Recently, Xiaohongshu released its financial report for the first quarter of this year, reporting revenue of US$1 billion and net profit of US$200 million. Compared with the revenue and net profit of US$600 million and US$40 million in the same period last year, the growth rates were 0.67 times and 4 times, respectively. While achieving double-digit growth in revenue and profit, it was also rumored that its latest valuation exceeded US$17 billion (equivalent to HK$132.6 billion), and it is likely to plan to list on the Hong Kong Stock Exchange.

Think back to three years ago, when its valuation peaked at over US$20 billion. Now, in its 11th year of operation, and with revenue of US$3.7 billion and net profit of US$500 million last year, this new social media platform is likely to continue its rapid growth this year, setting new performance records. With a monthly active user base of 312 million and a compound annual growth rate of 20%, it topped the list of fastest-growing social media platforms in terms of user growth last year, securing multiple rounds of financing and becoming the largest content platform after Alibaba, ByteDance, and Tencent.

Xiaohongshu has risen rapidly with strong momentum, but can it truly become the king of new social networking? Time will tell, and it ultimately depends on whether it can retain users' loyalty.

Evaluating the Necessity of Replacing Tencent QQ and WeChat

Despite the ubiquity of the internet, for those who are familiar with and avid internet users, after trying out various social media tools, they may find that none of the currently available options can truly be considered ideal.

This argument is bound to provoke counterarguments from those who enjoy debating, who may point to the widespread use of Tencent's WeChat and QQ as evidence to the contrary. However, neither Tencent QQ nor WeChat can be considered the most user-friendly social media tool. Moreover, after years of evolution and commercialization, Tencent has evolved into a comprehensive company encompassing communications, gaming, digitization, online advertising, financial technology services, and cloud computing. While some may argue that WeChat is an irreplaceable social tool and the best online communication channel, others may counter that the commercial advertisements embedded in WeChat have become annoying, and making new friends on the platform is increasingly difficult.

Such tools may be Tencent's most profitable revenue streams, but can they truly be considered the most user-friendly social media tools?

As a result, in response to the widespread dissatisfaction with WeChat, many alternatives have emerged, with Xiaohongshu, which has risen rapidly in recent years, undoubtedly being a prominent example.

Unlike other platforms that claim to be social but are primarily focused on monetization, Xiaohongshu was originally a platform for sharing and showcasing content. Users come to Xiaohongshu primarily to share and showcase their lives, with social networking taking a back seat. Paradoxically, this lack of emphasis on social networking has inadvertently led to its success in this area.

The First Decade: Struggling in the Quagmire of E-commerce Competition

In 2016, just eight years ago, Kuaishou and Douyin (TikTok), as well as Bilibili, were primarily focused on short videos, with little foresight or layout for e-commerce and new retail. Meanwhile, Xiaohongshu, which had only been around for two years, positioned itself as a platform for sharing travel experiences and personal life moments. However, as Zhihu and Bilibili successfully completed their IPOs on the stock market, Xiaohongshu recognized the need to expand into e-commerce and new retail. Gradually transforming from a pure content-sharing platform to a hybrid "community + e-commerce" model, Xiaohongshu shifted from simply sharing good finds to addressing users' purchasing needs and fostering a unique cultural community through shopping experiences.

This transition from a pure content-sharing community to a hybrid model witnessed the rise of other short video platforms. In 2020, Xiaohongshu entered the short video market and ventured into live streaming. At the time, it boasted nearly 300 million posts and over 100 million daily searches, with the food category alone attracting 1.3 billion searches and 20 million related posts in a single year.

However, as Xiaohongshu expanded its e-commerce offerings, both its vertical content and commercial attributes exposed it to intense competition in the e-commerce landscape, leading to a sense of being besieged from all sides.

More User-Friendly: The Key to True Success

Unlike Tencent's highly commercialized and advertising-driven approach, which has lost its initial appeal to users, Xiaohongshu, with its lack of overt commercial motives, has maintained its purity over the past decade. Its community atmosphere is perceived as more user-friendly, contributing to a smoother social networking experience.

From another perspective, while platforms like WeChat, Kuaishou, and Douyin often rely on gimmicks and hype in their live streaming offerings, Xiaohongshu focuses on user searches and caters to consumer preferences through recommendation and "seeding" models. By sharing others' experiences and facilitating higher-value choices, Xiaohongshu fosters a sense of community and trust among its users.

By prioritizing user experience over immediate profit, Xiaohongshu has leveraged content marketing to attract and retain a loyal user base that values its cultural identity. This has not only made social networking smoother but also underscores its greatest success and potential for further growth.

For those seeking a quiet and engaging online platform to share and connect with others amidst the overwhelming barrage of live streaming content, Xiaohongshu may be the ideal choice. With a stable user base and a decade-long commitment to its original vision, this "social platform" deserves recognition for both its popularity and commercial value.