Xiaohongshu

Xiaohongshu was founded by Miranda Qu and Charlwin Mao in 2013 as an online tour guide for Chinese shoppers, providing a platform for users to review products and share their shopping experiences with the community. In October 2014, the founders started focusing on connecting Chinese consumers with global retailers and established its own cross-border e-commerce platform, where Chinese consumers could buy products from overseas and order directly.^{[citation needed]}

In 2015, Xiaohongshu set up its warehouses in Shenzhen, Guangdong and Zhengzhou, Henan.^[18]

By May 2017 Xiaohongshu had over 50 million users and earned nearly CN¥10 billion, making it one of the world's largest community e-commerce platforms. That month, Xiaohongshu's international logistics system REDelivery went into service.^[19] On 6 June that year, Xiaohongshu held a shopping festival to celebrate its fourth anniversary, which saw the sales revenue exceed CN¥ 100 million in 2 hours, while the app ranked in first place in the iOS App Store under the "Shopping" category that day.^[20]

In June 2018, the Alibaba Group and Tencent invested US$300 million in Xiaohongshu, with a valuation of US$3 billion.^[21]

In 2018, Xiaohongshu became an internationalized platform that attracted many overseas users. However, at the end of that year, Xiaohongshu encountered regulatory problems and its app store shelves were suspended.^[22]

Due to the platform's early focus on fashion and beauty trends, Xiaohongshu's user base was predominantly female in its early years. 90% of Xiaohongshu users were women, according to a report published in April 2021.^[23][24] The app had attracted affluent Gen Z female users in urban China as an alternative to Instagram, which is blocked in the country.^[25] Xiaohongshu subsequently adjusted its corporate strategy to attract more male users to maintain its growth. In 2021, it announced that the platform would promote male user content.^[26][27]

In 2023, Sequoia China bought the Xiaohongshu shares in multiple transactions at a valuation of $14 billion.^[28]

According to the Financial Times, Xiaohongshu completed a round of stake sales of existing shares to new and former investors around July 2024 that valued the company at around $17 billion. This round saw participation from prominent venture capital investors, including DST Global, HongShan (formerly Sequoia China), Hillhouse Investment, Boyu Capital, and Citic Capital. The platform, which already has significant backing from Chinese tech giants Tencent and Alibaba, achieved profitability in 2023 with a net profit of $500 million on revenues of $3.7 billion.^[29] It generates revenue primarily through advertising, particularly from cosmetics brands. However, it faces challenges as many users purchase recommended items on other platforms such as Taobao and Tmall, limiting Xiaohongshu's direct e-commerce potential. Despite having a large user base of over 300 million monthly active users with high engagement, its total revenue remains significantly lower than Douyin's.^[30]

Upon its launch, Xiaohongshu's initial focus was to provide overseas shopping advice to people through digital community interaction. Later, Xiaohongshu launched the function of Posting shopping notes in the community to provide customers with more timely shopping information. In 2014, it launched a "welfare service" function for cross-border shopping.^[31] In the past few years, these functions of Xiaohongshu have fueled the creation of new brands; Other brands have also received widespread attention and promotion.^[32] In terms of authentic self-management, the app has reached strategic cooperation with a number of domestic and overseas brands such as Australian health care brands Blackmore, Swisse,^[33] Marc Jacobs, Sephora^[34] and so on. These partnerships ensure that users of the app are buying genuine products. Xiaohongshu has established overseas warehouses in 29 countries around the world, and has built more than 150,000 square meters of bonded warehouses in Zhengzhou, Shenzhen and Ningbo. The app has built REDelivery to provide international logistics services to third-party merchants. ^[35] In the five months since Xiaohongshu launched its e-commerce model, sales have reached more than 200 million renminbi. As of June 2017, the revenue of Little Red Book was nearly 10 billion yuan.^[35]

Xiaohongshu is an innovative social media platform and e-commerce platform. In addition to users sharing overseas shopping experiences and recommending brand products, it also covers many aspects of daily life. ^[36] Two of the most common aspects are Lifestyle Tips and Tutorials. The Xiaohongshu content community has a wealth of information on practical lifestyle, daily life tips, health advice, and so on. Users of the platform could find out what they want to know by searching for keywords. Tutorials have received widespread attention in terms of beauty, fashion and cooking. ^[37]

On January 31, 2020, the first batch of 200,000 protective masks donated by Xiaohongshu arrived in Wuhan. These materials were handed over to the Wuhan East Lake Hi-Tech Zone Command Center for COVID-19 Control and Prevention for coordinated distribution to hospitals and communities in urgent need. Additionally, Xiaohongshu’s overseas procurement of more than 100,000 medical-grade protective items, including European standard FFP2 medical masks, has also been dispatched to China.

Xiaohongshu plans to allocate 10 million yuan for COVID-19 assistance, focusing on three main areas: First, the domestic and international procurement of masks, protective clothing, and other epidemic prevention materials to support the hardest-hit areas directly. Second, the establishment of a special psychological assistance fund, in partnership with professional psychological counseling agencies, to provide free counseling for healthcare workers, patients, and citizens affected by the epidemic. Third, Xiaohongshu will match user donations raised from the community “Come on Wuhan” public welfare live events and Spring Festival activities, with funds directed to public welfare and charitable organizations supporting the affected areas.^[38]

On September 7, 2024, Xiaohongshu Public Welfare announced the establishment of “BCAF-Xiaohongshu non-heritage new” special fund in conjunction with the Beijing Contemporary Art Foundation (BCAF), and set up “Xiaohongshu Rural Workshops” for the featured non-heritage villages, linking the strengths of many parties to help non-heritage workshop leaders and young fashion The Little Red Book Rural Workshop was set up for characteristic non-heritage villages, linking multiple forces to help non-heritage workshop leaders and young fashion designers to realize one-to-one pairing, helping to create new non-heritage products on the ground, and realizing two-way flow of resources and value sharing; through diversified support measures, it empowers characteristic non-heritage villages and craftsmen, activates the endogenous dynamics of rural cultural revitalization, and gives full play to the role of the cultural industry in empowering rural revitalization to assist rural cultural revitalization.^[39]

In October 2021, Xiaohongshu received criticism for condoning heavily filtered, stylized photographs and perfectly captured imagery that was becoming increasingly common on the platform's feeds. On 17 October 2021, the platform issued a statement on WeChat to acknowledge that there was a problem of travel influencers posting "overly beautified" photos of scenic spots. According to the statement, Xiaohongshu issued an apology and indicated that because "bloggers did not clearly label their works as creative photography, people interpreted them as part of travel guides. Users who visited the locations were disappointed by the differences between their expectations and reality".^[40][41] Moreover, Xiaohongshu decided to transfer the IPO from the United States to Hong Kong. According to a Bloomberg report in July, this included requiring all companies holding the data of more than 1 million users to submit a cyber security review, which was one of the reasons for the suspension of Xiaohongshu's listing in the United States.^[42]

In December 2021, in response to loss of public trust towards the authenticity of content hosted on its platform, Xiaohongshu formed a dedicated team to identify and remove fraudulent content. A system that uses algorithms and human checks to block falsified content was also implemented. Since then, the platform has banned 81 brands and merchants, deleted 172,600 fake reviews, and disabled 53,600 accounts, according to the company.^[43]

On 19 January 2022, an announcement was made by Xiaohongshu indicating that the company had filed a lawsuit against four companies behind several ghostwriting broker sites in an attempt to restore consumer trust. In an official statement made by Xiaohongshu, the company alleged that the four companies had set up marketplaces for merchants and gig writers to carry out fraudulent practices, including the production of fake reviews and click farming. Xiaohongshu asked for US$1.57 million in compensation for damage to its reputation and the infringement of consumer rights on its platform.^[43][44]

On 25 January 2022, reports emerged that Xiaohongshu has received a fine totaling ¥300,000 from local authorities in Shanghai for failing to remove content that was deemed harmful to minors. The fine relates to a violation of cybersecurity law that guarantees protection for minors after an earlier media report was made by state broadcaster China Central Television (CCTV) in December 2021, that it found videos posted on Xiaohongshu showing underage girls in various states of undress, featured in advertisements for underwear brands.^[45]

In December 2022, the government of Taiwan banned public sector employees from using Xiaohongshu on official devices due to national security concerns.^[46]

• Official website