With the US Supreme Court seeming increasingly likely to uphold a law banning TikTok over national security concerns unless parent company ByteDance sells the platform to a non China based company by 19 January 2025, many of TikTok’s 170 million US users have been preemptively downloading Xiaohongshu.

In a twist no one saw coming, content creators say they are checking out the platform as a potential alternative to share their content and maintain their communities, while others have done it to point out the irony of being able to download and use other Chinese apps just days before TikTok could be removed from US app stores.

What is Xiaohongshu?

Xiaohongshu, also known as Red or Rednote in English, began life in 2013 as an online overseas travel guide for Chinese shoppers. Often compared to Instagram (but more realistically a blend of Instagram, Pinterest, Amazon and TripAdvisor), today, the platform incorporates a range of functions, including text and image posts, videos, live streaming, and social commerce. Targeting 18-to-35-year-old Chinese urban females, the platform is known for its strong interest-based communities and high-quality, trustworthy user-generated content. It has around 300 million monthly users.

Will Xiaohongshu become more popular than TikTok?

While Xiaohongshu’s current surge in US popularity is significant, with the number of posts on the app tagged ‘#tiktokrefugee’ now well over 60,000, it is likely to be relatively short-lived. The platform was not designed with English speakers in mind (although many bilingual Chinese users have shared guides for new US users), and it will take time for creators to build up the kind of communities that they had on TikTok. Moreover, the law banning TikTok states that any “foreign adversary controlled application”, like Xiaohongshu, faces a similar ban in future. Nonetheless, the trend underscores a growing user desire for diverse social media experiences and the resilience of online communities in the face of regulatory challenges.

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The last few years have seen the rapid growth of “social commerce” in China, a term that refers to the integration of shopping into social media platforms. China’s social commerce revolution has been led by Xiaohongshu (also known as Little Red Book) and ByteDance’s Douyin (China’s version of TikTok).

Traditional e-commerce on platforms like Taobao/Tmall, JD, Amazon or Rakuten depend on search-based journeys —consumers actively seek out products through search queries. This model relies on pre-established consumer intent and the consumer’s ability to navigate through extensive product listings.

Imagine a Chinese consumer who wants to buy protein powder – they will search for protein powder on Tmall, browse different products and prices, and ultimately make a purchase. Search engine marketing is thus essential for protein powder brands so that their product appears near the top of the search results. Cross-media campaigns stimulate demand for protein powder and help consumers to recognise a brand – but it is difficult to accurately attribute sales to these campaigns.

However, in the last few years, two of China’s most prominent social platforms – Douyin and Xiaohongshu – have introduced e-commerce functionalities creating a “preference-based” rather than search-based e-commerce model. These two platforms offer brands highly sophisticated tools to reach and convert target consumers.

Algorithms on these platforms serve product listings to users through engaging content formats such as short videos and livestreams, tailored to the users’ preferences and behaviours. This approach not only simplifies the discovery process but also enriches the shopping experience and stimulates spontaneous purchases.

For example, if a male user browses several exercise-related videos every day, Douyin can display product listings for protein powder, athletic apparel, or other supplements, and when the user sees those products offered to him for purchase, he can make the purchase instantly within the app. Once they are converted on one purchase, Douyin will expose that user to additional fitness, sports, and healthcare content and products. This same model is applied across all possible interests and product categories, from beauty to pets to baby products and beyond.

Apps like Douyin can continuously optimise for users’ interests and serve relevant ads. As a result, the app executes highly accurate product matching to the user’s interests, and therefore results in more conversions and repurchases. Douyin posted US$200 billion in GMV in 2022, up 80% from the year prior. For 2023, this is expected to be closer to $350 billion.

For brands, this preference-based system can be a more attractive model for reaching target consumers than simple search engine marketing.

Search engine marketing is a battle to capture existing demand for the users that have already decided to buy a given product, whereas social commerce has exciting potential for demand generation and an efficient means to reach target buyers.

In this new landscape, it is key for brands to maintain a consistent omni-channel presence. With a wider and shallower funnel, consumers are now discovering and buying brands across multiple platforms.

Traditional search-based marketplaces are still relevant and should play a prominent role in a brand’s e-commerce strategy. But social commerce innovations on Douyin and Xiaohongshu have redefined the boundaries of online shopping — and brands need to capitalise on these unprecedented opportunities to connect with consumers in more meaningful, engaging ways.

This article was provided by our content WPIC Marketing + Technologies, the headline sponsor of China Consumer 2024, CBBC’s flagship annual consumer conference.

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1. How to travel to China in 2022

Can you travel to China right now? The short answer is yes, but there are processes in place that you need to follow. Tom Simpson, CBBC’s Managing Director of China Operations and China Chief Representative, recounted his journey to China from the UK in August 2022 and shared important tips for those looking to do the same.

Note that as China’s zero covid apparatus starts to wind down at the end of 2022, the requirements for quarantine, testing and health codes are likely to change rapidly, so be sure to check before making travel plans.

2. How does Xiaohongshu work and why is it so popular?

Often compared to Instagram or Pinterest, Xiaohongshu (or RED in English) helps users discover and buy luxury, fashion and beauty products. What is notable about Xiaohongshu is that it has created an environment that allows consumer hype to drive exposure rather than the brands themselves setting the narrative. Fans come to the platform to hear the real story on foreign fashion brands or to get the inside scoop on beauty tips and tricks with the products they use every day from people they can relate to. With the cost of media in China ever-rising, using Xiaohongshu as a sandbox to find your brand’s community in China is a savvy way to test the market in 2022 and beyond.

3. The best 2022 Beijing Winter Olympics advertising campaigns

The Winter Olympics naturally generated plenty of column inches at the start of the year, but Focus was interested in how businesses interacted with the event. For example, major brands like Coca Cola and P&G created advertising campaigns that incorporated local Chinese elements — a trend that is likely here to stay in 2023 — while others turned to brand endorsements from the biggest star of the Winter Olympics, Eileen Gu. What’s more, simmering international tensions meant that brands had to think carefully about the tone and content of their advertising, something that will continue to be a key consideration when interacting with the Chinese market. 

4. China’s real estate crisis explained

China’s real estate sector used to be a key driver of the economy, but the tide turned in 2021-2022 and now it’s starting to drag. Failure to regulate the sector in boom has left the country with limited options in bust, and as a result, in 2022, UK companies were beginning to be impacted because Chinese partners were defaulting on their payments due to cash flow issues.

In November 2022, the Chinese authorities unveiled measures to rescue the struggling real estate sector, including credit support for indebted developers; however, in the long-run, ambitious structural reforms concerning how the developers work with local government, state-owned banks, and their customers will be required.

5. Are Gen Z Chinese consumers getting tired of the guochao trend?

The term guochao (国朝), meaning ‘national trend,’ refers to a trend in which young Chinese consumers are increasingly interested in the integration of traditional Chinese culture and style with domestic brands and products. Since 2018, brands like L’Oréal, KFC and Oreo have attempted to tap into this trend by showcasing designs and collaborations inspired by Chinese culture. However, a slew of unpopular collaborations and product launches show that to successfully navigate the guochao trend going forward, brands need to showcase a deeper understanding of Chinese culture and the preferences of their target audience, rather than simply sticking Chinese design elements on product packaging.

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Xiaohongshu (also known as Little Red Book or RED) is a thriving place for Chinese users to share product and brand experiences, provide and obtain recommendations and lifestyle tips, and most importantly, discover new products and brands. As one of the most popular platforms in China, Xiaohongshu currently has over 150 million monthly active users, which represents a 50% growth in traffic compared to January 2020.

The platform is known for its user-generated content, which feels trustworthy and authentic to viewers and can be utilised for word-of-mouth marketing. This feature is further enhanced by the algorithmic feed that shows users a combination of content from accounts they follow, trending content, content based on user interests and location-based content, making the platform perfect for product discovery. Moreover, due to this algorithm, posts on Xiaohongshu, called notes, tend to have a much longer lifespan compared to platforms such as WeChat. Notes will still generate new traffic a month after being published, although the cycle of when and how content boosts occur is hard to predict. On the other hand, the lifespan of content on WeChat usually lasts less than seven days, as it is only pushed to WeChat account followers, making it difficult to obtain organic traffic.

With that said, these are some of the top trends, insights, and strategy suggestions for Xiaohongshu for 2022.

Shift in user demographic

Although the platform demographic remains largely female, the percentage of male users has risen from under 10% a few years ago to almost 30% today. Despite the influx of male users, Xiaohongshu users remain young, with almost 75% under the age of 35 years old. Moreover, users on the platform tend to have higher purchasing power and over 50% come from Tier 1 and Tier 2 cities, including Shanghai, Beijing and Guangzhou.

These demographic shifts present new opportunities for brands and categories, with more male-dominated content having a chance to become popular on the platform and reach the relevant audience.

Top categories on Xiaohongshu

As seen in the graphs above, by the end of 2021, the top categories when it came to notes posted on Xiaohongshu included gourmet and food, beauty, entertainment, travel, home furnishings, and education. More typically male-dominated categories such as gaming and auto are showing rapid growth.

A more recent trend from 2022 is the rise of fitness and exercise content, which became popular after the 2022 Beijing Winter Olympics and the lockdowns in China. As a result, more Chinese consumers have become interested in maintaining their health at home, which has caused a surge in notes on Xiaohongshu related to athleisure clothing, home workout equipment, exercise suggestions, etc.

Notes related to beauty remain very popular on the platform, even as the category’s growth rate drops. Top keywords within this category include efficient skincare, effective skincare, gender-neutral products, functional skincare and make-up, and men’s beauty.

How to increase purchase desire and conversion rates

Consumer behaviour on Xiaohongshu indicates that after product discovery, users will leave the platform to make their purchases on other platforms such as Tmall and JD. As a result, the market share of Xiaohongshu in-app stores is declining. However, word of mouth marketing on Xiaohongshu has still proven to be effective at driving sales for brands through their other online sales channels, generating a positive return on investments and continued improvements in store performance.

Dealing with the increased demand for authenticity

Content on Xiaohongshu should include ‘lifestyle’ photos or videos that appear more natural, less commercial and include people who look Chinese. The content should emphasise the people, the products and the environment to build a sense of authenticity. Working with KOLs and KOCs on the platform is a key strategy for increasing brand awareness and reputation, even though the costs of collaborations are rising and KOLs are becoming more saturated on the platform. Reusing content from KOLs and KOCs after permission has been obtained is also highly suggested.

Testing for success

Xiaohongshu has no daily posting limit, which means that there is a lot of space for testing and optimising. Brands can test different types of posts, including professional photoshoots, more natural at-home photos, product-only pictures and graphic illustrations to determine which types of posts perform better. These same tests can be done for different keywords, although brands should also use trending or top-ranked keywords within the relevant categories where possible. Through the results obtained, brands can continually optimise their content.

As can be seen, despite shifts in user demographics and top categories on Xiaohongshu, it remains a crucial platform for brands to utilise when marketing and expanding their presence in China. When developing a strategy for Xiaohongshu, brands need to keep in mind who their target audience is, how to meet their demands and how to attract their attention on a highly competitive and increasingly saturated platform.

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Comparing Chinese platforms to those we are familiar with in the West often provides a helpful analogy for understanding the way they work: WeChat and WhatsApp; Tmall and Amazon; Douyin and TikTok. However, the reality is often quite different from the analogy; most of the Chinese platforms mentioned may have started out conceptually similar to their Western counterparts, but they have evolved to incorporate a much more dynamic and multi-faceted set of functions and utilities. Even Douyin is light years ahead of TikTok in terms of e-commerce, and they are owned by the same company. One of the rising forces in Chinese eCommerce that you may have heard a lot about recently is the ‘Instagram of China’ Xiaohongshu (aka Little Red Book or RED). 

But once again the comparison does not do the Chinese platform justice. RED started off more like Pinterest, a lookbook platform for users to mostly list and share images of their favourite fashion and beauty items with friends. But today, RED is much more than content. Targeting 18-to-35-year-old Chinese urban females, the platform helps users discover and buy luxury, fashion and beauty products from overseas as well as share shopping tips and swap fashion ideas. Over 50% of RED users are under 30 years old, and more than 80% of them are female. 56% live in first and second tier cities. More than 50% belong to the upper-middle and middle classes.

As with most successful social media and content platforms, RED has introduced commerce to the platform, allowing users to either buy directly from a brand-owned RED store, or by linking externally to a Tmall or WeChat store to purchase. But user generated content (UGC) is still the lifeblood of RED, so when it comes to standing out and succeeding on RED, recommendations are everything. To get brand exposure, it is not about how much you pay, but how big is your brand’s tribe of followers. 

The RED ‘tribal commerce’ cycle

Fueling the tribal commerce engine: Trust + proximity + interest

Content may be king on RED, but everything is still geared to push you to buy stuff. From live streaming to image galleries and videos, influencers, independent labels or everyday bloggers use RED to recommend products, services or experiences to their peers.

The platform is designed to push you content that indexes against your preferences and profile. There’s “Follow,” which brings you a feed of the latest posts from accounts you follow; “Explore,” which shows curated posts based on what you’ve browsed; and “Nearby,” which features posts from creators geographically near you. Compared to Instagram, “Xiaohongshu is more open,” said Zoe Lu, project manager at strategic research agency Daxue Consulting. It’s less about subscribing to particular creators. Instead, an AI-powered algorithm shows you videos the app thinks you might be interested in.

To get brand exposure on RED, it is not about how much you pay, but how big your brand’s tribe of followers is.

For any platform that is heavily reliant on UGC, fakes and fraudulent behaviour are constant challenges to credibility, so trust is something that RED takes very seriously. So much so that late last year, nearly 30 brand users on RED woke up to find their accounts being limited by the platform after having been found to “have been severely involved in false marketing.” The brands were caught on suspicion of recruiting a somewhat mysterious group known as the ‘internet water army’ – a group of social media users that pose as fans of brands to post positive content about their products and boost exposure. 

Thanks to its engaging features and crackdown on bad behaviour, RED has successfully reinforced this feeling of trust, safety and belonging to a community of like-minded friends. A sizeable proportion of consumers are opening the app up to seven times a day. Brands’ awareness and reputation can quickly catch on fire as their message spreads through a set of fans who get joy from sharing and talking about their products. 

Finding your brand’s community amongst 1.4 billion people

In 2020, the Covid-19 pandemic meant that the lion’s share of purchasing behaviours shifted online almost overnight, and e-commerce saw the equivalent of 10 years of growth in just three months. Today we are at the cusp of another fundamental shift in the world of commerce. On the consumer side, the most innovative retailers have realised that they need to deliver a purchasing experience wherever the consumer is — whether that is in a mobile app, social feed, text thread, live video shopping or in-store. It can be so difficult to get a 360 degree view of your customer base in a market the size of China with such a varied digital landscape that brands can waste a lot of money spreading themselves too thin without knowing who their community is and what they think of their products.

The RED homepage, where users can discover algorithm-recommended content or content from accounts they follow

RED has created an environment that allows consumer hype to drive exposure rather than the brands themselves setting the narrative. Fans come to the platform to hear the real story on foreign fashion brands or to get the inside scoop on beauty tips and tricks with the products they use every day from people they can relate to. With the cost of media in China ever-rising, using RED as a sandbox to find your brand’s community in China is a savvy way to test the market. 

Whether it is identifying the right price point for your products or the selection of SKUs you choose to launch with in-market, RED’s community is a vibrant and fruitful place for brands to get real-time feedback from real fans. In a market of 1.4 billion people, selling products isn’t the hard bit, finding the foundation of fans that will define how your brand develops in China is the key to succeeding in the long term, and RED might just be where to find them. 

Call +44 (0)20 7802 2000 or email enquiries@cbbc.org now to find out how CBBC can help you identify the right social media platform for your brand and target market in China. 

Mark Bellamy, General Manager, EMEA, Aiken Digital
Mark has spent a decade working in advertising, eCommerce and digital consulting between both Europe and APAC, spending the last five years working with brands in search of growth to harness the best of what China has to offer. With the help of Aiken Digital’s global strategy team, Mark directs brands to the right models for implementing sustainable growth in the market.

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