Chinese social media sensation Xiaohongshu has seen its growing popularity lead to profits for the first time, as the Instagram-like platform brings in revenues from advertising and a nascent ecommerce business, reports the Financial Times. The Shanghai-based video and photo-sharing app raked in $500 million in net profit last year on revenues of $3.7 billion, according to four people briefed on the figures, which are not public. By contrast, it made a $200 million loss on revenues of about $2 billion in 2022.
The fast-growing social media start-up, which was valued at $20 billion in its last funding round in 2021, has been a rare recent success story in a sector battered by falling valuations and divestments from foreign investors.
Xiaohongshu, which translates to “little red book,” has big-name backers including Alibaba, Tencent, GGV Capital and the former Sequoia China venture capital firm HongShan. It is popular with young Chinese women, who flock to the platform for travel, beauty and lifestyle tips.