Founded in 2013, Xiaohongshu (also known as RED and Little Red Book) is a Chinese social commerce app used primarily by young consumers. With more than 300 million registered users, 70% of whom belong to Gen Z, RED is one of China’s fastest growing and most powerful shopping platforms.
RED reverses the common e-commerce pathway where overseas consumers buy from China by offering foreign brands to Chinese buyers. Like its rivals Pinduoduo, Weidian, and Xianyu, the app is increasing in popularity, but many Western brands still do not know what RED is or why they should be monitoring it for counterfeits.
Which brands are counterfeited on RED?
Although the platform has entered agreements with some high-profile brands, counterfeits are still rife, with sellers claiming to offer foreign brands imported from abroad but then supplying cheap imitations. RED is a particular threat for luxury fashion and beauty brands as it has a substantial user base of young Chinese women shopping for expensive branded goods.
What is social commerce?
RED started as a “lifestyle community” platform for users and influencers to review products and share tips, photos, and videos. Although it retains that social media element (users cannot sell goods to one another directly), in 2014, the app moved into social commerce and created its Mall, a separate area of the app where a mixture of official brand accounts and third party seller profiles sell directly to users.
This has led to RED being described as a mix between Instagram, Pinterest, and Amazon, with users logging in multiple times a day to speak with friends, research products, watch product-related content from influencers, get inspiration, and make purchases.
Social commerce has not yet taken hold in the West in the same way as it has in China, so it has become a blind spot for many businesses. For brands offered on these growing platforms though, monitoring for counterfeits is becoming very important.
How does RED work?
There are two distinct areas on RED, the social user side and the e-commerce platform known as RED Mall. Social users are not allowed to sell products directly, so all e-commerce transactions must take place through the stores listed in the Mall. Users can direct other users to stores in that area though. The Mall marketplace is a mixture of official brand partners including Tom Ford Beauty, Tiffany & Co., and Guerlain, 20,000 official brand shops, and a further 10,000 third party sellers.
Theoretically, as RED has recently worked with many Western brands to create official webshops, these products should be safe from fakes, however, this is not the case.
Are there counterfeits on RED?
Yes. Early in 2019, the platform became the subject of highly-publicized user reviews questioning the authenticity of cosmetics products. One post highlighting questionable products was viewed over 5 million times and received more than 290 comments in response. In March 2019 there was another wave of criticism aimed at RED for fake products, fake reviews, and murky relationships between influencers and sellers.
There are two potential sources of fakes on RED which brands should be aware of. Users cannot post links or sell directly, however, they can post their contact details and many user profiles will contain images or keywords which entice consumers into making contact with them. These users should be monitored for examples of counterfeit products.
Similarly, there are also 10,000 third party sellers on the Mall, resulting in an additional set of potential problems that brands should consider.
How can I enforce against IP infringement on RED?
RED has an area for brands to complain about infringing listings and user profiles. However, Chinese language instructions and the in-app only search mechanism mean that many Western brands will struggle to navigate the process. For this reason, Pointer have native Chinese speakers and IP experts on hand to assist with helping brands negotiate this growing problem. If you’d like to know more about how Pointer can help you defend your brand online, please email us at email@example.com