Taobao has Taobao brands, Douyin has Douyin brands, can Xiaohongshu create a "Xiaohongshu brand"?

This article lists some cases of Xiaohongshu brands that have achieved an internal cycle from seeding to sales through seeding, conversion, and live streaming on Xiaohongshu. As Xiaohongshu live streaming and e-commerce mature, it is expected that more and more Xiaohongshu brands will emerge. This article is suitable for readers who are interested in the development of Xiaohongshu brands.

You must have heard of Taobao brands and Douyin brands, but you may not know the real Xiaohongshu brands yet.

In my definition, the so-called Hongshu brand is one that has grown entirely from the Xiaohongshu channel, with Xiaohongshu as the core sales channel and Douyin and Taobao as auxiliary channels.

Why talk about Xiaohongshu brands? Because the commercialization of each channel must be supported by a large number of leading brands, such as Feihe and Yuanqi Forest on Focus Media, Three Squirrels and Estee Lauder on Tmall, and Ubras and Five Ladies on Douyin.

To understand Hongshu brands, let’s first look at the adjacent Douyin brand data. According to CBNData data, as of May 2022, there are more than 400 brands in the Douyin brand pool, mainly domestic brands, with annual GMV concentrated between 30 million and 200 million yuan, and some of the TOP 50 brands exceed 200 million yuan.

The categories are mainly cosmetics, personal care products and food, including brands such as Ubras, Little Bear, Lian Coffee, etc. The soul-searching question is, does Xiaohongshu have "red brands"? There are brands that have completely emerged from Xiaohongshu.

Let me first talk about the objective situation of the platform. Compared with Douyin, Xiaohongshu's daily active user population and residence time are insufficient. Compared with Taobao, Xiaohongshu's shopping attributes are weak, and users discover and purchase products more through content.

Secondly, the maturity of Xiaohongshu's e-commerce is far lower than that of Douyin and Taobao, and the probability of users actively searching for products in Xiaohongshu Mall is also small. Only by continuously producing high-quality content can merchants obtain system recommended traffic and use notes to drive product sales.

At the same time, Xiaohongshu is essentially a content community e-commerce platform, and conversion is the last factor.

Figure 1: Our summary of Xiaohongshu platform positioning

Looking at the actual situation, among the top 50 brands currently on Dandelion, it was found that nearly half are white-label products. White-label products have no brand awareness. During the advertising process, they do not consider the tone but the interactive data, and mostly use direct posting, through various film and television accounts and comics accounts, to give the brand basic exposure.

Figure 2: Brands ranked 28-35 on Dandelion

Can this type of brand become a popular brand? I personally think it is difficult. First, this type of brand chooses influencers mainly from the bottom. For the platform, this type of reported influencers has low profits and small advertising volume. More importantly, this type of brand is willing to invest less effort and time in the brand, and is not willing to spend money on long-term brands.

As I understand it, if the Hongshu brand wants to become a brand that comes out of this platform, it must be willing to spend money on the platform and actually generate sales on the platform. Brands that follow the platform for a long time will pay more attention to long-term value.

On Xiaohongshu, are there any brands that have truly achieved an internal cycle from planting grass to sales? Let’s not talk about the big omni-channel brands for now. I think that brands such as IS, BN, and Huajie Food and Health, strictly speaking, belong to Xiaohongshu brands, from planting grass to conversion, and then to all in the Xiaohongshu platform.

Although they currently occupy a small share of the category, they have already occupied a core position in this category on Xiaohongshu as a whole.

1. Cleansing brand: IS

IS was founded in 2019. It is a personal care brand under Mika Life that focuses on vc whitening. The product was launched in June 2020. On October 11, 2021, it completed a tens of millions of Series A financing, which will mainly be used for R&D investment, multi-product line expansion, brand building, etc.

With the help of the official good product experience platform and user feedback, the product has been upgraded three times from "early stage milk cover shower gel", "mid-term milk cover pearl shower gel" and "pump-out pearl shower gel". Through the brand-platform-user word-of-mouth feedback mechanism, the three product upgrades have been completed, successfully creating the "pearl" product memory point and laying the foundation for in-depth brand recognition.

Figure 3: IS product upgrade diagram

After deciding on the style of pearl shower gel, use influencer recommendations + advertising, especially advertising, to create a hit article, and then look at the conversions on and off the site.

Figure 4: Xiaohongshu effect delivery model

Judging from the current sales, Xiaohongshu has become its core sales channel, with Douyin and Tmall serving more as auxiliary channels. The monthly sales of pearl shower gel on Xiaohongshu are over 80,000, and it is also continuing to use influencers and advertisements on Xiaohongshu.

Figure 5: IS is on Xiaohongshu and Douyin

2. Jewelry brand: BN Bailan

BN is a new niche brand that emerged in 2021. It mainly sells rings, earrings, and necklaces. Most of the materials are pearls and silver jewelry. The average customer spending is between 150-2,300 yuan. The main product price on Xiaohongshu is below 1,000 yuan. The model is the manager himself, and the brand tone is intellectual and elegant.

The cumulative sales volume on BN site has exceeded 50,000+ pieces, the top 1 single product in the store on the site has sold more than 20,000 pieces, and the sales volume of many products has exceeded 5,000 sets. It also purchases brand areas on Xiaohongshu. Looking at its off-site data, the best-selling single products have monthly sales of 6,000+.

The official report also confirmed that Xiaohongshu’s promotion has a positive correlation with its off-site content, and that Xiaohongshu is a channel that leverages the entire brand business.

Figure 6: Bai Lan’s Xiaohongshu homepage

3. Food brand: Huajie Food

He has a store on Taobao, and thought it was to attract traffic to Taobao. He actually sells goods on Xiaohongshu. He currently has 189,000 fans and over 907,000 likes and comments. He mainly sells some food and health products, such as liver-nourishing tea and some health-preserving tea, focusing on factors that women care about, such as whitening and beauty, nourishing the liver and improving eyesight, and removing dampness. According to the background, he has gained 29,000 fans in the past year.

Figure 7: Huajie Food and Health Backend Data

Looking at the Xiaohongshu store, the sales volume of the best-selling product, Ancient Recipe Eight Treasures Powder, exceeded 40,000. The lowest price of this product is 99 yuan, and the average customer price of the high-end version is 349. Such a high sales volume on Xiaohongshu further proves that the product quality is indeed very good.

Figure 8: Huajie Food Home Page and Store Data

Huajie Food and Health produces 2-3 notes on the platform every week, does live broadcasts on Hongshu, and finds registered influencers on the platform to do brand promotion, truly using Hongshu as a core channel.

The above are three brands that I have seen grow on Xiaohongshu. The real meaning is from planting seeds on Xiaohongshu to sales, and the core lies in the conversion on Xiaohongshu. With the maturity of Hongshu live streaming and e-commerce, more and more Xiaohongshu brands will emerge.

Author: Jianghe team

Source: WeChat public account "Jianghe Chat Marketing"