How Xiaohongshu’s New AIPS Model Redefines Grass-Planting Marketing

January 10, 2025

Xiaohongshu 2025 Will Business Summit

At the 2025 WILL Business Conference, Xiaohongshu unveiled a groundbreaking marketing framework: the “AIPS Audience Asset Model.” This innovation aims to transform how brands measure and optimize their grass-planting (content-driven marketing) campaigns on Xiaohongshu. By integrating process measurement and outcome measurement, Xiaohongshu has equipped brands with actionable insights to enhance their marketing efficiency. Here’s a breakdown of the key takeaways and their implications for brands.

Understanding the AIPS Model

The “AIPS Audience Asset Model” divides audience engagement into five categories:

  1. Awareness – General recognition of the brand.
  2. Interest – Initial interest in products or services.
  3. True Interest (TI) – Deep engagement and potential intent to purchase.
  4. Purchase – Conversion into actual sales.
  5. Share – Advocacy through post-purchase sharing and recommendations.

Xiaohongshu's AIPS Audience Asset Model

This segmentation allows brands to evaluate and optimize their strategies at every stage of the consumer journey. The model identifies more immediate and relevant user behaviors compared to traditional conversion metrics, offering brands a comprehensive view of audience engagement.

Measuring Grass-Planting Success

Xiaohongshu’s measurement framework operates on two levels:

1. Process Measurement

The AIPS model focuses on audience behavior within Xiaohongshu’s ecosystem, helping brands understand the nuances of user decision-making. For instance, while low-cost fast-moving consumer goods (FMCG) may require a focus on awareness to drive quick conversions, high-ticket items necessitate a deeper engagement with “Interest” and “True Interest” audiences.

Process Mesurement

2. Outcome Measurement

Outcome measurement is achieved through two primary methods:

  • Grass-Planting Alliance: This initiative integrates Xiaohongshu’s platform data with external e-commerce platforms like Taobao, JD, and VIP.com. Brands can track the direct impact of Xiaohongshu’s campaigns on off-platform conversions. For example, Xilinmen identified a high-converting audience segment (“refined white-collar workers”) and optimized their budget, achieving an ROI of over 15 during the 618 shopping festival.
  • First-Party Data Collaboration: Participating brands can analyze their omnichannel data to gain deeper insights into business performance. Xiaohongshu’s “Lingxi” platform now supports 5,000+ brands, offering accessible tools for data-driven optimization.

Outcome Mesurement

ROI (T+x): A New Way to Measure Success

One of Xiaohongshu’s key insights is the importance of ROI over time (T+x). While traditional ROI focuses on immediate returns, Xiaohongshu advocates for analyzing ROI across the consumer decision-making period. For example:

  • A ¥3,000+ robotic vacuum cleaner required 45-60 days to reach a tipping point in ROI due to the complexity of consumer decisions.
  • A ¥100 body oil, initially estimated to have a 7-day decision cycle, revealed a true cycle of 60-90 days. This discovery helped the brand target high-value audiences like expectant mothers, resulting in a 20% year-on-year GMV growth during Double 11.

ROI (T+x)

Precision and Granularity: The Keys to Success

Xiaohongshu’s CMO Zhiheng emphasized that measurement is a means to an end: optimizing marketing strategies. The two pillars of this optimization are:

  • Granularity: Understanding consumer behavior, needs, and decision-making contexts.
  • Precision: Matching the right products with the most suitable influencers, content, and marketing channels.

Xiaohongshu's CMO Zhiheng

A compelling example comes from an outdoor jacket campaign. Xiaohongshu tailored content to specific mountains (e.g., lightweight jackets for Mount Tai’s night hikes versus UV-protective gear for Mount Siguniang). This hyper-targeted approach resulted in a top-four search ranking for high-end jackets and a 40% reduction in e-commerce platform costs.

Implications for Brands

Xiaohongshu’s AIPS model and measurement solutions mark a shift toward personalized, data-driven marketing. By understanding niche audiences and aligning strategies with consumer decision-making cycles, brands can achieve better ROI and long-term growth.

Interested in unlocking the full potential of Xiaohongshu for your brand? Reach out to us today to explore tailored strategies that drive results!

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Hermès’s Innovative WeChat Campaign: Bridging Digital and Physical Worlds in China’s Luxury Market

December 24, 2024

Introduction to Digital Innovation at Hermès

In an era where digital transformation shapes marketing strategies, Hermès has set a benchmark in China’s dynamic market. This blog post explores Hermès’s recent groundbreaking campaign that harmoniously blends offline exhibitions with interactive WeChat Mini Programs, setting new standards for engaging consumers in China’s competitive luxury landscape.

海报

Poster

Exploring the Campaign’s Mechanics

The campaign revolved around an engaging scavenger hunt/escape room that took place during an exclusive offline exhibition. Participants embarked on a journey through the venue, tasked with discovering horse-themed items—a tribute to Hermès’s equestrian roots. Each item was cleverly integrated into the exhibition, encouraging visitors to explore in-depth.

Hermes Exhibition

Inside The Exhibition

Digital Integration via WeChat Mini Program

The brilliance of this campaign was further amplified through its digital strategy, utilizing a WeChat Mini Program. Participants used this platform to log the items they discovered by clicking the corresponding images. This seamless integration of digital tools ensured a smooth and engaging user experience, highlighting the potential of WeChat Mini Programs in bridging online and offline worlds.

wechat mini program

WeChat Mini Program

Rewards and Incentives

To add excitement, Hermès offered exclusive branded rewards to those who successfully completed the scavenger hunt. This strategy not only enhanced participation rates but also created a memorable experience that participants were likely to share across their social networks.

激励

Rewards and Incentives

Key Learnings from Hermès’s Strategy

  1. Seamless O2O Integration
    • The campaign is a prime example of effective Online-to-Offline (O2O) integration, which keeps users engaged by connecting digital actions with physical experiences. This approach is particularly resonant in China’s retail environment, where digital engagement can significantly amplify physical marketing efforts.
  2. Gamification Drives Engagement
    • By gamifying the exhibition experience, Hermès managed to transform a traditional marketing event into an interactive adventure. Gamification is a powerful tool in digital marketing, especially on platforms like WeChat, where user engagement can directly translate into higher brand loyalty and customer retention.
  3. Narrative-Driven Branding
    • Hermès’s focus on storytelling, by integrating its brand heritage into the campaign, helped reinforce its identity and values. This strategy not only enriched the consumer experience but also bolstered the brand’s image in the eyes of Chinese consumers, who value rich, narrative-driven interactions.

Conclusion: A Model for Future Campaigns

Hermès’s campaign demonstrates the profound impact of integrating innovative digital marketing strategies with traditional methods. For brands looking to make a mark in China’s luxury market, leveraging social media platforms like WeChat through Mini Programs offers a direct route to consumer engagement.

This case study serves as a reminder of the effectiveness of combining physical and digital experiences in a marketing strategy, especially in a highly digital society like China. Brands aiming to expand in the Chinese market should consider similar integrations to captivate and engage with their audience effectively.

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Macau’s Tourism Transformation: Luxury Brands Left Behind?

October 30, 2024

Macau’s visitor numbers are surging, bolstering the city’s status as an important destination for Greater Bay Area travelers. Official data showed that Macau saw a record-breaking day this past Saturday, with a total of 197,000 visitors entering the city.

This brought overall visitors in 2024 to over 20 million, with average daily visitors climbing to 93,000 – 36% higher than during the same period in 2023 and 83% of pre-pandemic levels.

The Macau Government Tourism Office recently set a target of 33 million visitors for 2024, a number the SAR is likely to achieve by year’s end. This compares to the 28 million visitors Macau welcomed in 2023, and over 39 million visitors the city recorded at peak levels in 2019.

Policy payoff #

Macau’s growing number of visitors can be directly attributed to July’s increase in duty-free shopping allowances for Chinese visitors, with both Macau and Hong Kong setting new total limits of 15,000 RMB ($2,090).

Broken down, that comprises 12,000 RMB ($1,670) for luggage-carry items, more than double the previous limit of 5,000 RMB ($695), while the additional 3,000 RMB ($418) is reserved for purchases at duty-free stores at border locations.

The city’s pivot towards the broader tourist market follows China’s capital control measures limiting high-stakes gamblers and more recently, the country’s criminalization of illegal money-changing activities, which allowed Chinese players to circumvent the controls.

In addition, Macau’s increased tourism is also linked to the recent Hengqin-Macau multiple-entry policy, introduced in May. Under the policy, mainland Chinese tour groups are issued a special visa that allows them to make multiple trips into Macau through the city’s neighboring island of Hengqin.

Diversification beckons #

A pivot to more entertainment, family-friendly activities, F&B as well as cultural highlights and events has garnered more interest from a wider range of tourists, including families, to the casino hotspot. Macau’s Chief Executive Ho lat Seng announced that the city’s new measures “will contribute to consolidating Macau’s role as a global tourism and leisure center and creating more advantageous conditions for the development of adequate diversification of the economy.”

Despite rising visitor numbers and efforts to attract Chinese tourists, Macau’s luxury retail shops continue to decline. Retailers interviewed across clothing, watches, jewelry, cosmetics, and other segments all saw 30% to 50% YoY sales drops in April. Experts chalk up the numbers to changing consumption patterns.

“The luxury retail shops in Macau are targeting mainland Chinese, and more and more of these duty-free shops opening in recent years will make Macau less attractive,” Nelson Kot, president of the Macau Comprehensive Social Research Association, is reported as saying when addressing the “reshaping” consumption patterns of Chinese travelers.

Brands still have an opportunity to engage high-spending Chinese tourists in Macau, but as the landscape becomes more competitive, they will have to up the ante on activations, pop-ups and shopping-as-entertainment experiences to engage consumers. As many Chinese reallocate their leisure spending to experiential purchases such as travel, over buying just luxury goods, the question remains whether cities like Macau (and Hong Kong) can capitalize on their offerings for both.

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Redefining Luxury: The Influence of Niche Brands in China

February 26, 2024

China’s fashion landscape is witnessing a profound shift as niche brands and independent luxury lables carve out their space in the hearts and closets of discerning consumers. This trend reflects a broader movement towards individuality, authenticity, and meaningful consumption in one of the world’s largest markets.

The Emergence of Niche Brands

In recent years, a surge of interest has propelled lesser-known brands into the spotlight. Thus challenging the dominance of established luxury houses. Brands like Anya Hindmarch, Brandy Melville, and To Summer are capturing the imagination of Chinese consumers with their distinctive offerings. What sets these labels apart are not just their products but the stories they tell and the experiences they offer.

To Summer China Brand

Consumer Shifts and Preferences

One of the driving forces behind the rise of niche brands is the evolving mindset of consumers, particularly among the younger demographic. Gen Z, in particular, seeks more than just status symbols; they crave authenticity and individual expression. This demographic shift is reshaping the luxury landscape, with consumers increasingly prioritizing design, value, and personal connection over conspicuous branding.

Read more about Gen Z and how to Target Them

The Allure of Niche Brands

The allure of niche brands lies in their ability to offer exclusivity and a sense of belonging to a community of like-minded individuals. These brands go beyond mere products; they curate experiences and foster connections through storytelling, events, and social media engagement. For consumers, niche brands like Vivienne Westwood and Annakiki resonate not just for their designs but for the values they embody.

Sustainability and Mindful Consumption

Furthermore, the COVID-19 pandemic has accelerated changes in consumer behavior, with an increasing emphasis on mindful consumption and sustainability. Brands like Filippa K and Nanushka are capitalizing on this shift by championing sustainable practices and engaging in transparent communication with their audience. Above all, Chinese consumers, renowned for their discernment, are embracing brands that align with their values and beliefs.

Navigating the Chinese Market

The success of niche brands hinges not only on their products. Their ability to navigate the intricacies of the Chinese market is equally important. E-commerce platforms, social media, and strategic partnerships play a pivotal role in amplifying brand visibility and fostering customer engagement. However, entering and thriving in China’s competitive market requires more than just a strong digital presence; it demands a deep understanding of local preferences and cultural nuances.

Top Chinese E-commerce Platforms and Entry Fees

Adapting Strategies

In response to these changing dynamics, established luxury houses are also recalibrating strategies to embrace the rise of niche brands. Brands like Louis Vuitton are tapping into the demand for limited editions and immersive experiences. These kind of tactics cater to the evolving tastes of Chinese consumers.

Selling On WeChat: How Brands Can Do and Is it Better Than Other E-commerce Platforms?

Future Outlook

Looking ahead, the trajectory of niche brands in China appears promising, driven by a growing appetite for authenticity and individuality. As consumers continue to seek out brands that resonate with their values, the market is ripe for further innovation and disruption. With the right blend of creativity, authenticity, and strategic foresight, niche brands are poised to leave an indelible mark on China’s dynamic fashion landscape.

In conclusion, the rise of niche brands in mainland China signals a profound shift in consumer preferences and market dynamics. As the pursuit of authenticity and individuality takes center stage, brands that embody these values are redefining the notion of luxury. They are also the ones reshaping the fashion industry’s future in China and beyond.

If you wish to know more about marketing in China, please contact our team. We use our knowledge and expertise to help businesses build meaningful partnerships and develop their network among Chinese customers. For additional information, please contact at contact@thewechatagency.com.

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