China’s social e-commerce app Xiaohongshu, also known as RED, has shut both of its brick-and-mortar experience stores in Shanghai, local media reported on Thursday.
Why it matters: Shanghai-based Xiaohongshu is drawing back on its the new retail initiative as it refocuses on its online operations after a tumultuous 2019, when it was suspended from app stores for three months.
- Chinese online retailers such as Kaola and Vipshop have been building an offline presence over the past two years, adopting a “new retail” trend where online and offline shops are connected for a more holistic customer experience.
Details: The company confirmed the offline store closures when contacted by TechNode on Thursday.
- The offline store was only an experimental, new retail project, a company spokeswoman said in a written response, adding that most of the company’s offline stores were profitable after operating for a year.
- “The goal for the new retail push was not store number and revenue size. With the aim to build more shopping scenarios to facilitate efficient and in-depth integration between users and brands, we will continue to adjust our strategy,” (our translation) the spokeswoman said.
- She declined to comment on the plan for offline stores in other cities.
- Xiaohongshu rolled out on Wednesday a new analytics tool for quality content contributors to better manage and interact with their audiences. Content generators with a following exceeding 5,000 fans and more than 2,000 views each for at least 10 posts during the past six months can apply for the feature, provided that they have a good history record in complying with the app’s rules.
Context: Xiaohongshu opened its first RedHome physical store at Shanghai’s Joy City mall in June 2018 and gradually expanded to cities in the Yangtze River Delta region such as Suzhou, Hangzhou, and Ningbo.
- The number of offline stores it has opened is unknown.
- One day earlier, the company announced its plan to open up to more merchants by broadening its restrictive vendor account parameters to include sellers of all sizes rather than just trademarked brands.