Last Updated on December 20, 2024 
Jeffrey Hau
It’s no secret that E-commerce on Chinese platforms like Douyin and Taobao is thriving, capturing global brands’ attention. However, selling on XiaoHongShu is a whole new game!
Unlike other platforms, XiaoHongShu does not like flashy promotions or direct advertising. Instead, it focuses on authentic, user-generated content.
Products gain visibility through genuine reviews and personal recommendations from the platform’s users, guaranteeing trust and organic engagement.
Still confused? Keep reading for everything you need to know about e-commerce on XiaoHongShu!
Why is Selling on XiaoHongShu Different from Selling on Other Platforms?
Let’s dive into the main aspect that makes e-commerce on XiaoHongShu special – user behavior. Unlike other platforms such as Taobao where people might just scroll through ads and purchase directly, XiaoHongShu users are actively doing research before their purchases.
They are relying on product recommendations and reviews from their peers, to make the best choice. XiaoHongShu users’ shopping experience can be visualized as a funnel with three parts:
- The top funnel, where users acknowledge products from recommendations and spark interest in the products.
- The middle funnel is where users search for in-depth reviews to solidify their purchase decisions.
- The bottom funnel is where users make their decisions and place their orders through the XiaoHongShu shop.
Every transaction on XiaoHongShu is the end product of this funnel, showing the importance for brands to target all users throughout the funnel!
For example, the most well-known strategy for this is the KFS strategy, which is a combination of content creation, boosting the content’s visibility on users’ feed page, and also optimizing its performance in the platform’s search results through keywords.
What is a XiaoHongShu/Little Red Book E-Commerce Shop?
Apart from the usual features found on any social media platform, the XiaoHongShu Shop is the key function that has repositioned the platform as a ‘social commerce’ space. It’s the only channel that brands can sell their goods or services on XiaoHongShu – as redirecting users to an external website for purchases could result in their accounts getting banned.
The majority of shoppers on XiaoHongShu are the platform’s core demographics – young, high-income Chinese females living in urban areas. This makes the XiaoHongShu Shop a hotspot for feminine brands, particularly fashion and beauty brands.
Different Types of Stores on XiaoHongShu You Should Know
Personal Stores
Personal stores are the easiest to set up on XiaoHongShu, perfect for those without a company starting out on the platform. However, the categories allowed to sell in this type of store are limited. For example, these stores cannot sell electronics, furniture, jewelry, and maternal products.
Individual Industrial and Commercial Stores
These stores are perfect for small businesses looking to sell on the XiaoHongShu because there are more product categories allowed to be sold and also less documents required compared to enterprise and company stores. These stores cannot sell healthcare products and health supplements. Do keep in mind that this type of store is also only limited to local Chinese businesses!
Enterprise/Company Stores
These stores are the highest level of stores in XiaoHongShu, usually operated by big brands and companies. These stores are allowed to sell all product categories, as long as they submit all the required documents. Enterprise and company stores can be categorized into:
- Enterprise Stores: These stores are operated by companies instead of individuals.
- Exclusive Stores: These stores are operated by third-party companies but are authorized by a certain brand to sell products said brand only.
- Flagship Stores: These stores are directly managed and operated by the brand itself, which only sells its own products.
- Marketplace Stores: These stores get authorizations from different brands, which gather and sell products from all of them.
Why Set Up a Store on XiaoHongShu?
With leading companies such as Alibaba and JD, the Chinese e-commerce industry is arguably one of the most powerful ones globally. In 2023, the market was valued at approximately 1.43 trillion USD (which is $1,430,000,000,000, if you’re wondering)!
The fashion industry dominates the Chinese e-commerce space, with a market share of 35.1%, which is then followed by electronics (26.4%), personal care (11.2%), groceries (9.2%), homeware (6.8%), leisure (6.5%), and DIY products (4.8%).
Although XiaoHongShu’s e-commerce market share is relatively small in the industry, it is still not to be missed by brands. XiaoHongShu achieved $3.7 billion in its e-commerce in 2023; not to mention the opportunity it provides for brands to connect with a large group of high-value potential customers!
What Do You Need Before Setting Up Your Store?
First things first, the basic requirements for setting up a XiaoHongShu store are:
- The store owner must be of or over 18 years old.
- The XiaoHongShu account used for the store must achieve at least 1000 followers.
- The account must be verified as a professional account to be able to sell on XiaoHongShu.
- If you are a business or brand looking to set up a XiaoHongShu store, you will need to submit relevant documents such as your business license, tax registration certificate, and your business’s organization code certificate.
- If you are operating a personal store, you will need to submit your identity card, alongside a photo of you holding your identity card to XiaoHongShu for verification purposes. However, keep in mind that personal stores are only eligible for local Chinese citizens.
Keep in mind that if your brand is selling specific products such as health and medical-related products, XiaoHongShu has strict guidelines on these categories.
You will need to submit additional documents proving your products’ quality, such as a production permit and a product test report issued by local Chinese authorities.
How Much Does It Cost to Open Up a XiaoHongShu Store?
The total cost of setting up a XiaoHongShu shop ranges from 1,000 RMB to over 20,000 RMB, depending on various factors.
For personal stores and individual industrial & commercial stores, store owners must pay a deposit of 1,000 RMB. For enterprise and company stores, the deposit ranges from 20,000 RMB to 50,000 RMB, according to the type of store-operated.
In terms of ongoing costs, if your store’s monthly revenue is under 10,000 RMB, you are exempt from paying commissions. However, if your store earns over 10,000 RMB per month, XiaoHongShu will collect a commission of 5% to 8% on each transaction (known as the platform service fee).
For enterprise stores, XiaoHongShu charges an additional 600 RMB as a verification service fee to confirm the brand’s account as a professional account. Personal stores are exempt from this verification fee.
For certain individual industrial and commercial stores, XiaoHongShu may also charge an annual auditing fee of 600 RMB to review your account.
Transactions on XiaoHongShu Shop also involve payment processors such as WeChat Pay and Alipay, as XiaoHongShu does not have its own payment gateway yet.
These payment processors usually collect a service fee of 0.7% on each transaction – which is important to keep in mind.
Certain industries will also need to pay a higher deposit. For example, enterprise stores selling certain healthcare or self-care products need to pay up to 50,000 RMB compared to the usual 20,000 RMB. If the store is dealing with specific medication products, the deposit can even go up to 200,000 RMB!
For overseas brands looking to sell on XiaoHongShu, all fees are collected in USD. The deposit for enterprise stores by overseas brands ranges from 3,500 USD to 8,000 USD, depending on the industry and product categories being sold. XiaoHongShu supports various payment methods such as Alipay, WeChat Pay, and credit cards.
How to Set Up a XiaoHongShu Enterprise Shop (For Overseas Brands)
Step 1: Log Into Your Existing Account on XiaoHongShu’s Website
- Log in to the XiaoHongShu official merchant registration page.
- Sign into your existing XiaoHongShu account with your phone number or scan the QR code through your XiaoHongShu app.
- Click ‘Sign Up Now’（立即入驻）
- You will be directed to a page with shop-type options.
Step 2: Select Your Shop Type
- Select ‘Enterprise/Company’, then click ‘Register Now’.（立即入驻）
- You will be directed to the business details page.
Step 3: Fill in the Business Details & Submit Required Documents
- Under ‘Business Entity Type’, Select ‘Overseas Entity’.
- Under ‘Currency’, Select the currency you want to use for your XiaoHongShu shop.
- Upload your company registration certificate.
- Fill in your company’s details (company name, address, and company registration certificate validity period)
- Upload the required documents by Chinese authorities (Domestic entrusted enterprise business license, Commitment letter of the domestic entrusted enterprise & Customs certificate)
- Upload the personal documents of the owner of the XiaoHongShu Shop. (Passport coverage)
- Fill in the personal details of the owner of the XiaoHongShu Shop (Full name, Passport Number & Period of Passport Validity)
- Click ‘Next Step’
- You will be directed to the Shop details page.
Step 4: Fill in the Shop Details For Your XiaoHongShu Shop
- Select your type of store (Enterprise/Exclusive/Flagship/Marketplace Store)
- Select the category of products your shop will be selling.
- Enter your shop name and upload your shop’s logo.
- Click ‘Next Step’.
- If your existing XiaoHongShu account is a professional account, you will be directed to the platform verification page.
- If your existing account is not a professional account, you will be directed to the payment page to pay the verification fees (600 RMB).
Step 5: Wait for the Platform’s Verification
- In this step, all you have to do is wait for XiaoHongShu to verify your details and documents!
- This verification process will take 3 to 5 business days.
- Once your verification is approved, you will receive a notification via text.
- Your shop is ready to launch!
Great Examples of Successful XiaoHongShu Shops
Swisse - An Australian Health Supplement Company
A successful foreign brand on XiaoHongShu Shop worth mentioning is Swisse, an Australian health supplement brand.
Swisse has built a loyal follower base on the platform by consistently posting content that highlights its products, such as sharing real-life use cases and the results of using its supplements.
Besides, Swisse’s XiaoHongShu account often hosts livestreams to interact with users, such as answering users’ queries. This allows Swisse to spark interest and build relationships with its potential customers.
Today, XiaoHongShu users have bought over 70,100,000 products from Swisse’s shop. During the 618 (18th of June) Shopping Festival, the brand’s gross-merchandise value (GMV) was even ranked first in XiaoHongShu’s healthcare category; making it one of the most successful brands on the platform!
Ubras - A Local Chinese Innerwear Brand
Another example of a successful XiaoHongShu Shop is Ubras. Ubras is a local Chinese innerwear and loungewear brand. As the majority of XiaoHongShu users are females, Ubras’s products perfectly align with the needs of this huge user group.
Additionally, Ubras focuses on influencer marketing and user-generated content (UGC) to promote its products on XiaoHongShu. By partnering with influencers such as KOLs and KOCs, these influencers amplified the brand’s message, boosting Ubras’s brand awareness.
As a result, Ubras’s XiaoHongShu shop has sold over 72,600,000 products today. In 2023, the brand even raked in four billion RMB of revenue during online shopping festivals!
How to Market Your XiaoHongShu Shop?
After setting up your XiaoHongShu shop, it’s time to attract more users with proven strategies. One of the most effective methods is seeding (种草).
Seeding involves planting your product’s information in users’ minds, sparking their interest. On XiaoHongShu, you can do this by creating engaging posts, known as ‘notes’ that showcase your products. You can also encourage your customers to share their experiences with your products on their own accounts.
This aligns with XiaoHongShu’s focus on user-generated content (UGC), creating effective word-of-mouth marketing and getting more people to notice your shop.
When users find these notes appealing, they can easily explore your XiaoHongShu shop, completing the loop from interest to purchase!
Here’s a small tip: Video-based notes are becoming a favorite among XiaoHongShu users. Tap into this trend by creating engaging content like product tutorial videos! These can showcase your products in action but also resonate with the platform’s growing demand for video content.
We also recommend you try out XiaoHongShu’s livestreaming feature to get your shop noticed by more users. Many businesses are using livestreams not just to promote their products, but also to build personal connections with XiaoHongShu’s audience.
It’s a great way to showcase your products in real-time while creating a sense of trust and authenticity. In fact, live streaming has massive potential—there are success stories of single live streams generating millions in sales!
Another great way to get the word out is by teaming up with influencers on XiaoHongShu. KOLs (Key Opinion Leaders) and KOCs (Key Opinion Consumers) already have loyal followers who trust their opinions.
By partnering with them, you can introduce your products to a wider audience quickly, bringing more traffic to your XiaoHongShu shop!
What Else Do You Need to Know?
Once you are ready to sell on XiaoHongShu, do take note that there are certain rules and regulations on the platform to follow when running your shop!
Firstly, false advertising on XiaoHongShu is a big no-no. Do avoid using words such as ‘Number 1’, ‘Best’, or ‘Limited’ in your promotional content, as these are high-risk keywords for false advertising under XiaoHongShu’s algorithm!
The platform also emphasises the quality and authenticity of products sold in each XiaoHongShu shop to protect its users’ rights.
XiaoHongShu conducts certain tests to ensure product quality. These tests may include anonymously purchasing items from shops or directly inspecting products stored in warehouses.
If your shop fails to meet the platform’s standards, it may be flagged for heavy inspection.
Failure to make the necessary corrections could lead to serious consequences, including the potential closure of your shop.
Apart from the platform’s inspections, it’s also important to keep an eye on your buyer ratings. On XiaoHongShu, users can rate your shop based on their shopping experiences, and these ratings are displayed right on your shop’s profile for everyone to see.
The ratings cover five key areas: product quality, delivery experience, after-sales service, communication, and how well you handle complaints.
Besides building trust among potential customers, your shop’s ratings will also affect its ranking in the search results! XiaoHongShu requires all shops to maintain a rating of at least 3 out of 5.
However, to achieve the best visibility and performance in search results, we highly recommend aiming for a rating between 4 and 5!
It’s also important to ensure that your shop complies with all government laws and regulations. XiaoHongShu strictly prohibits the sale of items like drugs, weapons, counterfeit products, and other illegal goods.
Breaking any of the guidelines could seriously impact your shop—your visibility might drop, your shop could be frozen, or worse, it could get shut down and banned.
While you can appeal to XiaoHongShu if this happens, it’s best to stay safe to avoid any unwanted chaos!
Why Not Let PRIZM Help You Out?
E-commerce on XiaoHongShu can feel overwhelming, especially for brands new to the platform. With its unique processes, strict regulations, and an interface entirely in Chinese, navigating the platform can be a real challenge for foreign brands.
But don’t worry—PRIZM has got your back! We’ve worked with global brands like Dior and Toyota to master their e-commerce strategies.
Plus, with our Guangzhou team’s deep expertise in XiaoHongShu, we’ll guide you every step of the way. Let us help you unlock the incredible potential of the Chinese market—completely hassle-free!
Ready to kickstart your own shop on XiaoHongShu? Contact us now!
