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The Future of Shopping Is Already Happening in China

Traditional retail and e-commerce hold little interest for consumers who are wedded to smartphones and take their cues from influencers.
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Illustration: Kurt Woerpel for Bloomberg Businessweek

When Shanghai university student Milky Guan buys cosmetics, she isn’t impressed by beauty stores and big name brands. Instead, the 20-year-old relies on a Chinese social media shopping website called Xiaohongshu, or Little Red Book, to figure out what’s hot and what’s not. On Xiaohongshu—a startup that’s part e-commerce portal and part social media platform—Guan follows a popular online beauty influencer who teaches her fans how to apply makeup. During a recent livestream demonstration by the blogger, Guan snapped up four different cosmetic products within minutes—simply clicking on links embedded in the video.

Guan is among the millions of shoppers born after 1996, known as Generation Z, who are starting to upend China’s sprawling retail industry. They’ve been raised on mobile devices, and social media isn’t just where they spend time—it’s where they spend cash.