Xiaohongshu's Rise in E-commerce Sales Signals a Shift in China's Market

Xiaohongshu, a Chinese social media platform similar to Instagram, is gaining traction in e-commerce sales. Influencers on Xiaohongshu are finding success with livestream sales, attracting financially independent urban Chinese women. Luxury brands like L'Oreal and Coach are establishing stores on Xiaohongshu, while others are partnering with influencers for product promotions.

Credit: XIAOHONGSHU

With over 500,000 followers, influencer Tera Feng has found success selling a range of products, from high-end fashion to everyday essentials, through livestreaming on Xiaohongshu.

Unlike other e-commerce platforms facing heavy discounting, Xiaohongshu's focus on aspirational lifestyles is attracting financially independent urban Chinese women who are less price-sensitive. Brands are recognising the platform's unique appeal, with some, like L'Oreal and Coach, setting up their own stores, while others are partnering with influencers for livestream sales.

Xiaohongshu's recent move to combine e-commerce and livestreaming functions has been a game-changer, allowing influencers to engage with viewers in a more conversational manner. This approach has led to unexpected sales surges for brands like Ms Min, a Chinese designer brand, which saw a spike in sales after being featured in a livestream hosted by actress Dong Jie.

As Xiaohongshu continues to evolve its e-commerce strategy, luxury brands like Max Mara and LVMH are increasingly viewing the platform as a key sales driver. Plans are underway to open stores, run more livestreams, and utilise brand sales associates as livestream hosts, a trend known as KOS (key opinion sales) in China.

Despite Xiaohongshu's growing popularity, some analysts believe it will remain a niche player in the e-commerce market, posing no real threat to larger platforms like Tmall, JD.com, and Pinduoduo, which dominate over 90% of China's e-commerce sales. While Xiaohongshu's ambitions are high, its impact may be limited in the grand scheme of China's vast consumer market.

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• Xiaohongshu, a Chinese social media platform similar to Instagram, is gaining traction in e-commerce sales.

• Influencers on Xiaohongshu are finding success with livestream sales, attracting financially independent urban Chinese women.

• Luxury brands like L'Oreal and Coach are establishing stores on Xiaohongshu, while others are partnering with influencers for product promotions.

Source: REUTERS