China's Instagram-like Xiaohongshu making inroads with e-commerce sales


By Casey Hall

SHANGHAI (Reuters) – Since Tera Feng started documenting her enviable Shanghai lifestyle, including visits to art galleries and fashion events on Chinese social media eight years ago, she has built up a following of more than 500,000 people.

While that is a drop in the vast ocean of China’s consumer market, Feng and brands she works with have found her audience – mainly financially independent urban Chinese women – is willing to spend.

A recent switch to livestream selling on social media platform Xiaohongshu three months ago has seen Feng sell everything from a 15,000 yuan ($2,060) Carven suit to her favorite brand of rice that costs 60 yuan for a 1 kg bag.

Xiaohongshu, sometimes compared to Instagram, has long been one of China’s most important marketing tools. It has made several e-commerce pushes over the past decade without much success.

But now, consultants say brands, especially those peddling niche and high-end products, are finally seeing sales breaking through this year amid a difficult retail environment.

While retailers have been forced by penny-pinching consumers into heavy discounting on other e-commerce platforms such as Alibaba’s Taobao and PDD Holdings’ Pinduoduo, Xiaohongshu’s focus on aspirational lifestyles is attracting less price-sensitive users.

“Brands really value a following on Xiaohongshu, because the consumption power is totally different” to other platforms, said Suya Wang, general manager at Early Data, a Shanghai-based consultancy.

While some brands including L’Oreal and Tapestry’s Coach have opened their own stores on the platform, many brands are also investing in partnerships with influencers who livestream selections of products from multiple brands and categories.

“There is a better chance of us being discovered by the right consumers because this is where people go to research female-oriented lifestyle products,” said Melody Zhao, an investor in period care brand Enya. Xiaohongshu e-commerce will be a priority for the brand’s market entry early next year, she added.

Xiaohongshu was late to the livestream sales boom in China led by Alibaba’s Tmall and ByteDance’s Douyin, but in 2022 it combined its e-commerce and livestreaming divisions, incorporating purchasing functions into livestreams.

Influencers livestreaming on Xiaohongshu tend to employ a quieter, conversational tone when speaking to viewers, setting themselves apart from fast-talking, high-energy hosts on other platforms that use aggressive sales tactics.



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