Is Xiaohongshu Becoming Dangerous for Luxury Brands?

What happened The Gen Z-favored lifestyle platform Xiaohongshu is under fire. The social networking site, which cemented its reputation thanks to users sharing word-of-mouth reviews on fashion, food, and travel, has been heavily criticized for its supposedly inauthentic and overly beautified posts. One travel destination, for instance, was especially popular on Xiaohongshu’s feed during the recent National Day holiday. Dreamy photos of Fuxian Lake in Yunnan Province circulated on the site’s feed, pushing it to become a tourist hot spot. However, the reality disappointed many visitors because there was little trace of this “heavenly resort,” apart from red mud on its shores. Understandably, netizens quickly unleashed their vitriol onto the posts and the platform. Following the controversy, the platform issued an apology statement and promised to launch a rating list for travel sites, allowing users to share their genuine opinions. The Jing Take This incident has harmed Xiaohongshu’s clean reputation. The social platform has built its empire through trustworthy, user-generated posts, leading it to become a crucial online touchpoint for luxury consumers in China. And netizens take the term “grass-rooted” (种草), meaning to discover products and make purchases decisions based upon the recommendations of others, very seriously. According to data from qian-gua.com, nearly half of Xiaohongshu's users are Gen Zers between the ages of 18 and 24, making them a perfect target for luxury houses. And since it severely impacts shopper decision-making, securing positive reviews on the platform has become crucial for companies. Given that, Xiaohongshu has also become a great marketing tool for advertising. Micro and nano influencers, who most see as “genuine” and “trustworthy,” have become favorite collaboration partners for brands. So will upset netizens leave the platform? That may be less likely. People will become more skeptical about the content shared but will continue to find inspiration on the platform and be more attentive to negative reviews. Most expect Xiaohongshu to regulate its community better and improve regulations on posting standards. Yet, the problem posed to brands is how to give more attention to consumer complaints on the site and actively help them solve related issues to gain a good reputation. The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.

Is Xiaohongshu Becoming Dangerous for Luxury Brands?

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Published October 21, 2021

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Is Xiaohongshu Becoming Dangerous for Luxury Brands?