According to four well-informed sources cited by the Financial Times, Chinese mainland social media platform Xiaohongshu generated revenues of $3.7 billion and a net profit of $500 million in 2023, marking its first profitable year. Xiaohongshu had revenues of around $2 billion in 2022 but suffered losses of approximately $200 million.
Despite the prevalent trend of declining valuations and investor withdrawals in the social media sector, Xiaohongshu experienced breakthrough growth in 2023. It reached a valuation of $20 billion in its latest funding round in 2021. Key investors in Xiaohongshu include industry giants such as Alibaba, Tencent, GGV Capital, and the former Sequoia China venture capital firm, Sequoia.
Founded in 2013 by Mao Wenchao and Qu Fang, Xiaohongshu is a lifestyle platform for young people. Its mission is to “Inspire Lives” by sharing and discovering the wonders of the world. Users can document their daily lives through short videos, images, and other formats, share lifestyle insights, and engage with others based on mutual interests.
According to data disclosed to investors, Xiaohongshu experienced substantial growth in 2023, reaching 312 million monthly active users, marking a 20 percent surge compared to the previous year. This growth trajectory positions Xiaohongshu as the fastest-expanding major social media platform in China during that period, based on calculations by the Financial Times.
In December last year, rumors were suggesting that Xiaohongshu might initiate a Hong Kong IPO in the second half of 2024. However, Xiaohongshu has denied these reports.
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