Little Red Book: Understanding Social Commerce in China

Bianca Goott

July 31, 2019

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 in numbers

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.

What value can Little Red Book provide brands

There are two interconnected ways in which brands can leverage Little Red Book:

  1. 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.

  2. 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.

Which Western brands use Little Red Book?

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.

What type of content works well on Little Red Book?

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:

  1. Discussion of how products can improve aspects of consumers daily life (e.g. mix product reviews with lifestyle storytelling).

  2. Product insights (e.g. before/after reviews, performance tracking, how-to guides).

  3. Products as a solution to customer pain points.

  4. 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.

Why are key opinion leaders important on Little Red Book?

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.

What is the cost for brands wanting to launch on Little Red Book

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.

What are the benefits for brands who work with Little Red Book

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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Sept 6, 2022

Global Ecommerce Weekly News: 6th September 2022

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Aug 30, 2022

Global Ecommerce Weekly News: 30th August 2022

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Aug 23, 2022

Global Ecommerce Weekly News: 23rd August 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon to add mental health support to primary-care service Amazon is set to move into mental health therapy with its primary-care division, following its recent acquisition deal of One Medical. The plan is to partner with virtual behavioural therapy service, Ginger, to offer its Amazon Care users with on-demand access to mental health services, licensed therapists and psychiatrists. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/08/11/amazon-plans-to-add-mental-health-support-to-primary-care-service/) GMB union calls for £15 an hour minimum pay at UK Amazon warehouses Amazon recently offered its warehouse workers a 3% pay rise, which in comparison to the June inflation rate of 9.4% left employees disappointed. Following this, hundreds of Amazon warehouse workers stopped work last week, protesting against the minimal pay increase, seeking a minimum of £15 an hour. Recent protests consisting of employee walkouts and sit-ins aim to get a better offer out of Amazon. [Read more on The Guardian](https://www.theguardian.com/technology/2022/aug/09/gmb-calls-for-15-an-hour-minimum-pay-at-amazon-warehouses-in-uk) Amazon third-party sellers have received their first-ever holiday fee hike Amazon’s third-party marketplaces account for close to half of the company’s online sales. The company introduced a 5% fuel and inflation charge to its third-party sellers earlier this year, and has now implemented another inflation increase charge. Commencing 14 October, any seller who uses Amazon’s fulfilment service is subject to the price hike, which is set to be an additional 35 cents per item for products sold in the US and Canada. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/08/17/amazon-third-party-sellers-have-received-their-first-ever-holiday-fee-hike/) Amazon puts a pause on UK grocery shop roll-out as the cost of living increases Amazon has slowed down on its UK roll-out of till-free Amazon Fresh grocery stores following disappointing sales and the rise in cost of living. Allegedly, the company is no longer looking for potential sites to expand and if more stores are opened, they will likely no longer use a till-free system, as consumers become more cautious about spending. [Read more on The Telegraph](https://www.telegraph.co.uk/business/2022/08/21/amazon-pauses-uk-grocery-shop-roll-out-following-disappointing/) --- Other Marketplace News --- Shopee overtakes Alibaba across international markets Shopee has surpassed Alibaba and taken the top spot for sales outside of China. Singapore-based marketplace saw a year-on-year increase of 51.4% at the end of Q2 of this year, while Alibaba saw a 3% drop during the same time period. This can be seen as a promising development for start-ups and their ability to compete with some of the largest ecommerce giants in the market. [Read more on Exchange Wire](https://www.exchangewire.com/blog/2022/08/18/shopee-surpasses-alibaba-in-international-sales-amazon-searches-for-entertainment-exec/) H&M reopens its official store to Alibaba’s Tmall ecommerce platform It has been nearly 18 months since Alibaba removed H&M from its Tmall platform, following H&M’s criticism of human rights abuses in Xinjiang. It is estimated that over a million people, predominantly minorities in the area, have been unlawfully detained in camps across the city. Brands including Nike, Adidas, Burberry and Converse were swept up in the controversy, however H&M was one of the first to be targeted for speaking out about the issue. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/08/16/hm-returns-to-alibabas-tmall-platform-16-months-after-xinjiang-controversy/) Klarna launches new feature allowing UK consumers to view full online order history Buy-now-pay-later company, Klarna, has launched a new feature on its shopping app, which allows UK consumers to view their full online order history, regardless of whether they purchased the product using Klarna. The feature also shows delivery tracking and aids consumers in managing their online purchases more conveniently. [Read more on The Industry](https://www.theindustry.fashion/klarna-launches-new-feature-allowing-uk-consumers-to-view-full-online-order-history/) --- Other Ecommerce News --- Online marketplaces responsible for £280 billion business turnover in the UK Nearly 900,000 UK businesses are currently selling on online marketplaces, generating an estimated £282 billion worth of sales each year. This figure represents 6% of the UK’s annual business turnover, highlighting the notable contribution that marketplaces make to the UK economy, along with the potential for further growth in this area. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/08/09/online-marketplaces-responsible-for-280-billion-business-turnover-in-uk/)