Xiao Hong Shu (Little Red Book) is THE e-commerce cosmetics platform in China

 

A few years ago, when we asked Chinese participants in our studies which social media platforms they regularly use, we usually received two answers: WeChat and Weibo (similar to Twitter). But as time passes by, we now hear one name more and more often, especially from female participants: Xiao Hong Shu (“little red book”).

But what is Xiao Hong Shu?

It started as a platform for consumers to discover interesting things from abroad focusing on travel experiences and cosmetics.

Background:

Chinese people are known for being crazy about shopping when they are abroad, in Japan, Korea, in Europe and the US. You can see groups of Chinese tourists buying bags of products in shops when they are traveling overseas. The reason is that Chinese trust the quality of products in those developed countries, and it is expensive to purchase them in China because of the tax. So they would rather purchase a great amount of goods to save money.

Among all product categories, there is a particular one which requires good research because there are so many products: and that is make-up.

With this in mind, Xiao Hong Shu was brought unto the market with the slogan “Good things around the world” – aiming to help consumers discovering good (make-up) products from aboard.

Users of Xiao Hong Shu are posting their experience of make-up products from foreign brands, writing detailed reviews with photos and long texts. Slowly, this community was known for its high-quality content. These reviews are extremely attractive for two kind of readers: (1) women wanting to purchase products from a foreign brand but do not know which products are good and (2) female college students.

How it grows:

Unlike women in Japan, Korea, Europe, and the US, Chinese women are not allowed to wear make-up when they are at school. They are required to focus 100 % on their studies. Everything else, especially paying attention to appearance and outer beauty, is not appreciated by the teachers and parents. Also, having a romantic relationship is not allowed.

When girls come to college, they suddenly realize they are now allowed to wear make-up. With absolutely no knowledge about how to apply the make-up and which products they should purchase, they use Xiao Hong Shu to get informed and thus became the major users of the platform. Back then, the content in Xiao Hong Shu is written by ordinary people, not paid influencers which created trust among its users.

As there are more and more users asking where to buy the presented products Xiao Hong Shu started to build a logistics chain with partners in Japan, Korea and Australia. They work directly with big brands or famous big shops, allowing users to directly purchase products from aboard. Later, Xiao Hong Shu also cooperated with local brands in China and more and more women of different age groups joined the community.

How it works:

There are four major functions in Xiao Hong Shu:

• Explore (the landing page): It works similar to the explore page on Instagram and Pinterest, it also looks quite like it but with more text and sometimes video content. Users come to this page to kill time or get informed. The photos try to catch the eye of the user, the texts underneath show a truly detailed usage experience.
• Search: Knowing exactly what kind of product they want to learn more about, users search with keywords. Xiao Hong Shu also recommends further relevant keywords to help users to find more products.
• Purchase: After finding the searched product, users can directly purchase it on the platform.
• Notes (review): After using the product, users can write their own reviews and share them with the community.

What does that mean for business?

• A mature make-up product community already exists in China which assures cosmetic manufacturers a high conversion rate.
• Highly accurate target marketing: Every time, when users search for something, they are “stamped” with certain keywords, which makes target marketing much easier.
• Direct feedback with end-users: Manufactures can read detailed reviews from end-users to get new inspirations and improvement ideas for their products.

 

If you are interested in learning more about the Chinese consumers’ customer journey or consumer behavior in China, please contact Spiegel Institut. We conduct market research in China and we also offer workshops about the Chinese culture in Europe.

 

Author: Yue Liu, Spiegel Institut Mannheim