Little Red Book Marketing Must-Know: Platform Bans Excessive Displays of Wealth

In April, Chinese social media platform Little Red Book (Xiaohongshu) announced a new rule banning users from publishing posts flaunting wealth. While other platforms have been cracking down on content creators who regularly promote lavish lifestyles, Xiaohongshu is the first social media platform in China to officially and publicly ban this type of content. For luxury and premium brands marketing on Little Red Book, it’s important to be aware of this change.

Why Did Little Red Book Make this Decision?

Little Red Book’s community manager He Tong explained that this is not a banning on luxury. He feels that if a user shares tips for getting the best price on a luxury bag or how to pick a luxury bag, that’s helpful and beneficial for the Little Red Book community. But if the user only presents bags that s/he has bought, that’s meaningless and provides no value.

What is the Ultimate Reason for Little Red Book’s New Regulations?  

Besides wanting to control the quality of the content on the platform, Little Red Book is also aware of the negative effects that it has on society when users open social media platforms and constantly see lavish displays of wealth. It’s similar to the current ‘appearance anxiety’ issue that is plaguing many young people in China who are constantly bombarded with images of beautiful people on social media.

Not everyone is as rich as those wealthy users and people feel pressured to keep up with others and go into debt trying to buy luxury goods they can’t afford. What’s more, many of the posts are fake, yet consumers aren’t aware of it.

Last year the “Shanghai debutante” WeChat groups caused a huge buzz on social media. It was revealed that there are people who fake their life or try to present themselves as being super rich when they in fact are not at all. These staged posts are all over Little Red Book and are misleading for its users.

Another rule that was already in place, but the platform is emphasizing, is that KOLs need to make it clear when a post is sponsored. This adds transparency to the content and context to the situation. For example, if the post is sponsored, users know that the luxury bag may have been gifted or loaned to the KOL by the brand, instead of thinking that other people can afford to buy so many luxury products.

But will marking the post as sponsored affect the marketing value of the post? Whether users will still buy the product if they know the post is sponsored remains uncertain.

But Little Red Book is a Favorite Platform for Luxury Brands

Little Red Book was founded in 2013. Since then, it has been known as a lifestyle sharing platform, especially for fashion. With users’ excessive passion to share their luxury life and the great popularity of those posts, luxury brands started using Little Red Book for marketing.

Louis Vuitton became the first major luxury brand to launch an official brand page on the platform in 2019. The brand also held its first ever live stream on Little Red Book. Currently, the account has 230k followers and 494 posts.

Following Louis Vuitton, Little Red Book attracted nearly 30k brands (both luxury and non-luxury) to open their official accounts on the platform. This includes many major brands such as L’Oréal, Unilever, Estée Lauder, Dior, Givenchy and Chanel. Besides running their own accounts, all of these brands frequently work with influencers on the platform.

What Do These Regulations Mean for Little Red Book Marketing?

Well, in some ways, these regulations could be good for luxury brands marketing on Little Red Book. By restricting those ostentatious displays of wealth, it will increase the exposure for content from brands’ official accounts.

It also shows Little Red Book’s strong determination to create a healthy and high-quality content community. In fact, this is not the first time Little Red Book has restricted something that would affect its own traffic. Back in 2019, Little Red Book upgraded the threshold for KOLs to work with brands. A KOL must have 5,000 followers and an average post exposure of at least 10k in order to collaborate with brands. This rule hurt the advertisement income for many micro influencers on Xiahongshu and made them upset. But the regulation also filtered almost 70% of unqualified KOLs.

According to Qu Fang (瞿芳), co-founder of Xiaohongshu, 70% of the platform’s content is UGC. She believes that high-quality content is the base for monetization.

Competition from Other Social Media Platforms

Superficially, it may seem that Little Red Book is cutting its fashion-related content, and negatively affecting fashion marketing on the platform. But in fact, it is improving fashion content. One of the motivation behind this comes from other social media platforms’ ambition to enter the fashion industry. 

As we mentioned in our previous post, top video platform Douyin has its sights set on the fashion industry. In early April, Douyin launched a new function: Douyin flagship store. At the moment, there are over 220 brands running a Douyin flagship store. While brands across many categories are able to launch stores, it appears that Douyin is most eager to get fashion brands on board.

Bilibili is targeting fashion as well. Back in 2020, it actively attracted fashion KOLs to open accounts on the platform with 5 billion traffic as support. In June 2020, it successfully had Dior opening an account and publishing its 2020 autumn collection.

Our Tips for Brands

At the moment, there is no need for brands to panic. Because Little Red Book’s aim is to provide a healthy and high-quality content community for its users.

For brands that want to seek KOLs to collaborate with on the platform, one thing they can do is to check whether the KOL has posted violated content before, such as those lavish lifestyle. It is likely that Little Red Book will send less traffic to such KOLs in the future. But then it is also highly likely that the KOL would delete such content. So it might take extra time to figure his/her history out.

If a brand wants to post content on its official Little Red Book account, it just needs to follow the truth and don’t be exaggerated.

What do you think? What are your thoughts on Little Red Book’s new regulations?

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