Little Red Book – What Is It and How Can It Be Useful to Your Brand?

Picture of GAB Team

GAB Team

Little Red Book (Xiaohongshu 小红书) is an interesting on-the-rise Chinese social media and ecommerce app. This app is best described as a mix of Pinterest and Amazon.

Recently, LRB made news for its Youzan integration. Youzan is an e-commerce SaaS service that only integrated shops from WeChat. However, they are now looking to start connecting stores from Little Red Book as well. This tells us a lot about the direction that LRB is heading toward.

This change tells us that Little Red Book is definitely making a splash in the China e-commerce marketplace. And, more important other players are starting to notice. Smaller stores that aren’t as established as the big brand names benefit from this new update. And those that don’t yet have the budget to put together a Tmall store.

We are getting into how you can use Little Red Book to your marketing and e-commerce advantage in China. But first, let’s discuss the basics.

What is Little Red Book or Xiaohongshu?

LRB was founded in 2013 for consumers to share advice and opinions on buying abroad. However, the app is now a leader in cross-border e-commerce.

As previously mentioned, the platform is described as a cross between Pinterest and Amazon. Specifically, users can share aesthetics about products in the forms of texts, pictures, and videos. Users can share opinions and recommendations on said products. This applies to both Chinese and global brands and products. This app also allows users to purchase recommended products from stores within its platform. Furthermore, it successfully combines community trust with e-commerce. The reason being, shoppers make purchases based on recommendations and opinion-sharing.

KOLs and celebrities use this platform and they are extremely active on it. In particular, they are constantly sharing content and products they like to promote to their audiences. This exposes everyday consumers to new products that they otherwise would not be introduced to.

LRB makes content recommendations adapted to the profile of its users by using artificial intelligence and machine learning.

Users find all types of lifestyle products. Such as: food, fashion, beauty, travel, fitness, and such. Content can be found via three sections:

First, “Follow” which refers to content by users you are following.
Second, “Explore” which refers to new content to explore.
And third, “Nearby”, which is new content created near your location.

LRB is an extremely dynamic platform. Ranked in the Top 3 of the most innovative Chinese companies behind Meituan and Alibaba Group it is a fast-growing company. The platform competes with other key players in the social and e-commerce sector, such as Kaola, Tmall, and JD.com.

 

 

The Evolution of Little Red Book

The company first started in Hong Kong. Because Hong Kong is one of the favorite shopping destinations for Chinese Mainlanders due to its lax tax policy.

For many buyers, their shopping trip to Hong Kong was their first overseas shopping trip. Shoppers were just reaching an income-level that would allow these trips. Even so, a large number of them needed guidance, especially when it came to shopping for global brands.

This is where LRB co-founder Mao Wenchao saw an information gap and started Xiaohongshu. It started humbly as the “Little Red Book Hong Kong Shopping Guide.” The main purpose was offering shopping-related information to mainland Chinese shoppers traveling to Hong Kong for their shopping trips.

Chinese consumers are well known for doing a lot of research before purchasing products. This culture helped the Little Red Book take off massively.

Soon after its launch, an increasing amount of user-generated content about shopping overseas was shared by its users. As a result, its scope started to spread beyond Hong Kong. Soon users were sharing shopping experiences from Thailand, South Korea, and Japan. Shoppers were discussing everything from consumer experience to prices and quality. Seeing this growth, the company changed its name to “Little Red Book Shopping Notes.”

However, LRB users weren’t completely satisfied with the platform. Users loved to window shop products before buying. But, shoppers wanted the convenience to buy products directly from the platform itself.

In late 2014, Xiaohongshu established e-commerce. Then it officially became the app we know and love today.

Statistics

As of 2020, Little Red Book boasts a total of 300 million users. But, that number is ever-rising. The platform has reached over 100 million monthly active users as of this year. This shows a lot growth over the previous year.

The user profile for LRB is interesting, with 86.1% being female and 13.9 male.

The age distribution is even more interesting, with 70% of new registered users being born after 1995. At the end of 2020, 12.16% of all users are below 18 years of age. The largest section of users by far are those between the ages of 18-24, making up 46.07% of total users. Ages 25-34 make up 37.24% of users. And finally, 4.08% belongs to ages beyond 34.

Most users are in 1st and 2nd tier cities. But the platform is becoming increasingly more popular in lower tier cities as well.

These numbers tell a story. Clearly, Little Red Book is a Gen Z and late-Millennial app. In addition, the most talked-about products on the platform belong to the cosmetics, fashion, and lifestyle sectors.

How can Little Red Book be useful for your marketing purposes in China?

Little Red Book is a brand’s marketing dream. Your products are discovered, recommended, and talked about through user-generated content. Moreover, your products can even sell on the platform, which is great for impulse buying. Little Red Book Marketing is a great cost-effective way to have your products talked about.

But what about brands that aren’t established in China yet and require a little push? Not to worry, Xiaohongshu offers several marketing solutions including advertising, KOL campaigns, live streaming, and on-platform stores.

How can you leverage Little Red Book as a global brand?

Global brands looking to market their products in China have two options to leverage

Xiaohongshu. Firstly, as a social media platform to improve brand awareness and visibility, and interact with potential customers.  Secondly, as a cross-border e-commerce marketplace to sell products.

Foreign companies can set up official brand accounts on Little Red Book.  The only requirements are the submission of various documents such as a business license and registration. Depending on the category of your products, the required documents can vary.

Setting up an official brand account is crucial to establishing brand awareness.  As previously stated, Chinese consumers do a lot of research before buying and they greatly value brand recognition and trustworthiness.  And an official account provides them with just that.

On your official brand account, Little Red Book users can browse the “Notes” you post.  As well as posts from other users when they mention your brand in their own Notes. This feature strengthens brand loyalty between you and the consumer.

Additionally, for brand products available on Little Red Book’s marketplace, consumers can simply tap “Products” to browse your goods. Consumers can also find their way directly to your official store through product descriptions.

 

 

Little Red Book’s Brand Marketing Impact

As we have established, Little Red Book plays a very important role in the consumer purchasing process. We describe the ways in these four main categories:

  1. Awareness. Little Red Book is a great way to discover new brands. Users and official accounts post info on brands and products every day.  Your brand is discovered by a new market.
  2. Interest & Desire. LRB continues to push relevant content based on users’ browsing trends. The platform is a good channel to create multiple consumer touchpoints. In China, consumers will open LRB to window-shop a product before buying it online or in physical stores.
  3. Action. When making a purchase, users typically will go on e-commerce platforms such as Taobao, Tmall, or JD.com. Although LRB has an in-app store system, most brands choose to open stores on marketplaces where they get more traffic. Nonetheless, Little Red Book stores are great for impulse buys. Specifically, where a consumer reads glowing reviews of your product and buys it immediately without having to leave the app.
  4. Loyalty. Converting a user into a customer takes brand loyalty and trust. If your products are of good quality, your customers will happily use Little Red Book’s product recommendation features. They will talk about your products and recommend them to other users.  Then turning them into customers too. Above all, after brand recognition is established, a self-perpetuating system is created. Effectively becoming a cost-effective means to generating new leads and sales.

Little Red Book Marketing Limitations

Although LRB is a great app, it’s important to discuss the relevant limitations that could impact your brand’s marketing efforts.

For one thing, compared to WeChat and Douyin (TikTok), LRB is a smaller platform, with fewer daily and monthly active users.

The user demographic is skewed toward top-tier city females. Which could limit if you can market your brand or product effectively.

The top industries promoting on Little Red Book are cosmetics and fashion. This reflects the user demographics of mostly young women.

That said, it’s important to consider this limitation when deciding whether to choose Little Red Book as a marketing platform.

Another LRB limitation is that it’s almost impossible to track sales conversion data. Xiaohongshu blocks any 3rd party links, and bans any mention of other apps such as WeChat and Tmall. If you want to track your sales conversion data, you’re going to have to be creative.  Otherwise you have to find ways to direct traffic to the right sales channel for you.

Content Marketing

When your marketing team is thinking about marketing on Little Red Book, there are several things to keep in mind.

  1. Content lifespan. Content on Little Red Book has a much longer lifespan than on other social media platforms. That is why some content is still garnering traffic up to a month after posting. Because of this, it is a good idea to focus on evergreen content with relevant keywords.
  2. Choose the right cover picture. Pick the right cover picture for your post. In particular, make sure it’s a clear showcase of your product, and remember to keep it localized. Chinese shoppers prefer localized content, with organic-looking pictures that look like consumers could have taken them, rather than professional photographers. Using Chinese models to showcase your products is also a good idea.  Consequently, posts with models from other regions tend to perform a lot worse in terms of engagement.
  3. Keep testing. Since there isn’t a limit set to how many times you post a day, make sure to take advantage of that by testing out many different types of content. Test graphics, pictures, or video-based. The type of content that works best may seem quite random at times.  But keep testing until you find what works best for your brand. A great start is mirroring the style of content other more LRB-successful brands are posting.
  4. Keywords. What content does well on Little Red Book resembles SEO, so a major part of this is keywords. Just like a search engine, LRB’s trending keywords change all the time. The number of search queries and the popularity of top-performing posts impacts keywords. To stay current use a 3rd party keyword monitoring tool to find the right trending keywords in your sector.
  5. Content Length. While KOLs’ content can go viral with just a few emojis brands find it’s best to keep content a little longer. We recommend writing posts of around 500 characters, well-structured with emojis.

Little Red Book Advertising

Paid advertising on Little Red Book works similarly to Instagram advertising. We suggest picking your best content and running ads on it to drive traffic to your page and products. However, there are a few key limitations to keep in mind:

  1. Little Red Book only offers a limited level of targeting categories with fewer than 20 interest groups. In fact, this pales in comparison to Instagram.
  2. There are no ways to retarget or track followers from advertising.
  3. Other apps don’t integrate with LRB which limits data.
  4. There are only 3 types of ad format.
  5. Traffic will be limited as Little Red Book only has around 100 million monthly active users. This is nothing next to WeChat’s 1.2 billion active users.

Therefore, paid advertising is a supporting feature for your marketing activities on the app. We recommend setting aside no more than 15% of your budget for this activity.

 

 

Types of Advertising on Little Red Book

  1. Personal account newsfeed ads. This ad appears on the newsfeed. And it’s the only type of advertising available to non-brand entities on Little Red Book. These ads are more expensive than brand advertising. These ads lead to a personal account and are not used to advertise products.
  2. Brand account newsfeed ads. These ads also appear on the newsfeed. But, they are for brand accounts. The ads are cheaper compared Douyin and WeChat. The average click-through rate on Little Red Book is strong, between 2% to 5% depending on the industry. Newsfeed ads on this platform have much more traffic compared to other ads, so we recommend allocating most of your budget to this. As previously stated, the biggest limitation is the limited number of interest groups and lack of specific targeting options.
  3. Keyword search ads. This is the only type of Little Red Book ad that allows brands to be more specific with targeting. Since you can bid on keywords instead of paying to target specific target audiences. However, it’s more expensive than newsfeed ads. And it’s not easy to spend with specific keywords due to traffic limitations. For instance, a keyword will have a limit to how much money you can spend on it every day.

Little Red Book Influencer Strategy

Influencers or KOLs are everything on Little Red Book.  Since they are opinion leaders and LRB is a platform dedicated to product recommendations. We recommend allocating most of your Xiaohongshu marketing budget on an influencer strategy. Here’s what most successful Little Red Book influencer strategies are made up of:

  1. Display ads. These promote the most popular influencer posts to expand the reach.
  2. Seeding. Also known as gifting, seeding is the practice of giving free products to influencers to try in the hopes they will post about them. Micro-influencers are the KOLs who are most likely to be responsive to this. And it’s a great way to get exposure with a small budget.
  3. Influencer campaign. When targeting larger influencers, promotional content will require payment. We recommend budgeting for large influencers since each post will give tremendous exposure due to the size of their following. A top influencer will require around $10,000 USD per promotional post.

This type of strategy allows brands to work with the most number of influencers during their campaigns. On Little Red Book, it’s common to work with 50-200 influencers during a campaign that lasts two weeks. However, don’t forget to play the numbers game. Micro-influencers create a lot of viral content on Little Red Book.  So don’t forget to target as many as possible to get maximum exposure. Also, this increases the chance of producing the best influencer-generated content for your brand.

 

 

Little Red Book Stores

As previously stated, Little Red Book has an in-app e-commerce system. This system enables users to make a purchase without leaving the app, and it supports cross-border payment and shipping. Brands can even run an LRB store with an overseas business license (with a Chinese entity as the guaranteed party). The commission is lower at 5% than other platforms, and there are no technical fees.

However, it’s important to keep in mind that Little Red Book stores aren’t for everyone. Many large brands don’t have stores, and neither do very little ones. Instead, large brands use distributors to sell on Little Red Book. We recommend that you don’t set up a LRB store if you’re a brand with an already strong distribution network. Or if you’re a brand that has less than 5,000 Little Red Book mentions.

Little Red Book Live-Streaming

Research suggests that live-streaming generates over 90% of sales on Little Red Book.

This is an effective way to promote your brand and stay current in modern marketing trends. However, Little Red Book streaming has a much smaller reach than streaming on bigger platforms such as Douyin.

Nevertheless, Little Red Book live-streaming does have a much higher order size compared to Douyin. Top influencers can have an average order size of $60 USD, while on Douyin it’s usually $13 USD.

It’s important to keep in mind that the best-selling products on LRB’s live-streaming are premium skincare and other beauty products

 

Conclusion

Little Red Book is a great platform for product marketing. With its emphasis on community, opinion, and recommendations, products advertised and promoted enjoy wide exposure and increased sales.

Little Red Book can be leveraged by global brands by creating effective content. Content that generates brand awareness and keeps customers, old and new. Brands can also take full advantage of the ad options and influencer or KOL campaigns. Furthermore, brands can display their brand and products to successfully market themselves in China.

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