Xiaohongshu, or ‘Little Red Book’, is commonly referred to as the Chinese version of Instagram due to its visually driven, user-generated content. The app, which combines social media and e-commerce, has long been a significant source of inspiration for brands looking to reach and engage with customers in China. However, many retailers may not fully realise or harness its potential.What is Xiaohongshu?“Xiaohongshu emphasises original content and user engagement, encouraging users to share personalised life experiences and emotional connections,” Ashley Dudarenok, founder of China-based digital consultancy ChoZan, told Inside Retail.“Compared to other platforms, it places greater importance on the quality of text and images and adopts a strict policy towards advertisements, plagiarism, and low-quality content. Users on Xiaohongshu strive to create valuable, tasteful, and distinctive content that resonates with and engages readers.”Dudarenok said a unique characteristic of the platform is its deep collaborations and relationships with brands, institutions, and key opinion leaders (KOLs). The app also provides creative tools and monetisation opportunities, encouraging users to realise their creativity and value on the platform.Founded in 2013, the Chinese social platform has more than 300 million monthly active users, with 70 per cent being female. The community has over 80 million users that actively contribute to the platform, with user-generated content (UGC) accounting for 90 per cent of posts.“Xiaohongshu also sees itself as a trendsetter and is often not just curating trends, but also creating trends and growing them to maturity through their army of KOLs and boosted trending topics as well as selected traffic,” she said, adding it was the platform behind the popularity of the recent ‘city walk’ trend, which involves people exploring urban areas in a relaxed, thoughtful way.Brands benefiting from the app Xiaohongshu started as a platform for recommendations on fashion, restaurants, beauty, and travel.A notable example of a brand leveraging Xiaohongshu for growth is the Chinese brand Into You. By using multiple accounts to engage with trending topics and promote products, the makeup brand successfully expanded its reach and engagement on the platform. Recently, the brand effectively utilised the ‘Nude Gate’ trend, which gained popularity in July and continued to grow.“The results were impressive, with approximately 380 Xiaohongshu shops selling Into You products, besides their official store,” Dudarenok said. She noted that in the past 30 days, over 100 shops generated direct sales, significantly contributing to the overall sales figures. Distribution shops made up 40 per cent of the total sales, highlighting the effectiveness of Into You’s multi-account strategy in boosting product visibility and sales.She also mentioned the success of the local dairy brand Zhadian in attracting customers through Xiaohongshu.“Zhadian Dairy’s strategy was highly successful, expanding their reach from a core audience of 200,000 to 6 million health-conscious users. With a minimal spend of RMB30,000, they achieved significant engagement and sales, resulting in millions in GMV conversions,” she added. How can brands utilise it?To fully leverage the platform’s potential, retail brands should adopt a mix of strategies. Dudarenok highlighted five key approaches: collaborating with KOLs, boosting UGC, creating visually appealing content, using relevant hashtags, and running interactive campaigns.“The core of increasing Xiaohongshu fan interactions is publishing interesting, unique, and personalised content. For example, you can share your own insights and thoughts on some hot topics, or share some practical tips and experiences,” she said. She also emphasised the importance of regularly publishing new content. “Xiaohongshu is a platform with very strong interactivity, and the interaction between fans and bloggers is also very important,” Dudarenok added. “Actively replying to comments and private messages can enhance the sense of belonging and loyalty of fans, and also promote interaction and communication between fans and bloggers.”  Meanwhile, it’s crucial for brands to be fully aware of the diverse set of challenges they will face when it comes to creating content on this rapidly growing platform to increase their exposure and engagement with potential customers. According to the expert, one significant challenge is the lack of established universal models on Xiaohongshu, which makes it difficult for brands to develop a consistent and effective content strategy. Additionally, the platform’s unique algorithm and user behaviour patterns add another layer of complexity that brands must navigate to achieve their marketing goals.“For example, on other e-commerce platforms, the product retention, brand data, and sales data are fully integrated – consumers’ journey from seeing product-seeding content to the final purchase is very clear. The content preferences of specific user groups, such as students, white-collar workers, or pregnant women, can be clearly identified,” she said. “However, it is challenging to replicate successful logic on Xiaohongshu.”First and foremost, that is because high-performing content and high-volume content are not necessarily equivalent on the platform, she said. “Secondly, it is also challenging to summarise the logic behind high-performing content. Additionally, the data between Xiaohongshu’s in-platform e-commerce and seeding content is not fully integrated.”What to expect?The platform has notably doubled down on e-commerce, finally achieving more than RMB100 million in live streaming gross merchandise value. It has also made repeated adjustments to its organisational structure. “For Xiaohongshu, e-commerce is a business that can break through the platform’s ceiling,” Dudarenok said. “Although at the current stage, live commerce may not be the highest ROI monetisation method for native bloggers, the ability for a 100,000-follower blogger to generate between RMB3 million and RMB4 million in a single live stream is still very enticing.“If you are riding a trend from early on, the wave can carry you quite some distance.“People will continue going to this app to search for recommendations on where to go, what to do, and how to do it – during the day in their ‘fragmented time’, just like reading magazines and watching TV in the past,” she added. Dudarenok expected the platform to further embrace a ‘social commerce model’ and aim to expand this revenue stream. The platform will continue attracting creators willing to populate it as more small businesses and students are looking for ways to get their products, services and offerings in front of consumers. “Despite the slow kickoff and muted consumer sentiment across the country this year, Xiaohongshu aims to find a way to sell directly on the platform through all: official accounts, KOLs and UGC content. They have a 50 per cent chance for success here. Only time will tell,” she concluded.