China’s Instagram Gets Ready to Go Public

**SPEAKER_1** (0:02)
Bloomberg Audio Studios, podcasts, radio, news.

**K. Oanh Ha** (0:09)
Early last year, I downloaded Xiaohongshu, the Chinese social media app, known internationally as RedNote. Back then, TikTok was about to be banned in the US, and fears that it would shut down for good sent millions of mostly Americans looking for alternatives.
Many of them landed on Xiaohongshu.

**Robert Lea** (0:29)
Hello, everybody.

**SPEAKER_4** (0:31)
We're from TikTok, from America.

**SPEAKER_5** (0:34)
Posting my first video to RedNote as an American TikTok refugee. Hello, everybody.

**K. Oanh Ha** (0:39)
We covered the Xiaohongshu craze on the Big Take Asia at the time. But not long after we reported the story, President Trump announced he would delay the ban on TikTok. He ended up delaying it several times, and most of the Americans who'd migrated from TikTok to Xiaohongshu went right back.
And in January of this year, ByteDance, TikTok's parent company in China, agreed to spin off its US operations, securing TikTok's future in the States.

**SPEAKER_6** (1:07)
TikTok is saved.

**SPEAKER_4** (1:10)
Well, it's official. President Trump just announced a US buyer for TikTok.

**K. Oanh Ha** (1:17)
But the Xiaohongshu app stayed on my phone, and pretty quickly, it became a part of my routine. When I'm not hosting the show, I cover tourism for Bloomberg, and use Xiaohongshu to look for story ideas and even help me plan trips.

**SPEAKER_7** (1:31)
It is day seven out of 10 of my road trip around New Zealand, so I wanted to answer some of the most commonly asked questions.

**K. Oanh Ha** (1:37)
Or work on my tennis game.

**SPEAKER_7** (1:39)
Okay, so today we're going to look at a two-hand, backhand slice. So it's more like this.

**Robert Lea** (1:43)
Xiaohongshu, many people compare it to Instagram or Reddit, but really it's become the de facto search engine for mainly younger people who are looking for travel tips, lifestyle hacks, restaurant recommendations, that sort of thing.

**K. Oanh Ha** (1:58)
Robert Lea leads the coverage of China's tech sector for Bloomberg Intelligence, the company's research arm. He doesn't use the app himself, but he has been tracking its rise.

**Robert Lea** (2:10)
So at the last count, it's got, in fact, probably close to 400 million active users, mainly within the borders of China itself.

**K. Oanh Ha** (2:18)
That's smaller than other Chinese social media apps, like WeChat, which has roughly 1.4 billion users. But Rob says investors are keenly interested in Xiaohongshu because it offers users something different from the competition.

**Robert Lea** (2:33)
It has an authenticity and a much, much lower reliance on these paid KOLs, as they call them in China, or key opinion leaders. These are the influences of China. They've certainly carved out a significant niche from the Chinese social media scene, a sector which is intensely competitive.

**K. Oanh Ha** (2:52)
And now, after more than a decade building its brand, Xiaohongshu wants to turn that niche into a significant market share.

**SPEAKER_6** (3:00)
RedNote, right, Xiaohongshu, said to be preparing for an IPO in Hong Kong by the end of June.

**Robert Lea** (3:07)
Once you've got that captive user base and once they're using it very actively, there is scope to monetize in other avenues. 400 million users is great, but there's significant scope to expand that.

**K. Oanh Ha** (3:19)
One reason Xiaohongshu might be eyeing a listing right now is timing. Hong Kong's IPO market has been on a tear. Companies have raised about $20 billion so far this year, and it's on track to hit a six-year high.
A lot of that momentum is coming from Chinese tech and AI companies hitting the market. But Rob says Xiaohongshu, with its loyal user base and healthy profit margins, could stand out from the pack if it goes public.

**Robert Lea** (3:49)
If you look at the broader China tech sector, it's a sector that's really been plagued by issues of oversupply. We don't have the numbers on Xiaohongshu at the moment, but it's not exposed to any of those negatives. I think this is an IPO, famous last words, which could actually go down really well. It will be a breath of fresh air.

**K. Oanh Ha** (4:10)
This is the Big Take Asia from Bloomberg News. I'm Oanh Ha. Every week, we take you inside some of the world's biggest and most powerful economies, in the markets, tycoons and businesses that drive this ever-shifting region. Today in the show, Xiaohongshu's push to go public. Why now could be the right moment? And what it says about confidence in China's tech sector.
Rob, what is Xiaohongshu and how are people using it?

**Robert Lea** (4:42)
So, the business was founded in 2013, more as a travel recommendation site. Something similar to the along the lines of TripAdvisor as it was. But it's since evolved into, I'd say, China's leading lifestyle-orientated platform with a big influence on travel and lifestyle hacks and recommendations. And it's very well positioned again with this younger predominantly female demographic in China.