Assessment and Optimization of Social Media Marketing Strategies:

A Case Study of Xiaohongshu

Yiyang Zhao

Industrial Engineering, Nanjing University of Finance and Economics, Nanjing, Jiangsu, 210046, China

Keywords: Xiaohongshu, Social e-Commerce, User-Generated Content, KOL Collaborations, Marketing Strategies.

Abstract: This paper investigates the marketing strategies adopted by Xiaohongshu, a popular Chinese social e-

commerce platform, focusing on user targeting, content creation, and collaboration with key opinion leaders

(KOLs). The study explores that the platform's user base consists primarily of young female consumers

interested in fashion, beauty, and lifestyle. It examines the effectiveness of strategies such as user-generated

content (UGC) marketing and KOL collaborations in enhancing brand exposure and driving sales. Research

methods include case analysis, literature review, and qualitative analysis. By deeply examining Xiaohongshu's

marketing strategy cases to understand its performance and impact in the market, reviewing relevant literature

to support and enrich research arguments, and conducting meticulous analysis of cases and literature, the

study delves into the implementation, effects, and significance of Xiaohongshu's marketing strategies. The

research findings show that Xiaohongshu's personalized recommendation algorithm significantly improves

user experience and purchase conversion rates. However, the platform faces challenges such as over-reliance

on advertising revenue and the need for diversified profit strategies. Research conclusions include

recommendations to reduce dependence on advertising, establish realistic revenue targets, and strengthen data

analysis and risk management to ensure sustainable growth in the competitive field of social e-commerce.

1 INTRODUCTION

Social e-commerce, as an emerging model in the e-

commerce field, is gaining prominence in the market

with its unique advantages and characteristics. In this

realm, Xiaohongshu, as one of China's influential

social e-commerce platforms, has attracted

considerable attention and engagement from users

with its distinctive content sharing and shopping

experience. However, with intensified competition

and market changes, effectively formulating

marketing strategies and enhancing user experience

have become significant challenges for Xiaohongshu

and other social e-commerce platforms.

Xiaohongshu is a popular social e-commerce

application in China, dedicated to connecting users,

content creators, and products. The app aims to

provide users with a platform to share life experiences

and purchasing insights, covering various domains

such as beauty, fashion, lifestyle, and travel. Users

can share their shopping experiences, product

https://orcid.org/0009-0008-3858-9902

reviews, life tips, and engage in interactions with

other users on Xiaohongshu.

Currently, Xiaohongshu has some areas that need

improvement, manifested in several gaps. Firstly, the

user profile lacks diversity, primarily concentrated on

young females, lacking broad coverage of other

demographic groups, resulting in a relatively

homogeneous user profile. Secondly, there is

insufficient purchasing conversion capability.

Although users gain shopping inspiration on the

platform, they often complete purchases on other e-

commerce platforms, leading to a low purchase

conversion rate for Xiaohongshu. Thirdly, there is

room for improvement in content promotion and

social interaction. Despite having certain advantages

in content creation and sharing, Xiaohongshu still has

room for improvement to increase user stickiness and

enhance platform activity.

This paper aims to delve into the marketing

strategies of the Xiaohongshu platform and analyze

and evaluate their impact. Firstly, the paper will focus

on introducing the user positioning and profiles of the

Zhao, Y.

Assessment and Optimization of Social Media Marketing Strategies: A Case Study of Xiaohongshu.

DOI: 10.5220/0012968300004508

Paper published under CC license (CC BY-NC-ND 4.0)

In Proceedings of the 1st International Conference on Engineering Management, Information Technology and Intelligence (EMITI 2024), pages 679-684

ISBN: 978-989-758-713-9

679

Xiaohongshu platform, as well as its content creation

and publishing strategies, including user-generated

content (UGC) marketing strategies, KOL

collaboration strategies, target positioning strategies,

and word-of-mouth marketing strategies. Secondly,

through studying the impact of marketing strategies,

this paper will explore the effects of these strategies

on user engagement, loyalty, and brand awareness,

thereby revealing the strengths and challenges of the

marketing strategies of the Xiaohongshu platform.

The research methods mainly include literature

review and case analysis. By collecting and

organizing relevant literature data and actual case

data of the Xiaohongshu platform, the application and

effects of different marketing strategies on the

platform will be analyzed, thus providing suggestions

and optimization directions for the marketing

strategies of the Xiaohongshu platform.

The goal of this paper is to provide references for

social e-commerce platforms, promote the

development of the social e-commerce field, and

stimulate the innovation and optimization of

marketing strategies. By strengthening the

understanding of user behavior and market trends,

this paper aims to provide more accurate marketing

decision-making basis for enterprises, promote

academic research, and disseminate knowledge.

2 MARKETING STRATEGIES

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2.1 User Positioning and Profiles

Xiaohongshu's user positioning and profiles primarily

target young female demographics, especially those

under 30 years old. These users typically have

interests in fashion, beauty, lifestyle, among other

content categories, and enjoy sharing their shopping

experiences, life anecdotes, and beauty tips on the

platform. They seek inspiration, social connections,

and new brands/products on Xiaohongshu.

Additionally, Xiaohongshu users tend to pursue

personalized and quality lifestyles, emphasizing

emotional resonance with brands and community

identity.

According to QianGua Data's "Xiaohongshu User

Active Profile Trend Report," Xiaohongshu currently

boasts over 200 million monthly active users, with

post-90s users accounting for 72% of the total user

base, and users from first- and second-tier cities

comprising 50% of the total (QianGua Data, 2022).

Generation Z users, born between 1995 and 2009, a

group heavily influenced by the internet, occupy a

significant portion of Xiaohongshu's user base (Gao,

2020). One reason Xiaohongshu targets young female

users is due to their significant purchasing power and

influence in the social e-commerce domain, making

their activity and user experience crucial for

Xiaohongshu's development.

2.2 Content Creation and Publishing

Strategies

2.2.1 User-Generated Content (UGC)

Marketing Strategy

UGC refers to content created by ordinary users

rather than brands or professional creators, including

photos, videos, comments, posts, etc. (You, 2024).

Xiaohongshu encourages users to share content

related to life, beauty, fashion, food, and more,

showcasing real-life experiences and consumption

insights through UGC. This content attracts attention

from other users, fostering community engagement

and growth. For example, Xiaohongshu initiated a

theme challenge called "My Wonderful Life

Moments," encouraging users to share delightful

moments from their lives. Users participate by

uploading photos, videos, or written descriptions,

tagging relevant products or brands. Such activities

not only inspire users to share moments from their

lives but also strengthen emotional connections

between users, the platform, and brands. UGC

empowers ordinary users with more voice and

participation opportunities, making them not just

consumers but also creators and sharers of content,

thereby enhancing user engagement and loyalty.

2.2.2 KOL Collaboration Strategy

KOLs (Key Opinion Leaders) are individuals or

accounts with influence and expertise in specific

fields or on social media platforms. They typically

have a large following and their opinions and

EMITI 2024 - International Conference on Engineering Management, Information Technology and Intelligence

680

recommendations carry significant weight among

their followers (Li, 2023).

Xiaohongshu employs KOL collaboration

strategies to promote brands and products. It

collaborates with influential KOLs in beauty, fashion,

lifestyle, and other fields, allowing them to publish

content and recommend products on the platform.

These KOLs often share their shopping experiences,

product reviews, and usage tips, attracting

considerable attention from their followers. Through

collaborations with KOLs, Xiaohongshu leverages

their influence and fan base to rapidly increase brand

exposure and awareness while attracting more users

to the platform and purchasing promoted products.

2.2.3 Target Positioning Strategy

Target positioning strategy involves segmenting the

market into groups with similar needs and

characteristics. It also involves selecting one or more

of these groups as target markets to meet their needs

and expectations. This enhances marketing

effectiveness and sales conversion rates.

Xiaohongshu achieves personalized

recommendations through user behavior data and

algorithms, providing users with content and products

that best match their interests and needs. The

platform's target users mainly fall within the 25-35

age range, actively sharing content across various life

domains on the platform. By analyzing users'

browsing history, likes, and saves, Xiaohongshu

understands their preferences and recommends

relevant content and products. This personalized

recommendation approach enhances user

engagement and purchase conversion rates, making it

easier for users to find content and products of interest,

thereby enhancing user experience and platform

attractiveness.

2.2.4 Word-of-Mouth Marketing Strategy

Word-of-mouth marketing is a strategy that promotes

products or services through user recommendations

rather than brand-led advertising (Zhu, 2023).

Xiaohongshu fosters word-of-mouth marketing

by establishing rich interest communities,

encouraging user interaction and communication,

thereby promoting community formation and word-

of-mouth spread. Users share their shopping

experiences, product reviews, and usage tips on

Xiaohongshu, while other users interact and provide

feedback through likes, comments, shares, etc. This

word-of-mouth dissemination helps enhance users'

trust in products and brands, increase the reference

value of purchase decisions, and bring more exposure

and awareness to brands. Through word-of-mouth

marketing, Xiaohongshu leverages users' real

experiences and recommendations to enhance

product reputation and brand reputation, thereby

promoting sales and user growth.

3 THE IMPACT OF MARKETING

STRATEGIES

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3.1 Driving Forces of Marketing

Strategies

By collaborating with KOLs and leveraging user-

generated content, brands can gain more exposure

and awareness on the Xiaohongshu platform. KOLs

typically possess a large following and influence, and

their recommendations and shares can help brands

rapidly increase their visibility among target

audiences. Additionally, user-generated content is

often more authentic and relatable, making it easier to

resonate with other users and deepen their awareness

and affinity towards the brand. Such brand strategies

result in increased brand exposure and enhanced

customer awareness.

Features such as community interaction and

personalized recommendations greatly enhance user

engagement and experience on the Xiaohongshu

platform. Users can share insights, exchange

experiences, and discuss topics with other users,

thereby fostering tighter community relationships.

Moreover, personalized recommendations make it

easier for users to find content and products that

match their interests and needs, increasing their time

spent and frequency of use on the platform. This

positive user engagement and experience contribute

to higher user loyalty, making them more inclined to

choose Xiaohongshu as their preferred shopping and

social platform.

Advanced algorithms and data analysis

technologies enable Xiaohongshu to achieve precise

target user positioning and personalized

Assessment and Optimization of Social Media Marketing Strategies: A Case Study of Xiaohongshu

681

recommendations. By analyzing users' browsing

history, likes, saves, and other behaviors,

Xiaohongshu can understand their interests and

preferences, thereby recommending content and

products that best suit their tastes. This personalized

recommendation not only enhances user experience

but also improves marketing effectiveness and

purchase conversion rates. Users are more likely to

discover and purchase products they are interested in,

thereby generating more sales and revenue for brands.

3.2 Marketing Dilemmas and

Challenges

Xiaohongshu's marketing strategies may rely on

external factors such as the influence of KOLs and the

quality of user-generated content, making them

highly susceptible to external environmental

influences. If KOLs lose their influence or if the

quality of user-generated content is poor, brands may

suffer negative consequences, leading to ineffective

marketing results or damage to brand image.

Xiaohongshu also faces the issue of advertising

saturation. If brands and merchants excessively

advertise, it may lead to user annoyance and

resentment, affecting user experience. Excessive

advertising may also cause users to develop ad fatigue,

reducing ad click-through rates and conversion rates,

thereby diminishing the effectiveness of brand

marketing.

Although Xiaohongshu provides some data

analysis and monitoring tools, some marketing effects

may be difficult to directly measure and evaluate. For

example, assessing the effectiveness of word-of-

mouth marketing may be influenced by various

factors, making it difficult to separately measure its

impact on brand awareness and sales conversion. This

makes it challenging for brands to determine which

marketing strategies are most effective and how to

optimize and adjust them.

4 RECOMMENDATIONS AND

OPTIMIZATION

4.1 Profitability and Current Situation

In 2022, Xiaohongshu's revenue was $2 billion, with

a loss of $200 million (Olcott, McMorrow, 2023). In

2023, Xiaohongshu achieved a revenue of $3.7 billion

and a net profit of $500 million, marking its first

profitable year. This significant improvement in

profitability can be attributed to the revenue

generated from advertising and e-commerce

businesses. Additionally, Xiaohongshu witnessed

robust user growth, with monthly active users

reaching 312 million, representing a 20% year-on-

year increase.

Moreover, Xiaohongshu positions itself as the

"preferred lifestyle decision-making search platform"

with 70% of monthly active users engaging in search

behavior by the end of 2023. Among all search

behaviors, 88% are proactive searches, giving

Xiaohongshu a competitive advantage compared to

other social media platforms (Xiaohongshu, 2023).

However, Xiaohongshu faces challenges such as

a lack of diverse user profiles and its inability to

facilitate purchase behavior directly on the platform.

Female users dominate Xiaohongshu, comprising

70% of the user base, with 50% being under the age

of 30(Olcott, McMorrow, 2023). Many users use

Xiaohongshu for product discovery and research but

complete purchases on other platforms.

4.2 Profitability Analysis and

Identified Issues

While Xiaohongshu achieved profitability in 2023,

there are still challenges to address. The platform's

heavy reliance on female and young users may limit

its market penetration and commercial development

among a broader user base. Additionally,

Xiaohongshu's lack of capability to facilitate

purchase behavior results in low purchase conversion

rates, affecting its e-commerce profitability. In

response to competition pressure, especially from

rising platforms like TikTok, Xiaohongshu needs to

continuously enhance its own features and

attractiveness, as well as strengthen brand marketing,

to maintain market share (Li, Li, 2023).

4.3 Practical Recommendations

4.3.1 Reduce Dependence on Advertising

Revenue

To reduce reliance on advertising revenue,

Xiaohongshu can diversify its revenue streams by

expanding e-commerce platform revenue, optimizing

membership services, and developing premium

content. Furthermore, on Xiaohongshu's platform,

advertising content is often labeled as

"advertisement" to distinguish it from user-generated

content. However, this labeling method may affect

users' purchase decisions, as users may have more

skeptical attitudes towards content labeled as

advertisements (Lin, Chen, Xuan, & Cheng, 2022).

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The platform can optimize the labeling of advertising

content to mitigate user skepticism and improve

acceptance:

Explore differentiated labeling methods beyond

simple "advertisement" tags, such as "brand

promotion" or "collaborative recommendation," to

reduce user resistance to advertising content.

Encourage brands to disclose their cooperation

with users openly and provide relevant background

information to enhance user trust and credibility.

Emphasize high-quality content creation to attract

user attention and participation, reducing user

rejection of advertising content.

Establish user participation and feedback

mechanisms to encourage user opinions and

suggestions on advertising content, facilitating

communication and interaction between users and

brands.

4.3.2 Optimize Xiaohongshu's Profit Model

Diversifying user profiles is crucial for

Xiaohongshu's success. By deepening user data

analysis, including interests, purchasing behavior,

and geographic characteristics, Xiaohongshu can

enrich user profiles (Chen, Zhang, & Zeng, 2022).

Introducing more user groups and interests will

enhance platform diversity, expand potential markets,

and increase user retention and engagement.

Enhancing purchase conversion capability is

essential for Xiaohongshu's business growth.

Strengthening cooperation with e-commerce

platforms to improve product availability and

convenience can increase user willingness to

purchase on the platform. Strategies like optimizing

recommendation algorithms, enhancing shopping

experiences, and strengthening brand partnerships

can improve purchase conversion rates, facilitating

the transition from traffic to sales.

Xiaohongshu can further innovate advertising

formats and e-commerce business models, providing

more attractive and innovative advertising formats

and shopping experiences to increase revenue sources

from advertising and e-commerce business (Xu,

2021). Introducing technologies such as AR makeup

trials and virtual clothing fittings can enhance user

engagement and purchasing decision efficiency.

5 CONCLUSION

The research findings indicate that Xiaohongshu's

adoption of UGC marketing strategies and KOL

collaboration effectively enhances user engagement

and loyalty. These strategies help brands gain more

exposure and recognition on the platform. However,

Xiaohongshu faces challenges such as advertising

saturation. The platform needs to adjust its marketing

strategies timely, avoid excessive reliance on

advertising revenue, seek diversified profit models,

and enhance user experience.

By thoroughly understanding Xiaohongshu's

marketing strategies, this study provides valuable

insights for social e-commerce platforms. The

research results can also guide brands and merchants

in their marketing activities on Xiaohongshu, helping

them utilize platform resources more effectively to

improve advertising effectiveness and purchase

conversion rates. By revealing the challenges and

adjustments in Xiaohongshu's marketing strategies,

this study serves as a warning for social e-commerce

platforms, guiding them to pay more attention to user

experience and platform healthy development, avoid

excessive reliance on advertising revenue, and

achieve sustainable development.

Based on the research content of this study, future

research can further explore the development trends

and prospects of Xiaohongshu's marketing strategies.

Firstly, more detailed analysis of Xiaohongshu's user

behavior data can be conducted to explore the impact

of user preferences and behavioral changes on

marketing strategies. Secondly, in-depth research can

be conducted on Xiaohongshu's advertising

placement strategies and effectiveness evaluation

methods, exploring how to optimize advertising

placement and improve advertising effectiveness.

Finally, combining the development trends of the

social e-commerce industry and market competition,

future directions and marketing strategies for

Xiaohongshu's platform can be forecasted and

predicted, providing more accurate and practical

marketing suggestions for brands and merchants.

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