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Social commerce, which mixes e-commerce with social media, requires a new approach for brands. Buyers expect a more intimate environment, where they’re face-to-face with influencers or sellers in real-time. Sales can be made or lost in seconds.
That’s why Little Red Book or Xiaohongshu’s founder Miranda Qu cautions brands that before jumping into live selling, they should think about dating their consumers. To her, taking the time to get to know future buyers is key to building any long-term relationship with them.
“Be friends, even date your next consumer on Xiaohongsu,” Qu told Signal 2019’s audience. “I believe every brand is a person. Every brand has its own character.”
TRANSCRIPT
Miranda Qu
Hi, everyone from China. I flew all the way from China to Signal, and thanks P&G for having me today. It’s my great honor. Hopefully during that video, you have a better idea of what is Xiaohongshu. I’ll just further give you an impression of what we’re doing. We’re, they’re honored to be listed on CNBC this year. And what CNBC call us is the China’s book transporting app. So if you want to know the trend in China, you should log on your cell phone right now. And the other I know Fast Company here, thanks for the word we’re called the most innovative company in 2019. And, you know, the two ahead of us are Meituan, a company listing in Hong Kong and Alibaba Group, as everyone here is very familiar with. What is really Xiaohongshu? We call us a lifestyle community of young people, by young people for young people. We’re the lifestyle community that built by Chinese New Generation. Look at some data. Among the 1.3 billion Chinese over 549 million are post 90s. And amongst 300 million registered users of Xiaohongshu, over 70% of them, which is over 210 million are post-90s. So we have the next generation, we have the next market in China. And you still remember the keywords lifestyle, community lifestyle sharing platform? To me lifestyle is a very magic word. In China, we sometimes we often talk about life. But in recent years, we’re beginning to talk about lifestyle. What is lifestyle? In Chinese, we have a very awkward translation. To me, it’s life with style. And I want to share with you some of the really interesting styles in China right now. The first one BB Cream. I think everyone here is very familiar with BB cream. It’s a cosmetic for ladies like me to put on every day. But now in China, you know, a lot of young males, they put on BB cream every day before they go to work.
One day I was talking to one of my engineers, and I asked what are your morning routines? And he told me, ‘Of course I wear BB cream. I have to be perfect to my work every day.’ And I still remember last time I send all my team to Thailand for a team building. I see in one of my young male colleagues bag, there’s makeup remover. I was astonished to see that, you know, a makeup remover. I asked him, ‘Why makeup remover?’ And he told me, ‘I really don’t know. You know, I wear sunscreen every day. So I really need makeup remover to make sure my face is cleansed every day.’ So that’s the life with the style going on China right now. I think my some of you are not familiar with that. But you should really look at what’s going on. It’s very interesting. We have tons of stories like that, about changes in China, in Chinese New Generation. Further look to the data. We generate 3 billion impressions on Xiaohongshu every day. And among that 70% of them are user-generated content. I love that. I think the most powerful content comes out UGC. During my last meeting was Mark yesterday, I totally agree that they’re the ordinary people around you, your friends, your families, there the outcome, I’ll quote your word, AKOL, Authentic key opinion leaders around you. They are the ones who influence your choices, your inspirations, they’re the ones to tell you where to draw, where to travel. So that’s the power of UGC content. They’re not generated by creators by influencers. They’re the true opinions around you. So we’re very proud that 70% of the impression comes from the user generated content, though we have a lot of famous people, celebrities, we have Kim Kardashian, who have Kelly Claes who have Marina Cars. Those are famous names, you know. But we’re still very proud about our ordinary users.
After all the data I’ve shared, you may have a question in your mind, I know all of you are brand expert. What are the brands? What can brands do? I’ll show you I’ll share share with you one of the examples here on Xiaohongshu. And also it’s a Chinese cosmetic brand called Perfect Diary. It’s very interesting. It’s only a three year brand. But last year, you know, China has this kind of like Chinese Black Friday, with what’s called Singles Day. This brand achieves 100 million sales within 90 minutes. 100 million RMB sales within 90 minutes. This is a three-year cosmetic brand originated from China. So everyone wants a brand like that, right? So what do they do? They first open a brand new account on Xiaohongshu only. It’s like a brand new account to tell the brand stories to share the mission, the vision, to share a lot of makeup tutorials to show people how to wear lipsticks, how to match the colors. And they initiate a lot of engagement with the users. The initiated a makeup contest. And before the launch of the product, they initiated a lot of free trials. They talk with the consumer, they make the consumer feel this is my brand. They co-created the brand with the consumer and the consumer voted with the money and it was the engagement. I think this is the new trend not only in China, but also in U.S. many other parts of the world. People really want to be engaged with the brand. This is some of the data I wanted to share more. This is the research report by Accenture, which showed that even more percentage of Chinese young consumers rely on social media for product discovery, which they might not have too many U.S. social media that they have Xiaohongshu, they have a lot of Chinese social medias.
Last but not least, I would like to share one of the example with P&G. It’s Downy. Downy I think it just launched in China, I think last year, It was a great success. And if you searched on a young Xiaohongshu, you will find a lot of keywords and not by our another the branding words by P&G, but you know, our user called them, you know, perfume to wear. People mentioned them. ‘You have to wash your clothes with Downy, before you go to date, before you go to Hotpot.’ There are lots and lots of interesting stories with Downy. And for all those stories is true user experience. So to conclude, I think what brands Xiaohongshu is engagement and experience. But luckily, they achieve great success. Because we’re not only a social platform, we’re still a social commerce platform. We started this e-commerce platform and marketplace, four years ago. Actually, the company is only six years. So last, just want to share with everyone the view here again, the company mission, we’re a six-year-old company. Myself, I never study overseas or work overseas. But I really want to build an international company with international community, a lifestyle community to inspire more lives. Thank you, everyone. I’ll look forward to more. Thank you.
John Battelle
Thank you have a seat right here. I want to ask you all sorts of questions.
In your presentation, and in the videos, a lot of it was in Chinese. Okay, yeah. That means that my kids can read it, but I can’t. So I’m I really want to understand a little more, the why, of your massive audience of young people. In the United States, we were very good at categorizing our new companies, right? You know, YouTube’s where you do video user-generated. Facebook was where you connect it to your friends and Instagram was where you shared your pictures? This feels like all of that and more. Pinterest was where you had your inspiration for what you might want to do. Is this all of that and plus? Is there a headline to how you describe the service?
I would think in the future, of course, we want to be where Chinese people share their lifestyles to inspire more lives. That’s the company mission. We also got some media headline called ‘Chinese Instagram, plus Amazon,’ because we’re doing very different things.
Just Instagram and Amazon. That’s all.
They’re very big enough. So I dare to say that. But I think on the front end it’s very UGC, very busy social media, where people share the daily life, where they go to travel, where they go shopping, the islands, the crazy new things they’ve bought, and the dining experience. Besides, you know, when people get inspiration, especially inspiration about shopping, people want to get one-stop experience. That’s why we offer e-commerce, about four years ago, right? When people get inspiration, for example, someone sees a shampoo in a nice bathroom, and they really want to get that experience. They don’t want to jump to another app and search. They want to get in now. So experience and efficiency are very, very important. That’s why we’re called Social Commerce. We started like, really long, long ago.
And is this social commerce part of your business, the largest growing part of your business?
Yes. Yes. So the trend section is very, very important. I do think that is the future for all the lifestyle platforms. Because you know, through through all the inspiration, you see, you really want the experience. You do not only want to see, but you want to experience. That’s why we believe social commerce and we believe the transaction is very important. And that’s what we did with P&G so far.
Tell me about the founding story. How did you come to to this idea? Tell me your founding mythology, if you will.
My partner and I we were just Chinese young people, too. So, at that time, six years ago, we were very much into lifestyle, and we believe that the consumption upgrade will be the next trend in China, but we really don’t know where to go. And we never imagined, now, where we’re holding a company of 2000 people. People never imagined that, but we just have this mission. So we just started, but we met numerous challenges along the road, I believe there were a lot of startups and care. It’s really, difficult. And we were really lucky.
Well, you’re probably pretty good is my guess. You, you mentioned some of the cultural parts of the of the platform. But can you pull back and, and give this audience a sense of how is the Chinese consumer culture changing? And what do you think is, in the next year, or two or three, what insights can we take away from what you’re learning every day?
I think there are some interesting or hopefully unique insight on the platform. China right now is largely undergoing a consumption upgrade. We see mainly three trends. The first one is, everyone wants to be different. That means a lot of young people prefer newer brands, smaller brands. They don’t want to use any products that parents are using. It’s very, very important. They just want to be different. Though the brand is still very good, the quality is super, but they just want to be different. So there’s come to a lot of new opportunities with smaller brands, new products, newer brands, and brands with stories was good designs. So that’s the first trend, I think people are there to be different. We’re very confident that we want to try out the new products. So here’s come the chance.
The second, very interesting that I think this upgrade starts from bags. Cosmetics. I think maybe five years ago, I will be very proud if I’m wearing a Louis Vuitton bag, and Chanel lipsticks. But that’s because I really care what other people think of me. But right now in China the consumption upgrade is from living room, to bathroom,. When they are enjoying a luxurious shampoo in my bathroom, no one knows it. It’s a very personal experience. But I love the smell, I love the touch. I feel it’s a way to love myself. That’s not what I say. It’s a note, it’s a post on Xiaohongshu from a lot of our uses. We have people like that on platform every day. So people value personal experience, rather than what other people think of them. The third, which is very interesting, I think echo a lot of previous conversations, is that the consumption upgrade. Now slowly emerged from material world, from shopping, for everything to spiritual world. It’s all about entertainment, it’s about movies, about games, videos, everything. So the quickest, you know the content that growth fastest last year on the platform, travel, fitness, entertainment, movies, books, all about that. So it’s very interesting. People do not only care about what they buy, but they really care about their own experience, their spiritual experience. There comes a lot of new marketing opportunities as well to partner with all the spiritual world.
So this is integration. Because your roots, were in shopping. Your roots were in acquisition of particularly luxury goods. As you moved into this space, it’s a sort of social exposition if we’ve got that right.
That’s a very interesting story. We started from telling people how to shop overseas. That’s about six years ago. At that time, you know, on 2013, China become the number one country for people to travel overseas. So people really need information badly. But you know, from that thing, we gathered the people who live a lifestyle most. So our content are not organized by category. We don’t organize content. We don’t. We don’t generate any content ourself. We just gather people. So the people we gathered on the community are the people who love lifestyle most. So later on, they share everything about their lifestyle. They share fitness, they share travel, they share what books to read. So that’s the growth of the platform. So we just gather people, to encourage people to share their lifestyles. So that’s why we started from the shopping or shopping thing. And quickly, we’re lifestyle platform
Do people, people follow each other? Do they follow brands? Is there a friend network as well?
Yes, they follow any content they’re interested in? Yeah, they follow brands as well. A lot of brands have brand new account with us. The Perfect Diary? You remember, the great example I’ve been given now, he has over 1.6 million followers on Xiaohongshu. That gives them about business.
Now, one of the trends that we’ve noticed over the past eight years of Signal is that, you know, there’s an extraordinary set of startups who have gotten quite big in China. But they haven’t really broken into the United States market. In the past year, we’ve seen that happen with Tik Tok they’ve made an acquisition and you know, ByteDance e made an acquisition of Musically and then all of a sudden TikTok seems to be, I can’t keep my kids off it. Do you have plans to go into the United States market?
Ah, I think for users, the market strategy is we’re still mainly focusing in China but there is going to other Asian countries because the couch is somewhat similar. But we partner with a lot of U.S. brands and U.S. creators. I’ve just mentioned a lot of names Kim Kardashian, Kelly Claes, they’re both very big and some short video celebrities. We also have kinds of celebrities and the influences are in Japan and Korea. They do great great content on Xiaohongshu. Of course because of the majority continents doing Chinese there are a lot of overseas Chinese are using Xiaohongshu and they consider it a major platform to share their lives right? Yeah, right. So of course, we have English version everyone feel free to download it and upload your lifestyle pics, you will text with friends and families we will pass videos. Our main market right now is still for Chinese people.
Final question, and we’re already out of time, but I’m gonna ask it anyway. How best would you suggest companies like P&G work with you? What what are the sort of top one or two things that companies do well, and what mistakes are made on your platform?
P&G is already very important partner with us. Yes, we have marketing and sales cooperation. But I do have some more advice to more brands here. First, that be friend even date your next consumer on Xiaohongshu. Start with the social because I believe every brand is a person. Every brand has its own character. You should just log on Xiaohongshu and tell your next consumer who you are, what kind of person you are. And they’re your date you should attract them. You cannot just be there and inform them and educate them, like with a kind of TV ads or billboards. You should date them. You should listen to their needs and really befriend and even have a date. And the second of course, do the transaction. To me transaction this is the experience. Of course now you exchange some nice photos with each other. And you want an experience. You want them to experience your products, which is really really important. Last but not least, I have a secret for every brand who is here. A lot ofour partners asked me, ‘How do I enter the Chinese market. How can I get a better understanding of Chinese market?’ I know every one of you traveled to China with colleagues who have Chinese teams. That one little secret I found last year is please talk to Chinese interns. interns are very, very important in the company
There’s a whole room of interns downstairs going crazy right now.
I have the two stories last year, here, ColourPop a U.S. cosmetic brand chose Xiaohongshu to be the launch pad in China. And I think we achieved $150,000 sales on the first day of the launch on Xiaohongshu alone. $150,000 plus. because when I wanted to talk to the brand that why Xiaohongshu, why you chose Xiaohongshu, they said, ‘We have a Chinese intern who recommended Xiaohongshu to us and the intern apply for the brand account, because we received the email. And wow how ColourPop came to us and it’s a great Corporation. I do know, and I do think that Gen Z knows where to go.
Another story is with Disney. I’m a huge fan of Disney. Last week I was in Disney, California. And our tour guide, I brought some influencers. They have a very senior executive from the company was but the experience I enjoined the most is with another Chinese intern for Disney. She shared a whole a lot of how to do content on Xiaohongshu which I’m really really impressed how to do Disney content, how to share the Disney experiences. So I got very inspired by all the interns Chinese interns in U.S companies. So please, please talk to interns. ‘Hi interns!’
Well, please join me in thanking Miranda for coming to Signal.
So a personal request. I do want you to take a selfie with John on stage and I’m going to post our audience. So everyone, you are going to be on Xiaohongshu very soon.’Hi! Say cheese! Thanks.
