China

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.

Climate

The West’s drought could bring about a data center reckoning

When it comes to water use, data centers are the tech industry’s secret water hogs — and they could soon come under increased scrutiny.

Lake Mead, North America's largest artificial reservoir, has dropped to about 1,052 feet above sea level, the lowest it's been since being filled in 1937.

Photo: Mario Tama/Getty Images

The West is parched, and getting more so by the day. Lake Mead — the country’s largest reservoir — is nearing “dead pool” levels, meaning it may soon be too low to flow downstream. The entirety of the Four Corners plus California is mired in megadrought.

Amid this desiccation, hundreds of the country’s data centers use vast amounts of water to hum along. Dozens cluster around major metro centers, including those with mandatory or voluntary water restrictions in place to curtail residential and agricultural use.

Keep Reading Show less
Lisa Martine Jenkins

Lisa Martine Jenkins is a senior reporter at Protocol covering climate. Lisa previously wrote for Morning Consult, Chemical Watch and the Associated Press. Lisa is currently based in Brooklyn, and is originally from the Bay Area. Find her on Twitter ( @l_m_j_) or reach out via email (ljenkins@protocol.com).

Every day, millions of us press the “order” button on our favorite coffee store's mobile application: Our chosen brew will be on the counter when we arrive. It’s a personalized, seamless experience that we have all come to expect. What we don’t know is what’s happening behind the scenes. The mobile application is sourcing data from a database that stores information about each customer and what their favorite coffee drinks are. It is also leveraging event-streaming data in real time to ensure the ingredients for your personal coffee are in supply at your local store.

Applications like this power our daily lives, and if they can’t access massive amounts of data stored in a database as well as stream data “in motion” instantaneously, you — and millions of customers — won’t have these in-the-moment experiences.

Keep Reading Show less
Jennifer Goforth Gregory
Jennifer Goforth Gregory has worked in the B2B technology industry for over 20 years. As a freelance writer she writes for top technology brands, including IBM, HPE, Adobe, AT&T, Verizon, Epson, Oracle, Intel and Square. She specializes in a wide range of technology, such as AI, IoT, cloud, cybersecurity, and CX. Jennifer also wrote a bestselling book The Freelance Content Marketing Writer to help other writers launch a high earning freelance business.
Workplace

Indeed is hiring 4,000 workers despite industry layoffs

Indeed’s new CPO, Priscilla Koranteng, spoke to Protocol about her first 100 days in the role and the changing nature of HR.

"[Y]ou are serving the people. And everything that's happening around us in the world is … impacting their professional lives."

Image: Protocol

Priscilla Koranteng's plans are ambitious. Koranteng, who was appointed chief people officer of Indeed in June, has already enhanced the company’s abortion travel policies and reinforced its goal to hire 4,000 people in 2022.

She’s joined the HR tech company in a time when many other tech companies are enacting layoffs and cutbacks, but said she sees this precarious time as an opportunity for growth companies to really get ahead. Koranteng, who comes from an HR and diversity VP role at Kellogg, is working on embedding her hybrid set of expertise in her new role at Indeed.

Keep Reading Show less
Amber Burton

Amber Burton (@amberbburton) is a reporter at Protocol. Previously, she covered personal finance and diversity in business at The Wall Street Journal. She earned an M.S. in Strategic Communications from Columbia University and B.A. in English and Journalism from Wake Forest University. She lives in North Carolina.

Climate

New Jersey could become an ocean energy hub

A first-in-the-nation bill would support wave and tidal energy as a way to meet the Garden State's climate goals.

Technological challenges mean wave and tidal power remain generally more expensive than their other renewable counterparts. But government support could help spur more innovation that brings down cost.

Photo: Jeremy Bishop via Unsplash

Move over, solar and wind. There’s a new kid on the renewable energy block: waves and tides.

Harnessing the ocean’s power is still in its early stages, but the industry is poised for a big legislative boost, with the potential for real investment down the line.

Keep Reading Show less
Lisa Martine Jenkins

Lisa Martine Jenkins is a senior reporter at Protocol covering climate. Lisa previously wrote for Morning Consult, Chemical Watch and the Associated Press. Lisa is currently based in Brooklyn, and is originally from the Bay Area. Find her on Twitter ( @l_m_j_) or reach out via email (ljenkins@protocol.com).

Entertainment

Watch 'Stranger Things,' play Neon White and more weekend recs

Don’t know what to do this weekend? We’ve got you covered.

Here are our picks for your long weekend.

Image: Annapurna Interactive; Wizard of the Coast; Netflix

Kick off your long weekend with an extra-long two-part “Stranger Things” finale; a deep dive into the deckbuilding games like Magic: The Gathering; and Neon White, which mashes up several genres, including a dating sim.

Keep Reading Show less
Nick Statt

Nick Statt is Protocol's video game reporter. Prior to joining Protocol, he was news editor at The Verge covering the gaming industry, mobile apps and antitrust out of San Francisco, in addition to managing coverage of Silicon Valley tech giants and startups. He now resides in Rochester, New York, home of the garbage plate and, completely coincidentally, the World Video Game Hall of Fame. He can be reached at nstatt@protocol.com.

Latest Stories
Bulletins