China’s digital platforms are acing social commerce in ways Western social media can only dream of. While platforms popular with Western consumers have yet to get social shopping off the ground, a number of China’s domestic sites enjoy a thriving social-commerce culture.
There are several stand-out platforms in Chinese social eCommerce. WeChat’s universally popular messaging app makes it easy to shop with JD.com and elsewhere using integrated e-wallets. Chinese consumers are addicted to cheap deals on homewares on the explosively popular Pinduoduo app, a kind of online bargain-hunting tool for group buyers.
At the more aspirational end of the market, Xiaohongshu offers luxury fashion and top-end beauty products to a wealthy audience looking to treat themselves.
Meaning ‘Little Red Book,’ Xiaohongshu is a luxury app that connects wealthy Chinese audiences to overseas brands and one other. Like Pinduoduo, it links browsers to people who share their interests, and the goods featured here are highly exclusive.
Buying agents
To understand the success of Xiaohongshu, you must understand its origins. Originally, the app was conceived with the simple goal of connecting Chinese citizens with buying agents who could source goods on overseas buying trips. This commission-based service, known as Daigou, used to be the main way Chinese people would source foreign-branded goods.
In the few years since ‘Red’ was established, buyers are much more likely to make the trips themselves or buy locally. Brands, particularly luxury brands, are much more established in China today as compared to even 2013 when the app was launched, and people are much more likely to head overseas to do their own shopping.
Since Chinese consumers are highly suspicious of being tricked by online vendors, Xiaohongshu’s success lies partly in the ability to add confidence to what and where they buy. The site features many reviews and users can post videos and pictures to show off their purchases.
Xiaohongshu was originally created for users to review products they purchased overseas to share their shopping experiences online.
Social-media tools help users spread the word about where they bought an item so others can find and confidently buy the same thing from the same place. No external links are permitted, which helps boost confidence in purchase sources.
In a highly collectivist society, Xiaohongshu also offers social reassurance that users are favoring the right kind of brand and product.
Fitting in is important in China, and consumers who haven’t been wealthy for very long are anxious to be seen making the right consumer choices. Xiaohongshu supports this by showing what their peers approve of and helping direct aspirations.
Chinese society is racing to catch up with the pace of economic improvement. Consumer sophistication is evolving quickly, leading to discussions about the merits of various goods. This includes discussions about the effectiveness of various beauty products and treatments, the virtues of particular consumer electronics, and which is the most desirable stroller, purse, or vacation.
Consumers are connected to a network of conversations about brands and products, and they’re often highly committed to product discovery and assessing different providers and vendors.
The Red Book identified this high level of commitment early on. A sizeable proportion of consumers was opening the app up to seven times a day. The founders quickly adapted to this demand for products and product knowledge by offering users the chance to buy from them directly. What started as an app to recommend products soon became an eCommerce platform for buying them.
Role of influencers
It’s important not to underestimate the importance of influencers in China. These celebrities play an important role in driving consumer confidence and drawing attention to new products and behaviors.
Xiaohongshu incorporates influencers in a way that gives them huge influence on the platform. If your brand is in beauty or fashion, it’s pretty essential to get the support of influencers, and Xiaohongshu is certainly a place where this influence can be most effective.
Highly popular actress Fan BingBing, for example, is the Kim Kardashian of Xiaohongshu; the products she recommends can sell out immediately.
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Don’t mistake Xiaohongshu for just another shopping app. It’s far more focused on discussing products than forcing them on consumers, and it concentrates on trends and matching consumers to the right product as opposed to price and making a quick sale.
Nevertheless, conversion rates on the platform are extremely high, and the support of a key influencer can really affect the sales of a product or beauty habit.
Little Red Book has a user base that’s generally young, female, and relatively wealthy. The community tends to be highly engaged and there’s a high level of confidence in the recommendations made via the platform–which translates into high conversion rates.
It has succeeded by giving users what they want: confidence in the community and products featured there. That seems to be the essence of the platform’s success. Not only has the Little Red Book been willing to evolve to suit changing times, it’s also always managed to give users exactly what they want.