6 reasons why RED is still one of the best apps to sell luxury cosmetics in China in 2020

Xiaohongshu: The Chinese platform where promote and sell luxury cosmetics

Also known as “Little Red Book”, Xiaohongshu is among the most popular social commerce applications on the Chinese landscape. Its peculiarity is to integrate the sphere of social media with that of e-commerce thanks to the RED Mall section. This means that users can enjoy a social experience and at the same time purchase products without changing the App.

Xiaohongshu is a word-of-mouth marketing platform where consumers can discover and buy international products based on trusted user-generated content, including recommendations and reviews.

Xiaohongshu is an open application. Anyone can interface with its contents, even without registering. The posts that appear on the homepage are shown based on user preferences, requested in advance when the App is first opened. In addition, the algorithm proposes the contents of the people followed and those nearby.

It was founded in 2013 to create a community where users could find recommendations about foreign fashion and cosmetics. In only four years, it’s garnered more than 70 million subscribers and developed its own cross-border ecommerce platform. Currently, Xiaohongshu has over 300 million registered users with 1/3 of them being monthly active.

Xiaohonshu most popular items include foreign luxury cosmetics. But why? There are 6 reasons why Xiaohongshu is still one of the best apps to sell luxury cosmetics in China 2020.

1-Xiaohongshu users are the main consumers of luxury cosmetics

In China, the biggest consumers of luxury cosmetics are young women under 35 and guess what? the largest users of Xiaohongshu are women under 35.

Xiaohongshu is particularly special among all social media channels not only because it combined cross-border e-commerce function, but also because its user portrait: 86.1% users are females, 83.7% are under 35 years old and 62.5% live in 1st- and 2nd- tier cities.

Girls are big purchasers when it comes to cosmetics and fashion. Therefore, Xiaohongshu is particularly interesting for foreign luxury cosmetics brands that want to sell cosmetics in China.

Xiaohongshu’s content distribution algorithm is set up so that users can see content from accounts they don’t follow on the news feed. A post with high engagement could become viral on Xiaohongshu.

2-Chinese luxury cosmetics consumers rely on Xiaohongshu recommendations and reviews

Recommendations and reviews are essential in China especially in the cosmetics sector. Chinese consumers tend not to trust brands they don’t know, and even a famous luxury brand outside of China may not be known to Chinese consumers.

Therefore, when choosing which product to buy or not, Chinese people tend to trust a lot of recommendations and reviews on social media. In China, 54 percent of consumers seek to validate product quality through reviews, comments and feedback prior to purchasing compared to 47 percent globally, and 27 percent will write their own review of the product or experience after purchasing compared to 20 percent globally.

As a matter of fact, Xiaohongshu has created a platform for girls to discuss fashion and beauty the way they do with their friends offline. It is a big community made by older consumers and Key Opinion Leaders (KOLs) which offers recommendations and reviews.  Given the conversion rate and the power of word-of-mouth marketing in China, this platform is very interesting for luxury cosmetics brands as recommended products get more exposure.

The Xiaohongshu community is a very good place to conduct social listening, because the notes and comments are users’ feedback according to their first-hand experience. It’s a place where anyone can understand the real needs and wants of young Chinese women and see whether your products can succeed in China.

Unlike WeChat that prohibits incentivized sharing, Xiaohongshu celebrates promotional content. Since Xiaohongshu model depends heavily on the content in the pool. It is important for brands to optimize and localize internal content. Brands should encourage Xiaohongshu users to share opinion and tips about products.

For example, in almost all the posts, Perfect Diary asks users to like, comment, bookmark, and post pictures to participate in a lucky draw.

Brands should definitely leverage this freedom to engage with users!

3-KOLs on Xiaohongshu are the best influencers of Chinese luxury cosmetics consumers

For brands, having an official account on Xiaohongshu means boosting the confidence of Chinese consumers. In fact, as previously mentioned, the latter are very sensitive to comments on products or brands.

Accustomed to dealing with a market full of offers, but also of counterfeit products, before buying, check information and quality from different sources. Xiaohongshu is the best place for them to look for information for luxury cosmetics brands and products.

They seek reassurance in the opinions of those who have already purchased the product or from the KOLs (Key Opinion Leaders), who play a fundamental role in guiding users in China, especially when it comes to cosmetics.

Xiaohongshu KOL campaign is more like a combination of a few top tier KOLs and lots of smaller KOLs. For example, Perfect Diary collaborated with over 150 KOLs to launch the product Daydream in 2019.

Influencers are always the top motivation when it comes to consumption and influencers on Xiaohongshu are much more powerful than those on other social media, because every single user can become a micro-influencer as long as they’re willing to share their real and comprehensive experiences.

If an influencer with a following on Xiaohongshu likes your products, it can affect a brand’s image, reputation and sales, because He/She understand the tastes of female users on Xiaohongshu and know how to create a popular post with viral potential.

Therefore, luxury cosmetics brands should not underestimate the importance of KOL collaboration on this platform! If you want to know more how to choose the right KOL for your marketing campaign on Xiaohongshu, contact us!

4-Xiaohongshu is a UGC platform where make tutorials and educate consumers about cosmetics

The tutorials for cosmetics through images, short videos or live streaming are much loved by Chinese consumers and thanks to them brands can promote their products with the help of KOC (Key Opinion Consumers) and KOL.

Xiaohongshu offers this type of possibility, the app in fact was born as a shopping guide; posts and comments want to “educate” the user about a certain product. On Xiaohongshu, the brand does not advertise itself. This creates strong engagement between publishers, viewers and the brand behind the recommended product.

On Xiaohongshu, the tutorials are a lot simpler. Most of the content is a picture display of how to apply the product. Obviously, however, live streaming and short videos offer more engagement with consumers, so where possible, it is advisable to promote products through videos.

Many brands luxury cosmetics brands are using tutorials to educate consumers how to use products, through KOL, short video and live streaming. For example, Perfect Diary has a Xiaohongshu account with lots of makeup tutorials for beginners.

5-Xiaohongshu live streaming is the best way to promote luxury cosmetics

Live streaming is one of the biggest digital trends in China in 2020 and is a format that is particularly popular with users. In fact, it allows to show the products in a realistic and detailed way and increases even more the relationship of trust between those who present them and the viewers.

In recent times, from young customers who shop via live streaming to brands that invest heavily in short video campaigns, the entire cosmetics industry in China has invested in this new marketing model.

Xiaohongshu offers the ability to live streaming on the platform and now you can find fun and creative makeup tutorials all over it.

Especially during the current pandemic, a huge number of cosmetics enthusiasts had to rely on online shopping activities and livestreaming KOLs to keep them well-informed while purchasing skincare products and makeup.

For luxury cosmetics brands, live streaming are a very effective way to reach China’s hundreds of millions of shoppers.

6-RED’s recent lower commission drives sales on the platform

Xiaohongshu is an essential tool for its users to read and write product reviews, however in addition to creating networks of contacts and publishing content, it is possible to directly purchase the products shown on the screen through the practical “link-to-buy”.

Despite this functionality, the platform has struggled to convince its 85 million monthly active users to buy products directly on the app. After discussing a product, they tend to move from the platform and buy the products on Tmall or on Wechat mini-programs.

Therefore, with the aim of attracting merchants to promote and sell their products on the social ecommerce platform, Xiaohongshu announced on the 3rd of July that it would reduce its platform commission on sales from 20% to 5%.

This new commission is the same as the commission charged by Tmall in the fashion and cosmetics industries, making the platform competitive for merchants. In addition, if the traffic comes from Xiaohongshu advertisements, the sales commission drops even further, down to 3%. Therefore, this trend should induce end users to gradually get used to buying directly from Xiaohongshu.

This reduction seems to bring many benefits to merchants, why wait any longer and not take advantage of selling luxury cosmetics on Xiahongshu?

If you want to know more about how to sell luxury cosmetics on Xiahongshu, contact us!

GMA is a digital marketing agency specialized in the Chinese market. We take care of:

  • Creating your Little Red Book Official Account
  • Shop & Account Management
  • Finding the right KOL for your brand
  • Marketing campaigns

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