China’s app Xiaohongshu taps niche rich female Gen Zers

23 May 2024

Teresa Cheung fired up her Xiaohongshu app, turned on her camera and dazzled her nearly 1.8 million online followers over a seven-hour livestream.

One moment, she was demonstrating a palette of eyeshadow: “This color is called ‘Love Letter’,” she said in Mandarin, touting a dark berry-colored shade. The next, she was reciting an excerpt from the poem A Valediction: of the Book by John Donne in perfect English:

“Study our manuscripts, those myriads
Of letters, which have past ‘twixt thee and me,
Thence write our annals, and in them will be,
To all whom love’s subliming fire invades,
Rule and example found.”

By the end, the 60-year-old actress from Hong Kong had promoted dozens of beauty products, read some Shakespeare verses and become the first on the platform to top 100 million yuan ($13.8 million) in sales in a single session.

Xiaohongshu Technology Co. — part Instagram, part Pinterest — has boomed in recent years as a combination of top influencers like Cheung, its artificial intelligence technology and soft marketing tactics make it a lifestyle bible for many of China’s high-income earners. It also created a $6 billion fortune for its co-founders, Charlwin Mao Wenchao and Miranda Qu Fang, according to the Bloomberg Billionaires Index.

“Xiaohongshu is a powerful tool for brands wanting to enter the Chinese market or attracting Asian customers in the United States,” said Frost Li, founder of Loup.ai, an e-commerce solution provider that helps online retailers use AI to engage with customers. “They really double down on the view time and click-through rate.”

Founded in 2013, the company, whose name translates to “little red book,” has defied the government’s crackdown on the tech industry. After venturing into the realm of live shopping, it hit $500 million in profit last year, beating peers including Weibo, the Chinese equivalent of X that has almost twice as many users.