Inside Xiaohongshu’s meteoric rise

“Xiaohongshu shows me how I want to live my life, where to go and what I want to wear, or eat while doing it,” says Juny Chen, a 28-year-old tech professional living in Shanghai. Beauty slang such as “morning C” and “late A,” as well as “skin fasting” and many of the fashion core trends like Asian Baby Girl, barbiecore or cleanfit have all risen to popularity on Xiaohongshu. On Xiaohongshu, 87 percent of beauty enthusiasts consider the app to be their main source for discovering new brands and products. And more than any other app, Xiaohongshu aims to inspire. In Chinese digital culture, Xiaohongshu is known for being jingzhi, meaning sophisticated. It stands apart from other social media apps. Douyin and Weibo are both mainstream, whereas Xiaohongshu targets those who are looking for niche and aesthetically-pleasing trends, such as meticulous skincare rituals, chic weekend brunch venues and other luxurious experiences. Founded in 2013, Xiaohongshu (also known as Little Red Book) was initially created to fill a critical information gap for Chinese travelers grappling with which luxury, or skincare items to buy in Hong Kong. Recognizing the Chinese penchant for meticulous pre-purchase research, the platform evolved to include user-generated recommendations for other popular travel destinations, like Thailand and Japan. Most luxury labels, including Louis Vuitton, Dior, Gucci, Prada, Celine, and Balenciaga have a presence on Xiaohongshu. Notably in 2022, Lancôme emerged as the most engaged luxury brand on Xiaohongshu. During the first six months of 2022, Lancôme published 1,963 posts on this platform, successfully garnering more than 6.5 million interactions from users. Growing the green ‘grass’ of desire Xiaohongshu's appeal lies in its unique community model. The platform encourages a flow of authentic, user-generated content. The app deftly combines social networking and e-commerce, offering a multifaceted platform where users engage in sharing personal updates, shopping experiences, and lifestyle tips. On Xiaohongshu, this is called “grass-planting” (种草). Grass-planting is the phenomenon of developing a desire for a product, or item upon seeing it used by friends or family, or in advertisements. This term is part of a trio of expressions that describe the journey of consumer desire. Another one is “growing grass” (长草), meaning to “grow longing for a product.” Conversely, “plucking grass” (拔草) signifies the satisfaction of this desire, either by purchasing the item, overcoming the urge to buy, or extinguishing the initial desire. Recommendations are crucial to growing grass. Chen says, "I trust the recommendations on Xiaohongshu. It feels like asking or receiving advice from a friend rather than an ad. I follow girls who have good taste." Users on the platform post about 3 million comments daily asking KOLs for links to buy products mentioned in the posts, according to Xiaohongshu. This authenticity is key in a market where traditional advertising often falls flat, and it fosters a vibrant community united by common interests. “If I’m traveling, I’ll look up the best hidden hiking spots, or restaurants on Xiaohongshu,” Chen says. The platform has inked partnerships with institutions like Tourism New Zealand and Hong Kong Tourism Board to promote the corresponding destinations among users. Extraordinary growth In recent years, the app has grown to a user base of over 200 million, mostly women under 30 from the high-income tier 1 cities such as Shanghai, Beijing, Guangzhou and Shenzhen. What’s more, Xiaohongshu has witnessed a staggering e-commerce expansion over the past 18 months. The platform has experienced a 27-fold increase in its base of buyers and sellers, a remarkable 10-fold rise in active merchants, and a significant 12-fold uptick in purchasing users, showcasing its burgeoning influence in the digital marketplace. In addition, insiders suggest the company achieved a net profit of $500 million in 2023, far surpassing its initial forecast of less than $50 million at the start of the year. “I never buy any high-cost products without first looking on Xiaohongshu for reviews,” says Chen, who adds that she uses the app for “everything.”

Inside Xiaohongshu’s meteoric rise

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Published January 05, 2024

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Inside Xiaohongshu’s meteoric rise