Xiaohongshu, the Chinese social commerce platform often compared to a mix of Instagram and Pinterest, is aiming to list on the Hong Kong Stock Exchange by the end of the year. The company is seeking a valuation of around $70 billion, according to people familiar with the matter.
Why Hong Kong
Hong Kong has become the listing destination of choice for Chinese tech firms wary of U.S. regulatory scrutiny and delisting risks. A Xiaohongshu IPO there would add to a growing roster of mainland internet companies that have chosen the city, including Meituan and JD.com. The move also aligns with Beijing's push to keep strategic tech assets closer to home.
What a $70 Billion Valuation Says
At $70 billion, Xiaohongshu would be valued nearly as much as some of China's largest listed internet platforms. The figure reflects strong revenue growth and a loyal user base — the app has over 300 million registered users, most of them young women sharing product reviews, travel tips and fashion advice. But it also raises questions about profitability. Xiaohongshu has yet to report a full-year profit, though it has narrowed losses in recent quarters by expanding its e-commerce offerings and advertising business.
Investor Confidence in China's Digital Economy
Despite a broader slowdown in China's economy and a crackdown on tech companies in 2021-2022, investor appetite for high-growth digital platforms appears to be recovering. The Xiaohongshu IPO would be one of the largest tech listings in Hong Kong this year, signaling that global funds still see opportunity in Chinese consumer internet. The company's backers include Alibaba, Tencent and Sequoia Capital China.
The company has yet to file a formal prospectus with the Hong Kong exchange. It is expected to do so in the coming months, with a roadshow likely before the end of the third quarter. A key question is whether the $70 billion target holds — market volatility and geopolitical tensions could force a discount. Xiaohongshu also faces increasing competition from Douyin (TikTok's Chinese version) and Kuaishou, which are both expanding into social commerce.
