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Foreign brands have a new fast-track into China's market: the addictive app Red

The shopping app holds its users' attention three times longer than Pinterest.

Foreign brands have a new fast-track into China's market: the addictive app Red

An ad for Xiaohongshu: "find good things from around the world."

Protocol screengrab via Baidu

Laijiang has a second life. The 30-year-old Tokyo-based tech worker is also a fashion influencer on Chinese social media and ecommerce platform Xiaohongshu ("Red" in English). The Chinese national stumbled upon the lucrative side-hustle in 2018 by sharing tips from her travels in Japan. Less than two years later, Laijiang has amassed over half a million followers and collaborated with dozens of clothing, accessory and cosmetic brands.

Originally a cross-border shopping guide that lived on PDFs in 2013, Xiaohongshu has since grown into one the world's largest lifestyle-focused social media platforms by user numbers. Valued at $5 billion and backed by both Alibaba and Tencent, it's now a mega app equivalent to a combination of Instagram, YouTube, Pinterest, TripAdvisor and The New York Times' Wirecutter. Marrying user-generated content with ecommerce, Xiaohongshu thrives by catering to fashion-forward young women and luring them to spend ever more time on the platform. According to Beijing-based analytics firm Analysys, Xiaohongshu was China's third-largest ecommerce platform by active users in December, after Taobao and JD.com. In 2020, its monthly active user numbers grew steadily from 83 million in February to 138 million by December, a 66% increase.

Key to Xiaohongshu's popularity is an obsession with "stickiness" that the world's other big social-and-shopping apps can't match. On average, each Xiaohongshu user last December spent 40 minutes per day on the platform — almost three times longer than Pinterest users — and opened the app more than four times each day, according to Analysys. Each day, it raked in 8 billion views on hundreds of thousands of review articles churned out by influencers and regular users alike. This creates an ocean of user data that then allows algorithms to see and predict trends more accurately and determine what people might be interested in buying, rather than pushing ads based on searches or purchases on other sites.

The algorithms that make this all work are a focus for imitation and debate. Sellers have tried to write hacks — for example, reverse engineering the scoring system that made a post go viral — to game Xiaohongshu. Frequently updating content is certainly rewarded. Laijiang tells Protocol that certain actions, like linking to items on other sites like Taobao or WeChat, will hurt her traffic. "Xiaohongshu hates when you divert traffic to other platforms," she said.

A fast track to relevance

Laijing's first clients were domestic, but her latest are global.

At first, Chinese designer brands collaborated with her on brand launches, sales events, livestream shows and product reviews. During the pandemic, some smaller, independent Japanese brands whose offline businesses were hit hard started approaching her for promotion opportunities. Now Laijiang is in talks with an independent French purse maker that's hugely popular on Instagram, as it plans its Xiaohongshu debut.

Global brands are still learning that they have to go to China, and that a social network nearly unknown five years ago can help them get there faster. More than most, Chinese consumers look within their trusted networks, not at conventional ads, when making purchase decisions. That includes influencers, who can "dai huo" (带货), or generate sales for, products they back.

It's hard work. Twice a month, Laijiang spends five hours livestreaming outfit-matching and product presentations to thousands of followers. On top of that, she shares images and short video-packed product reviews or shopping lists, which the platform calls "notes,'' with her followers — mostly affluent, urban young professionals with a taste for minimalism. If she forgets to leave a link to a featured item in her notes, a parade of followers will ask where they can buy it. Some of her popular reviews — which users call baokuanbiji (爆款笔记), or "explosive notes" — can garner tens of thousands of likes, and conversion rates can be as high as 20%.

Compared to advertising on traditional ecommerce platforms, working with influencers on Xiaohongshu is more costly. Independent agencies that manage influencers can eat as much as 100% of the revenue from sales, according to Jacob Cooke, CEO and co-founder of WPIC, a Beijing-based, big data marketing consultancy. But it's a game global brands feel they must play to grab a quick slice of the Chinese market. Laijiang says the commission each agency or influencer gets depends on the specific partnership. After her agency and Xiaohongshu eat away their shares of the commission, she ends up getting about half of the commission. For example, if a brand offers a commission rate of 10%, she ends up with 5%.

"Xiaohonghsu allows you to build up that awareness really quickly," Cooke said. "Especially if you've got something that people want to share or it can go viral, you can squish that awareness part down to three or four months."

Laijiang says she will consider starting her own business or going full-time as an influencer when the time is right. Smaller international brands are getting more curious about the platform while treading carefully; those with tiny budgets are offering her a bag or a piece of clothing in exchange for a livestream show. Still, Laijiang's earnings as a part-time Xiaohongshu influencer already exceed that of her well-paying, full-time job.

Correction: An earlier version of this story misstated Laijing's age. This story was updated Feb. 12 2021.

Power

Google wants to help you get a life

Digital car windows, curved AR glasses, automatic presentations and other patents from Big Tech.

A new patent from Google offers a few suggestions.

Image: USPTO

Another week has come to pass, meaning it's time again for Big Tech patents! You've hopefully been busy reading all the new Manual Series stories that have come out this week and are now looking forward to hearing what comes after what comes next. Google wants to get rid of your double-chin selfie videos and find things for you as you sit bored at home; Apple wants to bring translucent displays to car windows; and Microsoft is exploring how much you can stress out a virtual assistant.

And remember: The big tech companies file all kinds of crazy patents for things, and though most never amount to anything, some end up defining the future.

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Mike Murphy

Mike Murphy ( @mcwm) is the director of special projects at Protocol, focusing on the industries being rapidly upended by technology and the companies disrupting incumbents. Previously, Mike was the technology editor at Quartz, where he frequently wrote on robotics, artificial intelligence, and consumer electronics.

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The future of computing at the edge: an interview with Intel’s Tom Lantzsch

An interview with Tom Lantzsch, SVP and GM, Internet of Things Group at Intel

An interview with Tom Lantzsch

Senior Vice President and General Manager of the Internet of Things Group (IoT) at Intel Corporation

Edge computing had been on the rise in the last 18 months – and accelerated amid the need for new applications to solve challenges created by the Covid-19 pandemic. Tom Lantzsch, Senior Vice President and General Manager of the Internet of Things Group (IoT) at Intel Corp., thinks there are more innovations to come – and wants technology leaders to think equally about data and the algorithms as critical differentiators.

In his role at Intel, Lantzsch leads the worldwide group of solutions architects across IoT market segments, including retail, banking, hospitality, education, industrial, transportation, smart cities and healthcare. And he's seen first-hand how artificial intelligence run at the edge can have a big impact on customers' success.

Protocol sat down with Lantzsch to talk about the challenges faced by companies seeking to move from the cloud to the edge; some of the surprising ways that Intel has found to help customers and the next big breakthrough in this space.

What are the biggest trends you are seeing with edge computing and IoT?

A few years ago, there was a notion that the edge was going to be a simplistic model, where we were going to have everything connected up into the cloud and all the compute was going to happen in the cloud. At Intel, we had a bit of a contrarian view. We thought much of the interesting compute was going to happen closer to where data was created. And we believed, at that time, that camera technology was going to be the driving force – that just the sheer amount of content that was created would be overwhelming to ship to the cloud – so we'd have to do compute at the edge. A few years later – that hypothesis is in action and we're seeing edge compute happen in a big way.

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Saul Hudson
Saul Hudson has a deep knowledge of creating brand voice identity, especially in understanding and targeting messages in cutting-edge technologies. He enjoys commissioning, editing, writing, and business development, in helping companies to build passionate audiences and accelerate their growth. Hudson has reported from more than 30 countries, from war zones to boardrooms to presidential palaces. He has led multinational, multi-lingual teams and managed operations for hundreds of journalists. Hudson is a Managing Partner at Angle42, a strategic communications consultancy.
Transforming 2021

Blockchain, QR codes and your phone: the race to build vaccine passports

Digital verification systems could give people the freedom to work and travel. Here's how they could actually happen.

One day, you might not need to carry that physical passport around, either.

Photo: CommonPass

There will come a time, hopefully in the near future, when you'll feel comfortable getting on a plane again. You might even stop at the lounge at the airport, head to the regional office when you land and maybe even see a concert that evening. This seemingly distant reality will depend upon vaccine rollouts continuing on schedule, an open-sourced digital verification system and, amazingly, the blockchain.

Several countries around the world have begun to prepare for what comes after vaccinations. Swaths of the population will be vaccinated before others, but that hasn't stopped industries decimated by the pandemic from pioneering ways to get some people back to work and play. One of the most promising efforts is the idea of a "vaccine passport," which would allow individuals to show proof that they've been vaccinated against COVID-19 in a way that could be verified by businesses to allow them to travel, work or relax in public without a great fear of spreading the virus.

Keep Reading Show less
Mike Murphy

Mike Murphy ( @mcwm) is the director of special projects at Protocol, focusing on the industries being rapidly upended by technology and the companies disrupting incumbents. Previously, Mike was the technology editor at Quartz, where he frequently wrote on robotics, artificial intelligence, and consumer electronics.

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