Xiaohongshu cultivates new consumer behavior in China

Bingge Liu

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What’s Xiaohongshu

Xiaohongshu, also known as RED and Little Red Book is a Chinese social media and e-commerce platform launched in June 2013. It has over 300 million registered users with 1/3 of them being monthly active. Xiaohongshu is particularly special among all social media channels not only because it combined cross-border e-commerce function, but also because its user poortrait: 86.1% users are females, 83.7% are under 35 years old and 62.5% live in 1st- and 2nd- tier cities (CNBdata).

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“小红书”的图片搜索结果
Xiaohongshu

Xiaohongshu has spawned a new consumer behavior economy— “种草(zhòng cǎo) economy”, where 种草 could be literally translated as planting grass, referring to a recommending behavior. This kind of economy is gradually shifting the purchasing decisions of more and more young people, from grass-planting (recommending) to grass-harvesting (purchasing).

However, this economy model depends heavily on the content in the pool. It is important to optimize internal content before attracting external diffusion. Xiaohongshu sloganize itself as “Mark my life. World’s best lifestyle at your fingertip”, encouraging young people to share lifestyle, together to create the inside out planting-grass phenomenon on the platform. 

The Mechanism

To be more specific, grass-planting economy of Xiaohongshu is based on three main components: 

1. Users and contents

Users of Xiaohongshu gathers a large number of influencers, celebrities, KOLs and the largest proportion of amateurs.

Content of Xiaohongshu is the notes posted by users. Original and objective notes accurately conveys the writer’s ideas is what other users and the platform prefer the most. The content covers all areas of users’ interest such as beauty, travel, shopping, food and fitness etc.

2. Recommendation mechanism (the algorithm)

Xiaohongshu’s algorithm is the core. It uses machine to automatically extract and filter data to match the content with user behaviors and preferences and complete efficient recommendation display. The main dimensions of its algorithm are user profile, user behavior, and content keywords.

3. Traffic distribution

The traffic distribution follows the 80/20 rule, referring that 80% traffics coms from head accounts that make up only 20% of the community. It is because that head users are mainly influencers and celebrities who have more followers and generate more content output with a higher frequency and quality.

Partners with Xiaohongshu or MCN(Multi-Channel Network) organizations can also get the tilt of the platform traffic. Besides, user’s level of activity and engagement can also affect the traffic distribution. These rules are relatively fair traffic distribution mechanisms established by the platform through long-term operation.

New Consumer Behavior

Till now, we can see that Xiaohongshu has shortened the traditional consumer behavior journey of attention-interest-desire-memory-action by building a new economy model conceived together by Xiaohongshu community and macro society environment. Indeed, the new model has restructured a new consumer behavior: attention-discover-approvement-action.

With the development of the Internet, consumers have begun to actively seek information instead of passively accepting indoctrination. Xiaohongshu made full use of the trend, guiding influencers to share their preferences and drive consumer trends, so to provide a sense of approvement and accomplish user conversion.