‘China’s Instagram’ targets male users as RedNote readies for IPO

{"text":[[{"start":11.85,"text":"China’s answer to Instagram is betting on male users to fuel its next stage of growth as it prepares for the biggest initial public offering of a Chinese internet company in five years."}],[{"start":24.049999999999997,"text":"Xiaohongshu, known internationally as RedNote, is working with lawyers, investment banks and executive search companies as it accelerates plans for a Hong Kong listing, according to multiple people familiar with the preparations."}],[{"start":39.75,"text":"If it wins approval from Beijing’s securities regulator, it would be the first major IPO of a Chinese internet company since ride-hailing app DiDi went public in 2021."}],[{"start":50.5,"text":"Xiaohongshu, founded in 2013, has become one of China’s most valuable consumer internet businesses by catering to young women in affluent cities. In recent years, it has sought to attract more male users as it hits the limits of growth in its core demographic."}],[{"start":66.2,"text":"The app is used to share recommendations for beauty products, fashion and travel, making it indispensable for brands targeting high-spending consumers. This has allowed it to command some of the highest advertising rates within Chinese social media."}],[{"start":80.75,"text":"In a private stake sale managed by the company in 2024, Xiaohongshu was valued at $17bn, though share prices on private markets have soared since."}],[{"start":null,"text":"

"}],[{"start":91.7,"text":"Ahead of its potential listing, the Shanghai-based group has been recruiting international executives to join its board and strengthen its governance credentials, according to an executive approached by headhunters. Goldman Sachs had been hired to lead the offering, said two people."}],[{"start":106.75,"text":"Bloomberg and Reuters previously reported aspects of the company’s listing plans. Xiaohongshu did not respond to a request for comment."}],[{"start":114.25,"text":"Xiaohongshu turned profitable in 2023, the FT reported at the time, and has seen its revenues and profits grow rapidly since, with the majority of its money coming from advertising."}],[{"start":125.65,"text":"It has sought to add an ecommerce feature but struggled to gain significant market share against Alibaba-owned Taobao and Douyin, China’s version of TikTok, making only a fraction of those apps’ sales."}],[{"start":138.1,"text":"A member of Xiaohongshu’s ecommerce team said many merchants offered lower prices on Taobao and refused to cut them for the same products on Xiaohongshu because the app lacked Taobao’s scale. Even so, it has become a critical platform for brands seeking to reach new buyers."}],[{"start":153.54999999999998,"text":"“Shoppers get inspired on Xiaohongshu, then later buy on Taobao,” said Olivia Plotnick, founder of Shanghai-based marketing company Wai Social. “It prioritises high-quality and aesthetic content and is a critical platform for brands to build credibility and influence consumer choice before purchase.”"}],[{"start":173.2,"text":"In 2020, Xiaohongshu initiated a strategy to reach beyond women, who then accounted for about 90 per cent of its users. It began promoting content creators focused on topics popular with men, such as cars and watches."}],[{"start":188.45,"text":"In 2024, it enlisted French footballer Kylian Mbappé as a spokesperson and this year secured the rights to stream the Fifa World Cup in China."}],[{"start":198.64999999999998,"text":"Ceng, a programmer in his thirties, said he went to Xiaohongshu for content on finance, football and gaming. “The only app I use more is WeChat,” he said, referring to Tencent’s ubiquitous messaging and payments app."}],[{"start":211.95,"text":"A person familiar with the business model noted Xiaohongshu had decided to target male users rather than increase its female audience in less affluent cities, where the app is not widely used."}],[{"start":222.14999999999998,"text":"Xiaohongshu has 350mn monthly active users, with 60 per cent living in so-called first-tier and emerging first-tier cities such as Beijing, Shanghai and Hangzhou, according to data provider Qiangua."}],[{"start":235.84999999999997,"text":"Douyin and Kuaishou, which have about twice as many monthly active users, are the dominant short-video platforms in lower-tier cities."}],[{"start":243.99999999999997,"text":"“These cities are less attractive to advertisers, so Xiaohongshu would get less revenue per user,” said the person."}],[{"start":251.19999999999996,"text":"Men now make up 26 per cent of users, according to Qiangua. One investor in the company said the World Cup could increase the app’s male base, but “the question is whether those users will still be there once the tournament ends”."}],[{"start":266.69999999999993,"text":"Zhou, a 30-year-old from the affluent coastal province of Zhejiang, said he had installed Xiaohongshu to watch the World Cup but then deleted it, preferring to view matches on state broadcaster CCTV. He added that Xiaohongshu still suffered from the stereotype of being a women’s app."}],[{"start":285.44999999999993,"text":"The IPO had yet to receive approval from Chinese regulators, said people familiar with the process. Authorities have tightened scrutiny of overseas listings, including in Hong Kong, over national security concerns related to cross-border data and technology transfers."}],[{"start":303.3999999999999,"text":"But if Xiaohongshu pulls off a listing, investors said it would signal greater openness from regulators to internet IPOs, including that of TikTok owner ByteDance."}],[{"start":321.79999999999995,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1782978905_8337.mp3"}