Xiaohongshu is a social e-commerce app worth billions—but can it monetize its trend-setting reputation?
The Chinese spend an average of 102 minutes each day browsing e-commerce sites, the longest in the world. On social media, they lag, but still clock in at a respectable 25th place worldwide—exactly two hours per day, and one minute behind the US.
It was only a matter of time before someone tried to combine the two trends.
Founded in 2013, Shanghai-based “social commerce” app Xiaohongshu (“Little Red Book”) has had a very good year. It had always been a relatively popular platform for buying foreign brands, a hipper alternative to using overseas “purchasing agents” (daigou) via Taobao or WeChat. In 2018, however, Xiaohongshu raised a total of 300 million USD in funding from backers such as Alibaba and Tencent, and grew its users by 40 percent to a total of 100 million, which include celebrities such as Jing Tian, Fan Bingbing, and the cast of reality show Idol Producer.
Digital marketing expert Miranda Tan has attributed Xiaohongshu’s meteoric success to its “uniquely Chinese” characteristics. “Its appeal might be difficult for people unfamiliar with Chinese society and culture to understand,” she wrote for Jing Daily in 2017. As in the case of another Chinese start-up with no clear overseas equivalent, the IMDB-Myspace-Goodreads hybrid Douban, tech writers from outside China have resorted to unwieldy comparisons to try to encapsulate all of Xiaohongshu’s functions—the app has been called a combination of Pinterest, Instagram, and, of course, Taobao.
The app works like an online diary or scrapbook, on which users can share photos and write reviews about different products they’ve discovered, foods they’ve sampled, their travels, or leisure activities. Where it differs from a run-of-the-mill Pinterest board is the ability not only to browse, “like,” or “pin” items from other users’ feeds, but buy them directly through the app. “In China, [social media platforms] get to monetization much faster than the West,” Xiaohongshu’s co-founder, Charlwin Mao, told Wired in 2016.
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Seeing RED: The Rise China’s Hottest Trend-Setting App is a story from our issue, “Curiosities and Quests.” To read the entire issue, become a subscriber and receive the full magazine.