How does Xiaohongshu marketing work? – A cosmetics brand case study

Tingyi Chen New WeChat features

Perfect Diary is a Chinese budget cosmetics brand that was founded in 2015. It has quickly become the No. 1 Chinese cosmetics brand on Tmall. Its success has a lot to do with Xiaohongshu.

We will look into how exactly Perfect Diary markets on Xiaohongshu.

How big has Perfect Diary become in 4 years?

Sales records

  • On September 9th, 2018, Perfect Diary’s surpassed L’Oréal in sales volume to become the No. 1 cosmetics brand on Tmall
  • On Double 11, 2018, Perfect Diary became the 1st brand to reach RMB10 billion of sales within the day. The time it took to reach this amount was 1 hour 28 minutes.
  • Jan 2019, Perfect Diary ranked No.7 in monthly sales volume on Tmall. It was the only Chinese brand to make it to the top 10 list
  • During the Mid-year sales, June 18, 2019, Perfect Diary ranked as No.1 in the 1st hour among all Tmall cosmetics brands

Social media stats

Perfect Diary is one of the largest company accounts on Xiaohongshu.

  • 1.69 million Xiaohongshu followers
  • 1.9 million likes & bookmarks
  • > 100k Xiaohongshu notes
  • 447 posts as of August 2019, average likes is 500-1,000

Comparatively, the top Chinese skincare brand HomeFacialPro has 107K Xiaohongshu followers. L’Oréal has 174k XHS followers, and Olay has 275k followers.

On WeChat Index, Perfect Diary has surpassed L’Oréal and HFP.

The Xiaohongshu marketing strategy

I traced the digital footprints of Perfect Diary’s product launch to uncover its Xiaohongshu marketing strategy.

Daydream is a new product launched by Perfect Diary on the Chinese Valentines Day (August 7th). As of today (5 days after the launch), over 24k bottles have been sold on Tmall, worthing RMB 2.6 million.

Although the sales on Xiaohongshu is not comparable to Tmall, most of the traffic is driven from Xiaohongshu.

KOL spending pyramid: a Xiaohongshu campaign with over 150 KOLs

WeChat KOL campaigns are focused on a single KOL’s quality. However, a Xiaohongshu KOL campaign is more like a pyramid: it is the combination of a few top tier KOLs and lots of smaller KOLs.

Perfect Diary collaborated with over 150 KOLs to launch the new product. Most of the KOLs posted 1 week before the product launch. The chosen KOLs has a wide range of follower size, starting from a few hundred all the way to >100k.

Zooming in to the top-ranked Xiaohongshu posts that mentioned Daydream, only 5 of the notes are coming from KOLs with over 100k followers, while the rest are smaller size KOLs. Just like a pyramid.

The promotional cost spent on KOLs from each tier is like a reverse pyramid. The top-ranking KOLs are a lot more expensive than those from the lower tiers.

I checked the cost of the KOLs chosen in this campaign. The fees below are, of course, only estimates:

  • 7,000RMB for KOLs with >100k followers
  • 3,500RMB for KOLs with 50-100k followers
  • 1,500RMB for KOLs with 10-50k followers
  • 500RMB for KOLs with <10k followers

Based on this data, Perfect Diary spent at least RMB 80k on this Xiaohongshu’s KOL promotion.

Note: you can easily check the cost of a KOL in this Xiaohongshu KOL platform: https://influencer.xiaohongshu.com/.

All of the promotional content on Xiaohongshu are supposedly purchased via the platform. If a campaign has not been recorded through this interface, Xiaohingshu will reduce the traffic directed toward it.

Content distribution algorithm

Xiaohongshu’s content distribution algorithm is set up so that users can see content from accounts they don’t follow on the news feed. A post with high engagement could become viral on Xiaohongshu. Vice versa, content from the top KOLs might underperform due to the algorithm. Thus it’s essential to invite KOLs from all tiers to be more efficient.

For example, the 2nd most popular note was posted by a KOL with only 200 followers. But the next post posted by this KOL only got 2 likes.

Comparatively, this influencer has over 110k followers, but the note only got 173 likes.

Promotional content and incentivized sharing

Unlike WeChat that prohibits incentivized sharing, Xiaohongshu celebrates promotional content.

In almost all the posts, Perfect Diary asks users to like, comment, bookmark, and post pictures to participate in a lucky draw. Brands should definitely leverage this freedom to engage with users.

Xiaohongshu’s content is also a lot more promotional compared to WeChat. For example, Perfect Diary has a WeChat account with lots of makeup tutorials for beginners. On Xiaohongshu, the tutorials are a lot simpler. Most of the content is a picture display of how to apply the product. And sometimes a simple product display can also get over 57k likes.

Product strategy

A Xiaohongshu store usually has fewer SKUs. As Xiaohongshu takes a higher commission on the product (around 20% for some categories), most brands only list the top-selling products on Xiaohongshu. And drive the majority of the traffic to Tmall.

Perfect Diary only has 21 SKUs on Xiaohongshu. While on Tmall, it has 91 SKUs.

Key Take aways

Here are a few take-aways to keep in mind:

  • Arrange a “pyramid-shaped” strategy for your Xiaohongshu influencers: a lot of small influencers and a few large ones
  • Leverage incentivized sharing: Xiaohongshu encourages user engagement. Make the most of it by running lucky draws asking users to comment/like/post
  • Keep number of SKU’s small: Xiaohongshu is a promotional platform, not a sales platform. Use it to create user awareness, and let them buy from Tmall or WeChat where platforms charge a smaller commission

Contact us to sell to China via Xiaohongshu: https://walkthechat.com/xiaohongshu-little-red-book-marketing/

Want a first consultation about Social Marketing in China? Contact us.