News: The Rapid Expansion of Media Conglomerates and the Potential for Market Dominance by RedNote
With the looming ban on TikTok in the United States over concerns about Chinese government influence, an estimated half a million Americans have turned to Xiaohongshu, a Chinese-owned social media platform. Known as RedNote in the West, the app topped Apple's App Store chart on Tuesday and is projected to generate over $1 billion in profits by 2024.
Xiaohongshu boasts over 300 million active users, primarily in China. Their user base grew by 700,000 in just two days this week, as downloads in the U.S. surged over 200% year-on-year (YoY), increasing by 194% from the previous week.
Sustaining global momentum for the app will require swift action, as it currently features a Mandarin-dominant interface, and robust moderation for English-language content must be implemented to cater to its growing American audience. Lemon8, another ByteDance property, currently sits second on the App Store charts.
This shift comes a week after Meta CEO Mark Zuckerberg announced his plans to remake his platforms for the Trump era. The question remains whether this mass migration across the Great Firewall will be a fleeting digital protest or propel Chinese brands to new global heights.
Ed Sander, research editor at Tech Buzz China, clarified that, unlike TikTok, Xiaohongshu is not primarily a platform for sharing humorous videos and dance moves, as users have Douyin and Kuaishou for that. Instead, Xiaohongshu offers content related to product reviews, travel advice, and fashion and beauty tips.
Brands are drawn to Xiaohongshu because it provides unique advertising products tailored to this content-first approach. Influencers, known as Key Opinion Leaders (KOLs), play a significant role, and advertising formats enable businesses to collaborate with these influencers on in-depth product reviews, tutorials, and giveaways, content that feels natural and community-driven.
The platform's ecosystem is designed to smoothly guide users from discovery to transaction without interrupting their experience. Creators can even sell products directly through their content, creating a seamless connection between influencer-led discovery and direct sales.
Xiaohongshu's user-friendly design, focus on authenticity, and community-driven approach have made it a go-to resource for Harriet Pan, a Guangzhou-based brand stratategist at Bandalabs. However, Sander cautioned that Americans should avoid posting TikTok/Douyin-like content on Xiaohongshu, as it would not be appreciated by the predominantly young, affluent, and educated female audience.
This model could have significant implications for the U.S. social commerce market, as Western platforms, like Meta, primarily focus on advertising monetization. In contrast, Chinese platforms like Xiaohongshu diversify into e-commerce, local services, and live streaming entertainment, where users directly tip creators. US and European brands are already active on Xiaohongshu, but necessary preparations should be made before diving in, consider potential restrictions, and certification requirements.
For China, there are concerns that rapid adaptation to suit Western expectations would require significant investment and infrastructure changes and may not align with Xiaohongshu's current focus on profits and a potential IPO in Hong Kong. Cultural clashes further complicate potential expansion, with discussions on LGBTQ+ sentiments and firearms already testing censorship.
Xiaohongshu's rise has introduced many Americans to Chinese super apps for the first time. Despite the success of WeChat and Alipay in Asia, super apps have yet to crack the code on US soil due to strict privacy regulations, antitrust laws, and fears of monopolistic practices. Americans have historically preferred apps that excel at singular functions, but the rise of super-app-like ecosystems signals a shift toward adoption.
Should TikTok go dark on Sunday, U.S. lawmakers may shift their concern to Xiaohongshu over similar security concerns. Whether the hype will continue long enough to warrant this response remains to be seen, but a precedent has been set for policymakers to use these platforms as tools to protect their markets or assert geopolitical dominance. The exchange between users from both countries highlights the increased cross-cultural understanding and camaraderie, offering a sharp contrast to Meta and TikTok, which seem increasingly out of touch with users' priorities.
- The growing number of Americans using Xiaohongshu, a Chinese-owned social media platform also known as RedNote, is estimated to generate over $1 billion in profits by 2024, following TikTok's potential ban in the United States.
- Xiaohongshu primarily offers content related to product reviews, travel advice, and fashion and beauty tips, distinguishing it from TikTok's focus on humorous videos and dance moves.
- Brands are drawn to Xiaohongshu because it provides unique advertising products tailored to its content-first approach, allowing businesses to collaborate with influencers on in-depth product reviews, tutorials, and giveaways.
- Xiaohongshu's user-friendly design, focus on authenticity, and community-driven approach have made it a go-to resource for brands, influencers, and consumers alike.
- Unlike TikTok, Xiaohongshu's predominantly young, affluent, and educated female audience may not appreciate TikTok/Douyin-like content, so American users should approach content creation with caution.
- Should TikTok go dark on Sunday, Xiaohongshu may face similar security concerns from U.S. lawmakers, setting a precedent for policymakers to use these platforms as tools to protect their markets or assert geopolitical dominance.
- The rise of Xiaohongshu has introduced many Americans to Chinese super apps for the first time, signaling a shift toward the adoption of super-app-like ecosystems on US soil, despite strict privacy regulations and antitrust laws.
