Every day, Chinese tourists visiting Hong Kong gather around a humble street sign on the western side of Hong Kong Island. The sign isn’t remarkable, yet it stands in front of a spectacular view of Victoria Harbor and the Kowloon Peninsula.They’re all here because of Xiaohongshu, the Chinese social media app. Posts give a step-by-step guide on how to find the neighborhood’s best stores, cafés, and photo spots. Users follow along, even if they aren’t always sure why.Garrison Cheung, a tourist from Shenzhen, is taking photos of his friend standing under a street sign in Kennedy Town. He admits he has “no idea” why the spot is popular: “It’s just on Xiaohongshu.”Founded by Miranda Qu and Charlwin Mao in Shanghai just over a decade ago, Xiaohongshu is now a repository for advice on the best places to visit, the best food to eat, and the best things to buy. Analysts and marketing experts all agree it’s the platform for any brand, local or foreign, trying to capture the attention of China’s experience-hungry, bargain-hunting, work-jaded young. Xiaohongshu claims 300 million monthly active users, primarily in mainland China. Almost three-quarters of its users are female, and half its users were born after 1995. While Xiaohongshu translates to “Little Red Book,” it bears no relation to the famed book of quotations by Mao Zedong.“People say: ‘When in doubt, turn to Xiaohongshu,’” says Ashley Dudarenok, founder of ChoZan, a digital consulting firm based in Hong Kong and Shenzhen.It’s become common shorthand to refer to Xiaohongshu as China’s version of Instagram, but the platform is really a mélange of different social media companies. It embodies Instagram’s focus on photography, Pinterest’s e-commerce trappings, Tripadvisor’s reviews, and X’s edgy slang and buzzy memes.People attend the live concert during the 2024 Shanghai Summer Xiaohongshu Street Lifestyle Festival by the Huangpu River on August 31, 2024 in Shanghai, China.Hugo Hu—Getty ImagesXiaohongshu doesn’t invent trends, Dudarenok says, “but they see what people are talking about, they single it out, and they make it big.”Qu, the app’s cofounder, appreciates all the slang launched on Xiaohongshu, but she prefers a different term: tingquan, or “listening to advice,” which she says “encapsulates Xiaohongshu quite well.” In an email interview, Qu says the term embodies the community spirit of Xiaohongshu, whether it’s a user seeking advice or “shop owners asking for suggestions on how to attract more customers.”Xiaohongshu’s focus on personal experiences and advice helps make content “original, authentic, and trustworthy,” says Fine Leung, an associate professor of marketing at Hong Kong Polytechnic University. “In China, this element of trust matters a lot.”Qu, ranked No. 60 on the Fortune Most Powerful Women Asia list, now serves as Xiaohongshu’s president, where she looks after the startup’s management and business partnerships. Qu, 39, grew up in Wuhan, like cofounder Charlwin Mao. She studied journalism at Beijing Foreign Studies University, before going on to work in marketing.People attend the Roadside Fair during the 2024 Shanghai Summer-Xiaohongshu Street Lifestyle Festival by the Huangpu River on August 31, 2024 in Shanghai, ChinaHugo Hu—Getty ImagesMao and Qu met in the U.S. and bonded over their shared hometown. They launched Xiaohongshu in 2013, which at these very early stages wasn’t an app at all, but a set of shopping guides, in PDF format, for Chinese shoppers looking to buy products overseas. “Xiaohongshu” gets its name from this bundle of PDFs, and not the book of Chairman Mao’s quotations.An app to help users buy products not easily available in China followed a year later. But the founders soon realized the recommendation algorithm they’d developed was more valuable. The app quickly pivoted to contributions from users.Xiaohongshu’s focus on user-generated content led to some growing pains. The platform struggled with fake accounts, missing disclosures of sponsored posts, and sellers engaging in illegal and unlicensed activity. In 2019, Xiaohongshu disappeared from Chinese app stores for two months owing to what the company called a “comprehensive investigation and rectification of content.”Xiaohongshu earned $500 million in profit in 2023, up from a $200 million loss the year before, as brands turned to the now more upmarket platform, the Financial Times reported. The same outlet said a recent funding round valued the company at $17 billion.Xiaohongshu’s duck mascot floats in the city’s Huangpu RiverCourtesy of XiaohongshuThe shift to experiences like those promoted on Xiaohongshu is already transforming travel destinations like Hong Kong, popular with mainland Chinese tourists. The city’s retail sales have plummeted as visitors trade luxury stores for sights and snacks, like a photogenic footbridge or a social media-friendly egg tart.Not everyone is thrilled about the glut of foot traffic generated by the app. The University of Hong Kong briefly imposed crowd control measures to manage a flood of visitors taking Xiaohongshu photos at the school.But the engine of social media and trends can’t be stopped. “The moment they get eyeballs, people start creating even more user-generated content,” Dudarenok says. “And then the whole of China is brainwashed.”This article appears in the October/November 2024: Asia issue of Fortune with the headline “Where to find China’s youth.”More from the October/November issue of Fortune:–See who made the 2024 Fortune Most Powerful Women Asia list–Meet Martha Sazon, who leads the Philippines-based finance superapp GCash–How Singapore’s Jenny Lee wants to rethink venture capital–Women in Asia are reaching the top of the corporate world
