News Terbaru 2020 – 2021

Little Red Book: When content meets ecommerce in a UGC community

Little Red Book: When content meets ecommerce in a UGC community

Jackpot hari ini Result HK 2020 – 2021.

Red or Xiaohongshu 小红书 in Chinese (literal meaning Little Red Book) is one of the most coveted unicorn Chinese ecommerce and social media platforms.

Both Alibaba and Tencent led the investment of this unique app, said to have a valuation of US$10 billion. Fast Company nominated it as one of the most innovative Chinese companies next to Meituan and Alibaba (though Red did not make into the final list).

Rumours have swirled many times that the unicorn is preparing for an IPO. Although Chinese media have reported that because of Didi’s investigation and regulations changes, Red delayed its IPO process. 

So what makes Red a favourite of both investors and brands in China? 

Red is an attractive platform for brands seeking to target younger generations of Chinese women. It has over 100 million users creating video and picture notes, almost 90% of which are women mostly aged between 18 to 34 years old. 

Founded in 2013, it has the nickname National Grass Planter (国民种草机), whereby it has become a desirable platform for brands looking to seed (种草), grow (长草) and weed (拔草) audiences—which is the process from thinking to shopping. 

Fashion KOLs and women influencers are able to gain advantageous status in the ecosystem. Influencers  “打哈欠的大狮子” and “HiyaSonya” have gained more than 1 million followers in Red since they were featured in Campaign Asia-Pacific‘s 10 Chinese KOLs to watch in 2018. At the time Elijah Whaley, then CMO of Parklu, noted that Red, with its content-to-commerce user experience, would continue to be a smash hit.

Its rise has not been without some bumps along the way. Crisis hit in 2019 when it was discovered that the platform was being used to sell illegal content and harvest fake followers. In a government crackdown, the app was removed from Android app stores in China. But after instituting strict guidelines, it soon bounced back and has become even more popular as an information-sharing platform.

GroupM’s Digital Platforms Ecosystem Report listed it as the top four short-video platform in China, together with WeChat Channel(视频号), Douyin (TikTok Chinese version), and Kuaishou. The report recommended Red as a lifestyle and consumption decision app, with personal interests as the most important tag in the community.

A challenge for Red is how to compete in an already complex ecommerce industry in China. While it has its own store called “福利社” offering membership discounts and other benefits, plus thousands of brands’ official stores, quite a few users still read notes and recommendations and then switch to other ecommerce apps such as Tmall and JD to buy products. 

Nevertheless, R3 and Weiboyi released a KOL investment practice report in China. They found that Red (+119%) has a much higher increase in the investment rate from advertisers than many other platforms, right next to Bilibili (+141%). 

Perfect Diary is one of the most successful cases of brands that has benefited from Red. In early 2018, the brand began to invest in KOL marketing and invited many KOLs and other users to share notes on Red, which helped increase sales on Tmall. As Red exposure correlates with Tmall sales increase, many other new brands spotted and followed suit.

Brands that have made long-term efforts to dig into authentic UGC content on Red have prospered, according to a Digipont article solicited by Doris Ke (刀姐), one of our Women to Watch Greater China winners 2021. Deciphering the logic of the algorithm and analysing content marketing on the platform, Digipont’s article recommended new brands such as Chicecream (钟薛高), a high-end ice cream brand, and Xiaoxiandun (小仙炖), a cubilose or edible bird’s nest brand, as classic examples of how best to market on Red.

What should marketers consider when investing in Red? What are the advantages and disadvantages of the platform in the long-term? We’ve invited several industry analysts with expertise in the Chinese market to share their thoughts.



Arnold Ma 
Founder
Qumin

I would say Red is one of the best up-and-coming sharing and recommendation platforms, and certainly the biggest of the smaller platforms. It started its life—and indeed its heritage is heavily built on—beauty and fashion recommendations from its users. Like everything, as it has grown, it’s now more of a general social media content platform. People also need to understand, it’s the best sharing and recommendation platform for the female audience.

Neiwai, a leading Chinese lingerie brand, has been doing well on Red by not just focusing on the functional side of their products, but also appealing to Red users on a more meaningful level. Neiwai’s content on Red has targeted gender, female empowerment and body image. It has been working with female fitness and fashion creators and influencers to challenge traditional stereotypes about women’s bodies. The brand understands that those influential people can play a crucial role in consumers’ decision making and inspiring females. It’s the combination of marketing effectiveness and purpose—which many brands forget when they enter or build strategies for China.

Its downside ironically is also its advantage. Its audience is very female-centric, which limits the type of content, the type of audience and brands on the platform—also limiting its abilities to monetise compared to platforms like Douyin and Kuaishou. I think it will evolve to be even more focused on social and live commerce. Right now, Red has the highest commerce conversation out of all the social platforms in China. And, more than anything, being a majority female audience, they are the perfect audience for shoppertainment. The products that are sold on there are mostly lower value impulse purchases. Perfect for live/social commerce.


Greg Paull
Co-founder & Principal
R3

China’s social media platforms live in an interdependent ecosystem, so there is no such thing as the “most powerful”. Every platform serves particular interest groups. Red is a very important channel for sharing and recommendation when it comes to fashion and cosmetics; Douyin appeals to foodies; Bilibili attracts people interested in technology products.

Knowing if their brand category is the right fit is the first consideration any marketer needs to make if they are considering investing in Red. Marketers also need to assess if their promotions align with user expectations on the platform. Does their marketing strategy include direct sales, discounts, and sampling?

Newer brands, particularly direct-to-consumer brands, are more agile and data-driven with their marketing approach, and therefore are able to leverage platform features quickly. Any brand looking to maximise their return on social today needs to have the right partners, platforms, and in-house capability to make it work. Traditional marketing operations won’t work in this new environment.

Red is more focused on Tier 2 and Tier 3 KOCs (China’s Key Opinion Consumers), which leads to issues of tracking costs and performance. Ensuring the integrity of products, the quality of traffic, and the authenticity of content is important for Red as these factors will decide the level of trust it receives from users and the amount that marketers will be willing to invest.

Conversion on Red is driven by the experience of connecting in the moment. Narrow focus, high intimacy—this is the place where people are most likely to buy. WeChat and Weibo are about reaching the masses. High volume, low intimacy. It’s information. Douyin is about socialising and brand awareness. Narrow focus, but still low intimacy due to the type of sharing.