Introduction: In recent years, leveraging Xiaohongshu (Little Red Book) has emerged as a significant trend in brand marketing. Throughout the first half of 2024, major brands like GUCCI, Proya, and Chando have significantly boosted their market presence by establishing a strong Xiaohongshu IP. At the same time, new and niche brands such as Yunnan dairy veteran “Zhadian” and Korean sunglasses brand Fakeme have effectively utilized Xiaohongshu’s category marketing to gain a foothold in their respective markets, achieving substantial GMV (Gross Merchandise Volume) growth from the ground up.
Given the current economic climate, the key question is how businesses can strategically enter Xiaohongshu to unlock new growth opportunities.
1. Timing Xiaohongshu: Harnessing Visible New Consumer Power
Xiaohongshu is often humorously referred to as both an old and young platform. Having been established in 2013, this year marks the beginning of its next decade. In March 2024, Xiaohongshu’s monthly active users exceeded 300 million, making it a vital part of the commercial ecosystem in terms of both overall growth and user base. So, what gives Xiaohongshu its edge?
Advantage 1: Demographics Among its 300 million monthly active users, 50% are post-95s, and 35% are post-00s, indicating a youthful user base. These groups represent the core consumer force with significant potential for growth. Over time, the male-to-female ratio on Xiaohongshu has shifted from 1:9 to 3:7, driven by the platform’s expansion into male-oriented categories such as men’s fashion, automobiles, and luxury goods, making it more commercially diverse.
Advantage 2: Content With 90% of Xiaohongshu’s content being user-generated (UGC), and 80 million active content creators, the platform thrives on authentic user perspectives rather than brand-driven narratives. This approach has cultivated a content community with nearly 60% search penetration, where most users engage with a specific purpose in mind. The phrase “When in doubt, check Xiaohongshu” reflects its growing role as a search engine with vast commercial potential.
Advantage 3: Precision Engagement Xiaohongshu’s dual-page browsing model differs from other platforms, granting users full control over their content consumption. While this approach might limit traffic, it enhances the value of each user interaction. Once users engage with content, they often transition to active search, leading to deeper decisions and ultimately, e-commerce transactions. This seamless integration of content and commerce is a key driver of Xiaohongshu’s success.
The platform’s strengths in user engagement and content creation, combined with its unique browsing experience, are central to its thriving commercial ecosystem.
2. Capitalizing on the Opportunity: Decoding Xiaohongshu’s Strategy
To succeed on Xiaohongshu, brands must approach the platform strategically rather than impulsively. Before diving in, it’s crucial to understand the landscape. Based on my experience in the home furnishing sector, I’ll outline a five-step strategy for creating viral products on Xiaohongshu:
1) Conducting Insightful Analysis Before entering a market, businesses must assess the potential for growth by analyzing categories, target audiences, and relevant brands on Xiaohongshu. These insights are critical for shaping effective content and marketing strategies.
2) Strategic Product Selection Product selection is paramount in e-commerce. Brands must identify whether their product is a new launch, traffic driver, flagship item, or high-margin product, as different categories require tailored approaches on Xiaohongshu. For new launches and traffic drivers, leveraging trending topics is essential for attracting traffic. For flagship and high-margin products, the focus should be on addressing the target audience’s pain points and emphasizing value for money. High-end flagship products benefit from a comprehensive product line, premium materials, and endorsements from brand ambassadors to enhance brand image and reputation. Planning the promotion matrix for key moments ensures maximum impact.
3) Targeted Seeding We’ve developed a unique reverse funnel model for Xiaohongshu’s audience targeting. Unlike other platforms that use a funnel approach to influence high-potential users through broad audience targeting, Xiaohongshu’s precise user base allows for the rapid identification of core users. Once core users are identified, brands can leverage Xiaohongshu’s content sharing features to expand into high-potential audiences and eventually reach a broader market through commercial traffic.
This approach is effective because Xiaohongshu not only facilitates transactions but also builds brand reputation. Starting with core, demand-driven users and gradually expanding to a broader audience helps create a strong product image and reputation in the community.
4) E-commerce Conversion Strategies To achieve target ROI, we focus on three areas: commercial notes, store broadcasts, and KOL (Key Opinion Leader) broadcasts. Commercial notes involve integrating product links directly into well-crafted content, driving sales. Store broadcasts, where streamers promote products, have become a key conversion method on Xiaohongshu. KOL broadcasts are particularly distinctive on Xiaohongshu, where the platform focuses on a buyer-oriented e-commerce model, featuring celebrities like Zhang Xiaohui and Dong Jie. Xiaohongshu’s live streams emphasize a gentle, emotionally resonant approach, contrasting with the high-energy sales tactics seen on other platforms. By mastering these three strategies, brands can find significant opportunities in Xiaohongshu’s e-commerce landscape.
5) Audience Retention and Re-engagement For sustained success on Xiaohongshu, brands must focus not only on product offerings but also on cultivating consumer loyalty and boosting repurchase rates. We’ve developed an AIPS model to guide this process: Awareness (brand recognition through passive exposure), Interest (initial seeding behavior), Purchase (conversion), and Share (post-purchase sharing). The final sharing phase is crucial for shaping consumer perceptions and building a positive brand reputation. Effective audience re-engagement through this model leads to higher repurchase rates and stronger consumer loyalty.
Conclusion: Who Will Be the Next Success Story? To illustrate, let’s consider a case study. Atour Hotel’s pillow brand, Atour Planet, became a viral sensation on Xiaohongshu last year, leading to the brand surpassing its annual sales target by June 18. The key to their success was a focused strategy across content, placement, and product dimensions, coupled with refined operations and celebrity endorsements. This example demonstrates that to succeed on Xiaohongshu, brands must have competitive products, a strong operational team, and the ability to offer superior consumer experiences.
As e-commerce rapidly expands on Xiaohongshu, with significant growth in purchasing users, orders, and live stream GMV compared to last year, more brands are discovering new opportunities on the platform. We hope that more brands will identify promising categories, tracks, or industries on Xiaohongshu and become the next success stories.
