Beijing, February 17, 2024 – Recent reports suggesting that popular Chinese social media and e-commerce platform Xiaohongshu (also known as Red) is set to introduce state-owned shareholders to facilitate its future IPO have been refuted by sources familiar with the matter. The denial comes amidst a flurry of activity for the platform, including a recent influx of TikTok users and reported plans for a Hong Kong office.
Earlier today, Bloomberg reported that Xiaohongshu was considering bringing in state-backed investors to smooth its path toward a potential public listing. However, according to 36Kr, a well-known Chinese tech news outlet, insiders have dismissed these claims as untrue.
The news arrives after a busy period for Xiaohongshu. Last month, the platform experienced a surge in new users from TikTok, who, facing uncertainty surrounding the app’s future in the US, jokingly referred to themselves as TikTok refugees. In response, Xiaohongshu swiftly launched both Chinese-English translation features and an official English name, rednote (all lowercase).
However, data from digital market intelligence firm Similarweb indicated a subsequent decline in Xiaohongshu’s US usage, coinciding with the suspension of the sell-or-be-banned threat hanging over TikTok. This suggests that the initial surge of TikTok users may have been temporary, with many returning to the original platform after the immediate threat subsided.
Despite the fluctuations in the US market, Xiaohongshu appears to be focusing on expansion within Asia. Reports this month indicate that the company is in negotiations to lease approximately 7,000 square feet of office space in Hong Kong’s Times Square in Causeway Bay, at a reported rental rate of HKD 40 per square foot.
Xiaohongshu is in talks to lease a high-level unit in Times Square, Causeway Bay, with Jones Lang LaSalle handling the deal, a source familiar with the matter told local media. The lease is expected to be finalized soon, and the establishment of a Hong Kong office will be beneficial for expanding Xiaohongshu’s business in the region.
Notably, the Times Square location would place Xiaohongshu in close proximity to Alibaba’s Hong Kong offices, potentially fostering collaboration and competition within the region’s burgeoning tech landscape.
While the rumors of state-owned investment remain unconfirmed, Xiaohongshu’s recent activities suggest a company focused on growth and adaptation, navigating the complexities of the global social media market while solidifying its position in key Asian territories. The platform’s future trajectory remains to be seen, but its recent moves indicate a continued commitment to innovation and expansion.
References:
- IT之家 (ITHouse). (2024, February 17). 消息称小红书引入“国资股东”，知情人士回应称“不实” [Rumors of Xiaohongshu introducing state-owned shareholders denied by insiders]. Retrieved from [Insert ITHouse Article URL Here]
- Bloomberg Report on Xiaohongshu (If Available, Cite Directly)
- 36Kr Report on Xiaohongshu (If Available, Cite Directly)
- Similarweb Data on Xiaohongshu (If Available, Cite Directly)
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