According to the Financial Times, Xiaohongshu has achieved its first-ever profit, driven by soaring popularity and diverse revenue streams. The Shanghai-based app recorded a net profit of $500 million on revenue of $3.7 billion last year, marking a significant turnaround from a $200 million loss in 2022. Backed by investors like Alibaba and Tencent, Xiaohongshu appeals mainly to young female users seeking lifestyle and beauty content. While advertising remains its primary revenue source, the platform is expanding its e-commerce offerings, notably through influencer-led livestreaming sales. Concerns persist about its future trajectory, particularly regarding the lack of a clear path to an initial public offering. Nevertheless, Xiaohongshu’s focus on quality and its ability to attract affluent consumers in urban centers make it an appealing platform for brands.