the urban areas. However, this may be different in the near future because of the increasing number of users in low-tier cities.
- Compared to “traditional” advertisements, content on Little Red Book appears more trustworthy for Chinese youngsters. It is an ideal place to create word of mouth and increase brand awareness, especially for smaller or lesser-known brands.
- Little Red Book could be especially useful for niche / lesser-known brands since a large number of consumers used such platform to search for content regarding brands or products they are not familiar with.
- Little Red Book is a great place to partner with KOLs, make sure you find the right KOL based on their content and audience and not just their personal profile.
- Nevertheless, brands should be careful of celebrity endorsements. Chinese consumers are getting more and more alert to “recommendation” which appears “too commercial”.
