Xiaohongshu

 

“Inspire lives, share and discover the wonderful world”

Founded:Jun 2013 in Shanghai, China

Category:E-Commerce Platform, Mobile Apps

Primary office: Shanghai, China

Status: Private

Employees:800+

Amount raised:$418 million(7 rounds – June 2018)

OVERVIEW

  • Lifestyle sharing platform for young people to record their life through short videos, text, pictures, etc.
  • Provides an authentic, progressive and diverse community atmosphere
  • Attracts people to explore the possibilities for a better life

 

PERFORMANCE METRICS

  • Valuation: $3 billion (June 2018)
  • Estimated annual revenue: $500 million to $1 billion
  • Web Traffic: 15 million+ monthly web visitors
  • Number of users: 300 million (July 2019)

 

ACHIEVEMENTS

  • 3rd in Forbes China 50 Most Innovative Companies (2019)
  • Listed in China’s Top 100 Internet Companies (2019)
  • One of China’s 10 most innovative companies (Fast Company, 2019)
  • Total number of users exceeds 300 million (2019)
  • 100 million (approx.) monthly active users (2019)
  • World’s largest consumer “word of mouth” community and e-commerce platform
  • Recognized by Bloomberg as “a bridge connecting Chinese and foreign consumers” (Boao Forum, Asia Annual Conference, 2018)

Sells

  • Marketplace platform integrating social media and e-commerce – connects Chinese consumers with global brands (fashion, personal care, make-up, food, travel, entertainment, reading, fitness, mother and baby, and other lifestyle fields)
  • Welfare Society – self-operated e-commerce platform for time-limited product sales

Channels

  • Online and Mobile Apps (iOS & Android)
  • Xiaohongshu community, which generates more than 7 billion note exposures per day, of which more than 95% are UGC (User Generated Content)
  • Advanced algorithm which pushes precise content to user’s discovery page (based on user’s web behavior)
  • Hire celebrity endorsement and collaborate with KOLs (Key Opinion Leaders) to influence customers
  • Sponsors influential TV shows to increase awareness
  • International partnerships – e.g., Lancôme, Swisse and Innisfree

Competencies

  • Strong community traffic and high conversion rate from website visitors into e-commerce customers
  • Use of big data to deepen customer understanding and match products to their needs
  • Integrating social networking with e-commerce
  • Governance of unique community atmosphere that guides public opinion and creates best-selling products
  • Raising substantial funds (raised $300M in Series D fund) with major lead investors (e.g., Alibaba Group)

Resources

Assets

  • Scalable social/e-commerce platform
  • Artificial Intelligence/Big Data algorithms to improve customer experience
  • Strategic partnerships (e.g., Alipay, WeChat and Taobao)
  • Product R&D team
  • Lead investors (e.g., Alibaba Group)
  • Private label – REDelight
  • Extensive commodity supply chain and logistics resources
  • Celebrity recommendation and KOL diffusion
  • Loyal community fans and users

Processes

  • Product development and maintenance
  • Maintenance of an atmosphere of sharing discussions among users in the community
  • Provide convenient and reliable online payment channel through Alipay and WeChat
  • Diversion and acquisition of new users by the operations team
  • Build on massive UGC (User Generated Content) and work with KOLs (Key Opinion Leaders)
  • Convenient payment system
  • Develop fully functional and user-friendly mobile app
  • Enterprise Marketing that integrates the company’s resources from community marketing to closed loop transactions (direct purchase from vendors), improves connections between consumers and brands, and assists brands to complete one-stop closed-loop marketing

Priorities

  • Authentic sharing of shopping experience so as to earn the trust of users and improve conversion rate
  • Global network of sellers
  • Constantly increase sales
  • Expand public influence

Assertions That Best Describe What the Company Did to Scale Early, Rapidly & Securely

  1. Apply big data analytics to produce insightful information about users, suppliers and customers to enhance shopping pattern analysis, improve customers experience, predict market trends, provide more secure online payment solutions, increase personalization, optimize and automate pricing, and provide dynamic customer service
  2. Continuously improve the user interfaces and applications that directly influence the entirety of the customer experience including personalized content, quality messaging, and the delivery and returns process
  3. Enable power users to help improve company offers using the internet
  4. Adapt company opportunities based on feedback from customers and investors
  5. Build a community around company brand, products and services, assemble community feedback and adapt
  6. Apply ecommerce to provide customers with buying options that are quick, convenient, and user-friendly
  7. Use a cross-channel customer-centric approach to provide a seamless, unified, and contextual customer experience, irrespective of device, channel, or platform of interaction
  8. Establish trust and positive rapport with your customers that leads to long-term, mutually beneficial business relationships
  9. Enable partners to leverage your company’s platform to make money

References


Contributors

  • Nan Yang