This has resulted in a substantial following exceeding 500,000. While this figure may appear modest within the context of China's expansive consumer market, Ms. Feng's audience—predominantly affluent, independent urban women—represents a highly desirable demographic with a proven capacity for discretionary spending.
Over the past three months, Feng has successfully leveraged Xiaohongshu's livestreaming capabilities to sell a diverse product range, from a 15,000 yuan ($2,060) Carven suit to her preferred 60 yuan/kg brand of rice. Xiaohongshu, a platform comparable to Instagram, has become a key marketing channel in China, despite previous e-commerce ventures yielding limited results over the past decade.
Nevertheless, industry analysis reveals that brands, especially those specializing in niche and premium offerings, are currently experiencing sales growth, despite the challenging retail environment. While many retailers have implemented substantial discounts on competing platforms such as Alibaba's Taobao and PDD Holdings' Pinduoduo to accommodate budget-conscious consumers, Xiaohongshu's focus on aspirational lifestyles is attracting a less price-sensitive clientele.
"Brands highly value a presence on Xiaohongshu, as the purchasing power here is distinctly different from other platforms," stated Suya Wang, general manager at Early Data, a consultancy based in Shanghai. Some brands, including L'Oreal and Tapestry's Coach, have established their own stores on the platform, while many others are collaborating with influencers who showcase a variety of products through livestreaming.
"There is a greater likelihood of reaching the right consumers here, as this is where individuals seek information on female-oriented lifestyle products," remarked Melody Zhao, an investor in the period care brand Enya. She noted that Xiaohongshu e-commerce will be a key focus for the brand's market entry early next year.
Xiaohongshu entered the livestream sales arena in China later than competitors like Alibaba's Tmall and ByteDance's Douyin. However, in 2022, the platform merged its ecommerce and livestreaming sectors, integrating purchasing capabilities directly into livestreams.
Influencers on Xiaohongshu typically adopt a more subdued, conversational style when engaging with their audience, distinguishing themselves from the fast-paced, high-energy presenters found on other platforms that often rely on aggressive sales techniques.
Ian Hylton, president of Ms Min, an independent Chinese designer brand known for its knitted sweaters priced above 5,000 yuan, expressed surprise at the rapid increase in sales on Xiaohongshu after a livestream featuring Chinese actress Dong Jie. He noted, "We never viewed Xiaohongshu as a sales channel; it was primarily a platform for storytelling and brand awareness. However, when Dong Jie endorses Ms Min, we can sell hundreds of items following just one livestream."
Ivan Gu from Magic Advertising, an agency that oversees the social media and ecommerce strategies for luxury brands, mentioned that many of his clients, including Max Mara and LVMH, are increasingly recognizing Xiaohongshu as a significant sales channel.
Future plans, which are still being developed, include launching physical stores, hosting additional livestreams, and appointing brand sales associates as livestream hosts on the platform, a trend referred to as KOS, or key opinion sales, in China.
Xiaohongshu, which translates to "little red book," shares similarities with Meta's Instagram, allowing users to curate and share photos, videos, and text that reflect their lives. In recent years, it has also evolved into a primary search engine for young women seeking travel advice, anti-aging products, and dining recommendations.
The company, a privately owned entity boasting over 300 million users and a valuation of $17 billion following its latest funding round in July, has declined interview requests from Reuters and has not provided answers regarding its sales revenue. Investors in Xiaohongshu include Hongshan (formerly Sequoia China), Hillhouse, Boyu, and Citic Capital.
Xiaohongshu has remained relatively silent about its ecommerce strategy; however, Jacob Cooke, CEO of ecommerce consultancy WPIC Marketing + Technologies, noted that the company has been recruiting talent from competitors such as Alibaba and ByteDance's Douyin, indicating its ambitions.
"We expect to see triple-digit growth in Xiaohongshu's gross merchandise volume (GMV) next year," Cooke stated, predicting that the platform will exceed $100 billion in sales revenue by 2025.
Conversely, some analysts posit that Xiaohongshu will likely remain a niche e-commerce player, posing no substantial threat to larger platforms. Syntun data indicates that Tmall, JD.com, and Pinduoduo—China's top three platforms—command over 90% of the nation's $2.78 trillion GMV.
Beijing-based tech and e-commerce analyst Li Chengdong notes that, "Compared to major platforms, their GMV is too limited, thereby reducing their overall impact."