The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
Chinese social media platform Xiaohongshu has completed a new round of funding, led by existing shareholders Temesek and Tencent, with contributions from Alibaba and others.
“The current round of financing mainly stems from existing shareholders who increased their stakes in the company,” a spokesperson for Xiaohongshu said.
Though the company was not able to disclose the financial details of the new funding, a person with knowledge of the deal confirmed to BoF that the round raised $500 million in new capital, bringing Xiaohongshu’s valuation to $20 billion.
The platform has become and increasingly vital avenue for fashion and beauty brands to reach China’s Millennial and Gen-Z population, young women in particular, who make up an estimated 70 percent of Xiaohongshu’s audience. They frequent the platform for advice, to discover new trends and products and for lifestyle inspiration across a multitude of categories.
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On any given weekend, Shanghai’s Wukang Road, located in the heart of the city’s former French Concession, will heave with locals and visitors in their most stylish outfits. Street style photographers working for dedicated social media accounts on Xiaohongshu frequent the historic street searching for subjects.
The French beauty giant’s two latest deals are part of a wider M&A push by global players to capture a larger slice of the China market, targeting buzzy high-end brands that offer products with distinctive Chinese elements.
Post-Covid spend by US tourists in Europe has surged past 2019 levels. Chinese travellers, by contrast, have largely favoured domestic and regional destinations like Hong Kong, Singapore and Japan.
While travel to Europe remains muted, Chinese shoppers are flocking to Singapore, Thailand and other Southeast Asian destinations where fashion retailers are hoping Lunar New Year marketing investments will pay off.
Local fashion designers experimenting with puffers and other down clothing have scored collaborations with outerwear companies like Moncler and attracted the attention of prominent international retailers like H.Lorenzo.