• First, reviewing the current challenges and issues RED is facing
• Then, analysing the strengths of the XiaohongShu and the digital marketing opportunities for brands
• And, finally giving our opinion on how and when a brand should consider leveraging the Little Red Book in China 

RED: content quality and platform management is under fire

A few days ago, XiaoHongShu has disappeared from Android stores in China. This situation fostered a lot of discussion online in China with close to a million discussions on Sina Weibo.

In the meantime, Netizens used this opportunity to be very critical of the platform. They feel the content quality dropped and the volume of ads and fake reviews increased.

This suspension of RED from the android platforms is happening a bit more than a month after the platform being warmed by the Chinese Ministry of Industry and Information Technology on user data collection. This situation make you wonder if the two are connected ? Is RED in serious troubles ?

The Little Red Book management team is well aware of those challenges. They already have intended to improve the quality of the platform with a serie of measures. In January, they created a brand partner program so paid marketing post by influencer appeared as such on the platform. They continued their “cleaning” effort in May by busting over 10,000 key opinion leaders with less than 5,000 followers.

Authenticity and trusted user generated content are the key values for users to come and spend time on the platform. As such, the recent backlashes might have a direct impact on the growth and the engagement of XiaoHongShu community.

XiaoHongShu: A mix of Social and E-commerce full of digital marketing opportunities

For foreigners, RED can be seen as a mix of Instagram for the user interface and Amazon for the customers review.

Born in June 2013, RED, is now 6 years old. It has attracted a community of 200 millions users with 80 millions active users. 

So far, XiaoHongShu did not grow as fast and as quickly as WeChat. And it has a long road before reaching the billion users. However, it has reached a point where it is ticking a lot of boxes to attract brands.

Red was initially design to help Chinese easily shop foreign products abroad. But it has quickly become a place where users reviewed, discussed and buy foreign products. This mix of social discussion and e-commerce is one the key value of XiaoHongShu for digital marketers.

RED discussions focus  mainly on cosmetics and skincare. But, now they expanded to other topics like travel, food, sport and of course fashion.

Today, this XiaHongshu user is a young and urban woman in China. 88% of its community is female, 60% is less than 30 years old and 57% live in the top-tier city. This demographic mix of millennials and Generation Z is the key target audience for most brands in China.

With its user generated content DNA, RED is the place to be for influencers (Key Opinions Leaders - KOL) in China. Today, the platform hosts thousands of influencers. They leverage their reach to negociate paid post with brands. Some KOL are charging 1,500 USD for one post to a community as small as 10,000 followers !

Leveraging KOL in China has been a challenge for several years. The results for brands are not always been great, with a lot of fake engagement and followers. RED is no exception to those challenges. It has become one of the key platform for brands and KOL collaboration in China.

With those strengths, the platform has know attracted over 6,000 brands including Fendi, MAC, Yves Saint Laurent or Shiseido.

RED: when and how to leverage it for your digital marketing ?

The more your brand / company is matching the following statements, the more RED should be part of your digital marketing approach in China:

• RED community match your brands target audience profile: young urban Chinese Woman.
• Your brand is related to the skin-care, cosmetics or fashion industries
• You are a foreign brand looking for e-commerce options in China
• Your company has already built a strong presence and engagement on WeChat and Sina Weibo
• KOL and influencers in China is part of your strategy in China

Here at Next Ren, we believe XiaoHongShu like WeChat in the past is at a turning point. It must find the right balance between marketing / monetization and value creation. He will also need to garantee a safe environment in term of data collection to keep user trust. 

Today, brands can already leverage XiaoHongshu to build their digital marketing strategy in China. But they must keep in mind the maturity and the size of the platform is not comparable to the bigger brothers like WeChat or Sina Weibo. 

RED is not niche anymore but as some way to go before becoming as mainstream as WeChat.

Contact us at Next Ren Shanghai to discuss your digital marketing in China and how to include RED

The post Is XiaoHongShu (RED) relevant to market your brand in China ? appeared first on Next 人.

Luxury in China is growing by 6% per year.

This shopping spree for luxury items in China is just beginning. The study is showing an annual growth of 5-6% for the next five years, to reach €157-164 billions in 2025. China is already representing 33% of the global luxury consumption and will reach 41% by 2025.

This dynamic will continue as luxury consumers are young. 48% are below 30 years old and contribute 42% of the sales value. 

Today, 70% of Chinese luxury consumers are still mainly located in China Top 50 cities. 26% of them in the top 4 (Shanghai, Beijing, Guangzhou, Shenzhen) and 21% in the other Tier 1 cities.

WeChat is key in the the path to purchase

The path to purchase is done mainly on digital. It’s even more significant in the initial stages of the journey: 60% of the discovery and 69% of the research happening online.

Social media has a strongest influence for luxury shopper in the early stage. WeChat with its ecosystem influences 50% of the Chinese luxury shoppers. Right behind, Sina Weibo impacts 31% and RED 24% of them . They have the strongest impact during discovery and research stages.

KOL also have a strong influence on 70 % of luxury shoppers, specially for young audience below 30 years old.

WeChat: 80% of luxury purchase journey are ROPO « Research Online, Purchase Offline »

The purchase path is highly digitalized in China, with a proportion of ROPO being 30% higher than global average. It kept increasing of 20 % vs 2018. 

Luxury brands needs to keep in mind that digital marketing efforts in China have a direct impact on the sales overseas.

In term of luxury purchase from Chinese shoppers, offline sales still represent the large majority with only 12% happening online. Overseas offline & travel retail still the largest category with 43% after domestic offline with 32%.

Right after the purchase, digital get back to being a key element as after sales happen online for 66% of the consummers. 

However, digital should now be more and more present offline, with half the luxury consumers expecting digital features in offline stores like smart-fitting (43%) or VR/AR Experience (36%)

What are the best practices for luxury brands on WeChat ?

• Make Data-Driven decisions
• Improve your Social Media impact
• Omni-Channel: provide integrated and personalized experience across the customer journey

Data-Driven

1. Integrate business data across online and offline to better understand customer path to purchase
2. Integrate both local and international data with a global CRM approach to better understand and serve Chinese consumers buying overseas.
3. Monitor in real-time your media campaign with data analysis and A/B testing. Adjust your marketing spend based on real-time campaign results.

Social Media

1. Segment your social media audience and target each group with varied content based on audience interests and specificities
2. Review the performance of your media buying and KOL campaigns to build the best mix for your brand
3. Use social media across all consumers touch-points. It will help providing a great experience to customers far from your physical point of sales
4. Optimize your content creation to offer snackable content for an audience with short attention span. 

Omni-Channel

1. Differentiate content and experience on each touch points and platforms. Offer a customized customer journey to reduce loss of media impact
2. Offer a consistent brand image and experience across all touch points both online and offline.
3. Improve O2O (Online to Offline) to maximize the conversion rate in an inductry where ROPO represents 80% of customers journey.

Read the full report here in English. 

Next 人 is a digital and social media marketing agency who help you building your brand in China. Check out our services here.

The post How WeChat is boosting luxury sales in China ? appeared first on Next 人.