Life-sharing Platform Xiaohongshu Gaining More Influence among Chinese Youth

Xiaohongshu is an e-commerce platform for young people to share their lifestyles. By sharing the lives of its users, Xiaohongshu has led the trend of consumer sharing and consumption, and has rapidly grown into the top community e-commerce platform in China. As of November 2021, Xiaohongshu has more than 200 million monthly active users and a valuation of more than $20 billion, and has been named to the Hurun Global Unicorn Index for three consecutive years.

Young consumer as main target

Xiaohongshu focuses on young consumers in first- and second-tier cities. According to the “Xiaohongshu New Consumption Research Ideas and Practices Special Analysis Report” released by Sinolink Securities in March 2022, Young users aged 30 and below account for 78 percent of Xiaohongshu’s users, while female users account for 89 percent, and 90% of users are in first- and second-tier cities (as shown in Figures). This consumer group is fashionable, young, individualized, attaches importance to the quality and value of goods, and focuses on the consumption experience.

Sources: Sinolink Securities

Xiaohongshu generates a large amount of interesting and practical UGC (user-generated content) every day, which provides reference for users’ consumption decisions through lifestyle sharing, thus attracting more young urban people to join the platform, and linking users with the same interests to form various consumer communities.

At the same time, Xiaohongshu has insight into consumer trends and attracts a vast number of emerging brands to the platform. This has facilitated the interaction between consumers, brands and content creators.  Xiaohongshu does not chase trends, but continues to lead them by sharing lifestyles. The platform’s endless emergence of trendy topics such as “OOTD” (Outfit of the Day), “Store Visiting” and “Camping” not only caters to the fashionable and personalized needs of urban youth, but also drives the rapid growth of a number of new brands through the new lifestyles shared by users.

Sources: Sinolink Securities

Personalized and accurate recommendations for young users

Most consumers will first look at user reviews when shopping online, because they reflect the real consumption scenario and experience. Good products can reach and impress more consumers through word-of-mouth communication. The uniqueness of Xiaohongshu platform lies in: First, it improves the conversion rate of content marketing through the word-of-mouth effect of users’ recommended products. Xiaohongshu has built a community of real user sharing, and the whole community is a huge user word-of-mouth database. Second, precise selection through big data. Xiaohongshu makes full use of the large amount of user data accumulated by the platform to analyze and predict user needs and achieve precise product selection.

Since 2016, Xiaohongshu has changed its content recommendation from manual operation to automatic distribution by machines and algorithms. Xiaohongshu uses big data analysis technology to precisely identify target users and utilizes artificial intelligence technology to distribute different contents to corresponding users to achieve precise marketing. At the same time, with advanced data acquisition and dynamic tracking technology, Xiaohongshu inspects the changes of consumer demand preferences and carries out product customization innovation jointly with brands.

Conduct both online and offline activities

In addition to the online e-commerce community, Xiaohongshu also follows the hot trends and holds various brand marketing activities which link online and offline to promote face-to-face communication between brands and consumers. In 2020, due to the impact of the epidemic COVID-19, Xiaohongshu suspended offline brand marketing activities. In 2021, with the improvement of the pandemic situation, Xiaohongshu held colorful offline brand marketing activities.

In April 2021, Xiaohongshu held a large-scale themed campaign combining online and offline “Cherry Blossom Season in Warm Spring “, which attracted many youthful users to participate. The campaign released famous cherry blossom viewing spots in ten cities, including Wuhan, Shanghai, Qingdao, Nanjing, Wuxi and Hangzhou, and provided users with informative travel, photo and note creation strategies, and guided and encouraged users to publish their cherry blossom viewing experience notes, which received a lot of likes and favorites.

Some insights

In terms of content, Xiaohongshu has encompassed various fields of lifestyle, generating a large amount of high-quality UGC content every day and using big data and artificial intelligence technology to distribute it to interested users. In the area of social networking, Xiaohongshu provides a convenient channel for consumers to recommend their favorite products to each other. The Xiaohongshu community brings together consumers with common interests. The rich and diverse community activities enhance the emotional connection between users.

In terms of livestreaming e-commerce, Xiaohongshu has attracted a number of celebrities and high-quality livestreamers to join, and high-quality creators continue to join in to strengthen the connection with consumers, thus promoting the development of the platform’s e-commerce business.