With latest hit Lemon8, ByteDance learns again from the China playbook

by Ana Lopez

The app is very similar to Xiaohongshu, a Chinese social media platform with 260 million MAUs

In the middle of a wave From heated debates over whether TikTok should be banned, another ByteDance product, Lemon8, has emerged and quickly climbed into the top 10 US app stores.

The sudden rise of Lemon8 is reminiscent of the early growth of TikTok. Vine was already a pioneer of short video sharing in the US back then, but TikTok took the media format to the next level through its content recommendation algorithms, a system that had proved immensely successful in China for its sister app, Douyin.

Some industry observers now describe Lemon8 as something at the crossroads of Instagram, Pinterest and Amazon, but those familiar with China’s internet ecosystem would immediately recognize that the app is an example of “copy-from-China”.

For much of China’s early internet history, entrepreneurs took inspiration from trends with strong momentum in the US and built something similar in China, leading to the country’s responses to Google, Facebook and the like. That practice is still around, as evidenced by the group of companies expressing their ambitions to become China’s OpenAI; but there is also a reversal of the trend as China’s homegrown tech talent becomes more sophisticated and invents newer services that don’t yet exist abroad.

At a glance, Lemon8’s photo-intensive layout and peer-to-peer reviews are very similar to Xiaohongshu, the Chinese social commerce platform with 260 million monthly active users. Xiaohongshu, meaning “Little Red Book,” has become the go-to online community for Chinese youth over the past decade to learn lifehacks in areas ranging from pregnancy health and surviving China’s centralized quarantine to finding the best Chinese restaurants in Dusseldorf.

Bike sharing, live shopping and social commerce are just some of the Chinese internet business models that have found users abroad. Xiaohongshu has entered other Asian markets through Uniik and Spark, but neither has taken off. Now ByteDance is taking Xiaohongshu’s playbook west, following what TikTok has done with learning from Douyin’s model at home.

The little red playbook

Image Credits: Xiaohongshu

Established as a foreign shopping guide sharing platform, Xiaohongshu has mainly focused on gathering practical information. Posts are arranged in a Pinterest-like grid, but ranked in part by the number of “saves” they get. And unlike Instagram, there’s little competition to post the most glamorous photos. Instead, images are used to put the notes posted by users into context, such as a COVID-19 PCR result needed to board a flight to China.

Rather than favor professionally crafted influencer posts, the app encourages the discovery of long-tail content and emphasizes relevance over entertainment. When users are on Xiaohongshu, they experience what’s called “zhongcao,” literally “planting grass,” a concept popularized by the platform to convey the effect of wanting to buy something after someone else, whether it’s a friend or an influencer recommended it.

Of Xiaohongshu’s 260 million MAUs, 69 million are content creators. said at a recent event. Seventy percent of users are female and born after 1990. Most users live in the more prosperous Chinese cities. At its peak, the company’s valuation reached $20 billion, but reportedly dropped to $10-$16 billion last year, when China’s crackdown on technology lowered investor confidence.

It’s too early to tell if Lemon8 can bring zhongcao culture to the US and beyond. For now, most of the app’s traction seems to come largely from splashy ads and approval by influencers via TikTok.

There are also signs that Lemon8 is paying influencers to post content. This is a common practice among Chinese social media platforms, including Douyin. But this is perhaps the biggest difference that separates Lemon8 from Xiaohongshu, which has rarely paid large grants to influencers. Authenticity, many argue, is why Xiaohongshu’s content has stood the test of time.

In its infancy, Lemon8 is probably nowhere near monetization, but it would be interesting to see what steps it takes to monetize if and when the app builds a significant user base. It could be looking at Xiaohongshu, which is currently monetizing through advertising and e-commerce commissions. Of course, it is never easy to simply transport an existing business model from one country to another, whether it is a copy from or to China. Even the ByteDance mammoth has that struggled to evangelize live shopping, which now generates a large portion of Douyin’s revenue in China, to Western countries.

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