Chinese ecommerce startup Xiaohongshu, meaning “Little Red Book”, recently completed an Alibaba-led financing round, raising more than USD300 million with a valuation in excess of USD3 billion, the Shanghai-based company confirmed to our parent 36Kr exclusively Thursday night.
Some of the notable backers include GGV, GSR Ventures, ZhenFund, as well as, interestingly, Tencent which backed Little Red Book’s last C round.
Founded in 2013, Little Red Book began as an overseas shopping tip app, helping overseas travelers to draft a shopping list before their trip – think of Tripadvisor for travelers but with a shopping niche – and has now evolved into a lifestyle app.
Users now can record and share their lives via short videos and graphics, with the community generating billions of posts daily, covering fashion, skin care, makeup, food, travel, film, television, reading and fitness.
The company has more than 100 million users, as of May 2018, with 70% of its users born after 1995 and has even become a platform for prominent artists, idols and sport stars to share their daily lives.
The heated e-commerce space is definitely not without competition against the likes of upstart social ecommerce platforms like Pinduoduo and Meiishuo, another women-focused retailer.
Becoming a lifestyle app also means competing in other turfs, such as with other short video platforms like Douyin, which has been experimenting with online shopping functions within its hyper-popular app, trying to monetize a huge trove of traffic.
Co-founder Miranda Qu, hinted at being open to listing in both domestic and overseas market, and is looking to open its first Shanghai offline store in June, in a Bloomberg TV interview earlier this year.
“When people are spending a lot of time offline, they would want to go out to the real world, being able to touch and feel products and services,’’ she said in the interview.
Despite the recent trade spat between the US and China, the tariffs involve mainly agricultural products, not on lifestyle products such as cosmetics and fashion. The company remains unaffected but has since also diversify to emerging Chinese brands and products.