Tech Buzz China Ep. 31: Alibaba & The Little Red Book (Xiaohongshu): Powering Ecommerce with Content

RELEASED December 6, 2018

In episode 31 of Tech Buzz China, co-hosts Ying-Ying Lu and Rui Ma talk about Xiaohongshu, also known as RED, which had received a $300 million investment from Alibaba. Though the money was injected in June, the two companies have recently announced an additional cooperation that links them at the product level– an integration with Alibaba’s Taobao. What is the significance of these developments, and what is the story of Xiaohongshu? Listeners also hear from Elijah Whaley, CMO of the Chinese influencer marketing platform ParkLU, which counts RED as a client.

Rui and Ying-Ying share that Xiaohongshu’s tagline is “world’s best lifestyle at your fingertips,” and people often refer to the site as “Instagram and Pinterest sprinkled with a dose of Taobao.” The site’s founders, Charlwin Mao and Miranda Qu, are only 33 this year. They first met a decade ago in a US mall, though Xiaohongshu did not exist until Charlwin attended a Tencent-sponsored entrepreneurship camp in his first summer of business school. From the beginning, the co-founders set their sights on the cross-border market, with Xiaohongshu positioned as a community, complete with useful guides and reviews as well as real posts. The initial slogan was “find good things abroad.” This then became “discover good things in the world” and later “good life in the world,” before today’s inclusive “taking notes of my life.”

Rui and Ying-Ying delve into the product features and positioning that distinguish Xiaohongshu. Even though it is a content platform, the app makes money not from ads, but via traditional ecommerce; as of 2017, it sold 50 percent third-party goods and 50 percent self-operated. Though counterintuitive, their strategy has worked: the company is now at 120 million users and 30 million MAU, with a rumored close to $1 billion in revenue last year and double that this year. How has the platform evolved? What differentiates Xiaohongshu’s users from the rest of China ecommerce? What about distinctions in the type of content its users publish? Why is this a smart alliance for Alibaba, and how does the app reflect consumption trends in China?

As always, you can find these stories and more at pandaily.com. Let us know what you think of the show by leaving us an iTunes review, liking our Facebook page, and tweeting at us at @techbuzzchina to win some swag!