When China cleans up apps, it hurts users the most
Hot social shopping app Xiaohongshu returns after a three-month long “rectification,” but users have lost sales and are baffled by new rules
For Chinese tech companies, being temporarily pulled from app stores for “rectification” is now such a normal occurrence that some call it a “coming of age ceremony.” But it’s actually a term authorities in China use when they force a company to change their apps to conform with regulations.
The most recent app to draw widespread attention for going through the process? Xiaohongshu, China’s social ecommerce darling.
In spite of the mocking name, app rectification is not a celebratory occasion. It can stunt an app’s growth and open the door to competitors, which Xiaohongshu found out after it was scrubbed from app stores at the end of July.
The company said at the time that it was starting a comprehensive “investigation” and “rectification” of its content and will do “deep self-checks” in cooperation with “relevant departments.” That came after multiple media reports saying that the platform was loaded with fake reviews, promotional posts for cigarettes and vulgar content.
“The removal of Red was a signal from Beijing to remind platforms that they need to abide by the rules, with no one too big to be immune,” said Mark Tanner, managing director at marketing research company China Skinny, using Xiaohongshu’s official English name. “A ‘hot’ app like Red is a good app to make an example of.”
Anyone still using the app after it’s removed from stores are caught in the middle of China’s war on content. During the download ban, Xiaohongshu’s content review team was reportedly expected to check all user-generated posts, first screened by algorithms and then by human censors. But it wasn’t clear what kind of content crossed the line.
“My posts were often asked to be revised for no clear reason,” said Chen Xuyi, a Xiaohongshu user based in Shanghai. Chen said that sometimes she had to try deleting different parts of a post to get it to publish successfully. One of her posts recommending an Airbnb-like homestay that she liked was mistaken as an advertisement and wasn’t approved, she added.
Some posts would go through without any problems at all. Without any indication of what the problem is on other posts, using Xiaohongshu became a frustrating experience for some users.
“The time it takes to examine a post was very unstable,” said Fang, another Xiaohongshu user who only gave her surname. It sometimes took more than four hours for a post to get approved while others were approved almost immediately, she said. “And it never tells users which words caused the violations. You can only guess and keep making changes.”
Fang, who has about 2,000 followers on the platform, said that she feels less enthusiastic about using the app because some of her quality posts were not able to get exposure.
We reached out to Xiaohongshu with questions, but the company didn’t get back to us.
Other things can also contribute to a loss of existing users when an app isn’t available on app stores, Forrester senior analyst Xiaofeng Wang said. Removing an app from app stores affects updates, which means bugs aren’t fixed and new features can’t be added, Wang said. That might hurt traffic and user stickiness.
“It could also potentially damage users’ trust on these apps,” Fang said. “As a result, existing users may reduce using frequency or even abandon the app completely.”
Another downside of being booted from app stores? Opening the door to new rivals. Shortly after Xiaohongshu was pulled, for instance, Weibo released an app with a layout and features very similar to those of Xiaohongshu.
A big competitor like Weibo making its move might seem obvious, but Xiaohongshu saw several clones of its app appear in app stores while it was busy being rectified, according to Chinese media. Some of these apps soared to the top of the download charts, but they were also subsequently removed.
Xiaohongshu finally returned to Chinese Android app stores this week after being gone for nearly three months. With 85 million monthly active users and 250 million registered users, Xiaohongshu is one of the biggest apps targeted this year.
Typically, established companies are better able to weather this kind of disruption, but being removed from app stores can have a bigger impact on startups without an established user base, Fang said. When Tinder-like dating app Tantan was removed from app stores in April this year, Jefferies analyst Karen Chan wrote in a research note that its impact on user acquisitions should not translate into material revenue impact on its parent company Momo.
But the impact of such a ban can linger for the people actually using these platforms. That’s the case for some popular Xiaohongshu users, many of whom make a living on the platform.
“My biggest feeling was that the number of commercial orders significantly decreased,” said Xia, a Shanghai-based Xiaohongshu influencer who only gave her surname, recalling when Xiaohongshu was first removed from app stores. Xia has nearly 500,000 followers on the platform, where influencers like her share pictures and videos of their daily lives and get paid for plugging brands or specific products in posts, much like Instagram influencers.
Xia said that during the ban, some of her influencer friends with more followers than she has went a month without a single order.
The reason, according to Forrester’s Fang, is that news related to being pulled from app stores hurts the brand image, so advertisers might be cautious about spending on the app to avoid risks.
Still, removal from app stores isn’t an absolute ban. Workarounds are available, and not unusual in a country where people are used to hopping barriers to access content deemed unsuitable for them.
On Taobao, for instance, creative merchants offer tutorials to install Xiaohongshu on iPhones for less than 3 yuan (US$0.42). They provide alternate Apple IDs and instructions on how to access overseas App Stores, where Xiaohongshu is still available.
(Abacus is a unit of the South China Morning Post, which is owned by Alibaba, which operates Taobao.)