Little Red Book, aka XiaoHongShu (小红书), is a Chinese social shopping app that is quickly gaining traction with Western brands. The app assists 200 million users to discover and purchase luxury fashion and beauty products from overseas.
Social shopping, a hybrid of social media and ecommerce, is expected to account for 15% of all online sales in China by 2022.
Western brands looking to grow their presence in the Chinese market should consider social shopping channels such as Little Red Book to complement their presence on marketplaces such as Tmall.
Little Red Book boasted RMB 1.49 billion in revenues in 2018, with 6% market share of cross-border ecommerce into China. The app hosts 8000 verified brands and 4800 key opinion leaders. The primary product categories sold are cosmetics, clothing, mom/baby products, nutrition, fitness gear and vitamins.
To date, 87% of urban Chinese consumers have participated in social shopping, with young consumers particularly favouring social commerce over traditional ecommerce platforms. As may be expected, the core user demographic of Little Red Book is young (18-35 year old) affluent women living in urban areas, specifically tier 1 and 2 Chinese cities. On average, each user makes 3 purchases a month via the app.
There are two interconnected ways in which brands can leverage Little Red Book:
As a social platform to enhance brand visibility and build relationships with potential consumers. Chinese consumers will often search for reviews and recommendations before making purchasing decisions making the app an important touch point in the pre-purchase customer journey.
As an ecommerce sales channel to sell products. The app also offers a seamless shopping experience with its ecommerce integration by linking product posts to the relevant brands sales pages.
The platform offers particularly high conversion rates - 8% of Little Red Book's users will place an order after reading reviews and recommendations, compared with 2.6% of shoppers on Tmall.
In May this year, one of LVMH’s leading labels, Louis Vuitton listed on Little Red Book. The brand launched with a series of posts including video content narrated by Chinese opinion leaders discussing functional and design features of its handbag and clutch collection.
Other high-profile brands listed on the app include Dior, Vivienne Westwood, MaxMara, Hugo Boss and GNC supplements.
The app is founded on user-generated content consisting of authentic product reviews with a highly personal tone of voice which make users feel as if they are chatting among friends. Posts typically have four styles of content:
Discussion of how products can improve aspects of consumers daily life (e.g. mix product reviews with lifestyle storytelling).
Product insights (e.g. before/after reviews, performance tracking, how-to guides).
Products as a solution to customer pain points.
Content related to popular culture trends (e.g. entertainment industry references).
All product posts must contain a 10-15 word title, along with 5-9 images or a video content (preference is given to videos). Posts are also expected to contain insightful captions and hashtags to optimise product discovery for users.
In China, 67% of consumers are influenced by KOLs during their customer journey; whereas only 23% of consumers are influenced by a brand spokesperson.
Little Red Book is committed to providing a platform for the content of high-profile KOLs. The app prevents influencers with under 5000 followers and less than 10000 views per post from forming brand partnerships.
However working with KOLs can be costly. For example a top KOL with one million followers can cost between RMB 30,000 - 300,000 (US$4,250 - $42,500). So it is important to find the right KOL for your brand values and target audience.
To launch on the platform brands need to submit various documents (e.g. business license, product related documents etc) and pay a deposit to set up the brand account. The fee varies by product, but averages RMB 20,000 (US$2850). This is accompanied by a 15-20% operating fee; and 10-15% commission on sales.
Little Red Book's focus on user generated content and community building bolsters users' trust in the offerings, which enhances consumers' willingness to purchase lesser known foreign products sold on the app. This can be particularly useful for market entry for smaller brands.
It also allows brands to detect user interests and purchasing trends - insights that are useful in building a Chinese marketing strategy.
Finally, Little Red Book help brands manage cross-border inventory logistics and payments lowering the barriers to entry for Western brands. For instance, Little Red Book offers 60 days of free warehousing in Hong Kong, Europe, USA and Australia.
Cross-border payments are also supported. International brands can open a Little Red Book account using their local bank as all RMB payments taken via Alipay and WeChat pay will be converted by Little Red Book into the brands' local currency.
All of this is designed to make it as easy as possible for Western brands to be discovered by and sell to discerning Chinese urban consumers.
Find the latest benchmarks for Chinese ecommerce in our Tmall Trading Guide.
For more information on how Pattern can help boost your online sales, develop your marketplace strategy or enter emerging markets such as China please contact us here.
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Entering the ecommerce landscape is a huge undertaking for any brand—it usually requires a large investment in resources and expertise to really be successful. Any brand can quickly get in over their heads trying to navigate the nuances of SEO, fulfillment and logistics, distribution control, listing optimization, and meeting the numerous other requirements and administrative tasks to show up well on marketplaces.
Unfortunately, because it’s so easy for third party, gray market, and unauthorized sellers to obtain and sell products online, many brands find themselves pressured to execute an ecommerce plan without the right resources to succeed on marketplaces and their other channels.
So, for brands looking to enter the ecommerce space or improve their current and future performance, it makes sense to partner with an ecommerce consultant.
Pattern’s global presence and proven success with hundreds of brands has allowed us to develop highly effective ecommerce consulting services. We can guide your brand to navigate issues both large and small in marketplaces worldwide. To maximize your ecommerce efforts, you’ll need to understand what an ecommerce consultant does and how to select one who drives the right value for your brand and products.
An ecommerce consultant is a specialist in the ecommerce space who can give you personalized guidance on how to market your products and grow their presence on digital marketplaces.
An ecommerce consultant should be able to analyze your brand, audience, category, opportunity, and current roadblocks and help you understand how to utilize your resources (or what resources are missing) to be most effective in capturing your opportunities in the ecommerce space.
Not sure how to evaluate a consultant? Here are 4 key attributes to look for as you make your choice.
At Pattern, we prioritize brand obsession for a reason—we know that a brand-centered mindset makes a crucial difference in the outcomes and results our partners achieve. So in our experience, when you begin your search for an ecommerce consultant, it’s important to look for a partner who is specialized in ecommerce, invested in the product, and passionate about helping brands build and improve their strategies. Typically, this means finding someone that consults exclusively for ecommerce marketplaces, rather than choosing a consultant who offers many different services.
It’s also important to avoid choosing a consulting partner who can’t deliver the right experience for your brand. The best indication of whether your potential consultant can do that is to review their history, data, and results with other brands. Ask if they’ve helped others in your selling category, if they’ve solved specific issues your brand is facing, and why they feel you are a good fit. The key is to leave the conversation feeling confident that you understand your consultants’ capabilities and whether or not they match up with your needs.
It’s best to pick a consultant who knows how to guide a brand onto and through multiple marketplaces worldwide. You’ll want to take a look at your long-term strategy and think about the regions and platforms you’re currently on and where you might want to take your brand in the future. If your consultant is truly great at what they do, they’ll be able to help you perform well enough with your current product roadmap that it’ll be a no-brainer to expand your presence at the right time.
The most effective partnership with an ecommerce consultant will be able to give you both recommendations and point you to solutions for making those changes in your planning, processes, and execution. Your time and money is valuable, so you want to make sure that you’re spending it as efficiently as possible as you follow your consultant’s advice. So, before you commit to an ecommerce consultant, ask about the resources and concrete solutions they typically recommend to the brands they work with.
Finding an ecommerce consultant that checks the boxes can be a difficult task. At Pattern, our entire focus and drive centers around giving brands the tools and resources they need to succeed on domestic and international ecommerce marketplaces.
With over 100 global ecommerce consultants across 10 global offices, we have the right tools to partner with brands across the world to achieve better ecommerce success. We give specialized advice, then make sure our partners have all the adequate SEO, social media, CRM, Amazon multi-channel fulfillment services, and ecommerce outsourcing services they need.
Interested in ecommerce consulting services? Set up a call here to learn what Pattern can do for your brand on global marketplaces.
If you’re interested in expanding your brand internationally, you’re probably familiar with Tmall. Tmall is Asia-Pacific’s (APAC) largest marketplace, and indisputably the biggest ecommerce powerhouse in the world. It represents a huge opportunity for many brands, but entering the space is also a big challenge to take on.
At Pattern, we recommend brands looking to enter international markets should first focus on dialing in their domestic presence. Once you’re satisfied that your brand is well-represented and optimized locally, you’re ready to think about tackling new regions, like APAC, and launching on marketplaces like Tmall. Our top advice for entering Tmall is to understand and strategize around its three most important metrics: service, delivery, and content.
Service, delivery, and content ratings are the three elements that make up Tmall’s Detailed Seller Rating (DSR) score. Each component is scored on a scale of 1-5 that is displayed publicly on your brand’s Tmall flagship store page. This is meant to help consumers decide whether or not to purchase your products.
DSR scores are important because they’re highly influential in driving conversions—customers see DSRs as a way to quickly understand if a brand is trustworthy and worth buying from. They also matter quite a bit to Tmall itself—they monitor these scores and will take action to close flagship stores with low scores.
Let’s go over each element of the DSR score and some steps you’ll need to take to achieve high ratings.
Service is a huge ecommerce component in APAC marketplaces. In most other regions, product listings are static, and consumers use content and reviews to make a decision about what to purchase. On Tmall, consumers want to interact with your brand and test its validity before buying—each transaction takes at least one human interaction to convert.
So, to get a great service rating, you’ll need to have a large, established customer service team dedicated to Tmall sales that can offer real, human touchpoints and very fast response times. To get an idea of the speed your agents should be capable of producing, in our Tmall benchmarking exercise, 92.5% of brands’ customer service agents replied to queries via live chat within 30 seconds, 5% replied within one minute and the remaining 2.5% of brands took longer than a minute. So, look for a Trade Partner (TP) that has enough resources to compete with those numbers, support your sales, and maintain a good DSR score.
Another thing you’ll really want to focus on is a high-quality delivery experience for consumers. As in other regions around the world, Tmall consumers have high expectations for their delivery experience. In our Chinese consumer polling report that targeted consumers buying from Tmall Global, we found that 6% expected same-day delivery, 15% expected next-day delivery, and 46% expected 2-5 day delivery.They want to receive their products fast and they want the products to be undamaged and pristine upon arrival.
So, to achieve a high score for your delivery capabilities, we highly recommend partnering with a TP or ecommerce accelerator like Pattern (which serves as a TP) who has the ability to facilitate your distribution. Make sure your TP has the right infrastructure in place to support high-quality logistics experiences for all of your consumers—they should have an established, well-oiled delivery process in place and the capability to fluidly add you to their current fulfillment system.
As in every digital marketplace, content is a huge component of the decision-making process for consumers on Tmall—they can’t touch your product with their hands or see it in person before buying, so it’s important they’re empowered to make a good decision on whether or not to purchase based on the videos, images, and copy.
The goal is to make all of the content and relevant information on your flagship site easily-accessible—consumers should be able to visit your page and make a decision about whether or not to buy without navigating to a new site/page and taking their conversions with them. Images with text and extensive product details are a great way to do this, as well as making sure your service team can speak to all aspects of your product with any consumers (via text or chat).
As the world’s foremost brand partner for ecommerce acceleration, Pattern truly understands the significance of international expansion. With regional offices around the world, Pattern knows how to successfully launch and grow brands on Tmall and other marketplaces, with the data, insights, and marketplace intelligence to build the metrics that matter.
It’s important to have a fantastic brand presence, a knowledgeable guide, and a clear go-forward strategy for your best chance at success. With our in-country resources, expert teams, and extensive experience in growing brands around the globe, Pattern can help you get there.
Set up a call to get your international expansion strategy in motion.