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.[20][21] In 2015, Xiaohongshu set up its warehouses in Shenzhen, Guangdong and Zhengzhou, Henan.[22]
On 6 June 2017, Xiaohongshu held a shopping festival to celebrate its fourth anniversary, which saw the sales revenue exceed CN¥100 million in two hours, while the app ranked in first place in the iOS App Store under the "Shopping" category that day.[23]
In June 2018, the Alibaba Group and Tencent invested US$300 million in Xiaohongshu, with a valuation of US$3 billion.[24]
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.[25][26] The app had attracted affluent Gen Z female users in urban China as an alternative to Instagram, which is blocked in the country.[27] 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.[28][29] By 2022, 30% of Xiaohongshu users were male. There was criticism that the strategy, as well as Xiaohongshu's algorithm, increased harassment on the platform and made women feel less welcome. An external advertising agency marketed Xiaohongshu on other websites as a place to see "Beautiful ladies... without spending any money!" and "Sexy, beautiful car models and stylish beauties", which the company later apologized for.[26]
In 2023, Sequoia China bought the Xiaohongshu shares in multiple transactions at a valuation of $14 billion.[30]
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.[31] 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.[32] In January 2025, the banning of TikTok in the US caused many US users to look for a TikTok alternative,[33] which led to a significant increase in Xiaohongshu downloads. It was the most-downloaded free app in the App Store on 14 January and #TikTokRefugee became a trending topic, referring to former TikTok users as "refugees".[34][35][36] Reactions to the influx of American users were mixed in China, as state broadcaster China Central Television (CCTV) supported the influx[37][38] while some Chinese nationalist bloggers warned against American influence.[39] As Xiaohongshu focuses on lifestyle topics, the ecosystem has given it a growing advantage in competition with traditional Chinese search engines, making it a new generation search engine and earning it the reputation of "National Lifestyle Guide".[43] Xiaohongshu recorded almost 600 million daily search queries in Q4 2024, reportedly half that of Baidu and doubled over the past year.[44]
In January 2025, Xiaohongshu is introducing Diandian, an AI-powered search tool, which is currently in beta testing.[45