RED Removed from App Store, Health Food’s UGC Marketing in Peril

In a hugely significant move Red, one of China’s largest social ecommerce platforms has seen its APP pulled from Android stores in China. Since its inception, Red has struggled to monetize its large user base and maintain the quality of user generated content. Although no official reason for its removal from the APP store has been released, it is believed that a preponderance of spurious content related to health food is to blame.

A popular social commerce platform called Red has been suspended from Android stores in China since July 29, 2019.^[1] The app on the Android Store is currently not available, though it’s still accessible on the Apple store. Red officially issued a statement on Aug 1, stating that it would conduct a self-review and proactively respond to a government edict to improve the integrity of China’s ecommerce ecosystem and cut down on unethical and illegal sales and marketing practices.

Hype and flop of Red

Red has grown rapidly in recent years. It has 0.25 billion users and generates an average of 3 billion posts each day of which 70% are generated by its users.^[2] That is what we know as UGC (User Generate Content). It was originally a community where users were free to share their personal experience or tips about almost everything such as foods, cosmetics, trip destinations and dresses. After securing a critical mass in terms of its user numbers, Red switched from its forum style platform and stepped into the world of ecommerce allowing users and retailers to sell. After some initial success, Red quickly became a nidus for fake review, paid ads, click farms, fake personal recommendations and several other nefarious methods to boost sales and traffic.

Status quo of food brands on Red

Our analysts at ChemLinked found brand accounts for Swisse, By-health, New Zealand nutrition brand MHD, Blackmores and other large multinationals such as Coca-Cola, Oishi, Lay’s. Swisse has 258,000 followers, making it the largest company from the food sector in terms of following. MHD has 76,000 followers, By-health 32,000 followers and Blackmores 18,000. Interestingly Lay’s and Coca-Cola have only 13,000 and 258 followers pointing to the over representation of health foods on RED and the significant money spent by health food companies to promote their products.

Health food, disaster zone

Almost all the health food advertisements on Red violate China’s Advertising Law. (refer to Compliance Strategy for Food Advertising in China). For example, among the over 77,000 posts relating to Swisse, ChemLinked found that the majority contain function claims that are not officially recognized, illegal or which purport clinical efficacy, such as alleviating urinary problem, mitigating impact of pollution, treating dermatological conditions and treating gynecological conditions.^[3]
As of today, Red is still banned from China’s android App store, and no date has been given on when it will be reinstated. If user-generated content continues to infringe on advertising laws, it is difficult to see Red solving this issue.