Will we see ad dollar migration into Xiaohongshu (RedNote) amidst its sudden popularity in the US?

TikTok has resumed operations in the US following a temporary shutdown on Saturday, after the incoming US president Donald Trump pledged to “save TikTok” by delaying the proposed ban. In a statement, TikTok said it is in the process of restoring service in agreement with its service providers.

"We thank president Trump for providing the necessary clarity and assurance to our service providers that they will face no penalties providing TikTok to over 170 million Americans and allowing over seven million small businesses to thrive."

The US Congress passed the law earlier which required the China-based firm ByteDance to sell its stake in TikTok before 19 January 2025 or risk being banned from the US market, with lawmakers citing national security concerns over the Chinese ownership.

Despite the app coming back alive, there was a migration of thousands of TikTokers in the US who were ready to bid farewell to the app. Chinese social platform Xiaohongshu or RedNote saw a spike in users in the US and over the past week, Xiaohongshu has gained over 700,000 new users, according to Reuters.

As of 16 January, the global mentions revolving around “TikTok refugees” were 77.2K, according to media intelligence firm CARMA. The Chinese social platform also saw a surge in brand sentiments after the migration, rising from 28.7% to 33.7% in positive sentiments. Keywords associated with the migration include “refugees”, “RedNote”, “Instagram”, "propaganda”, “banned”, amongst others.

A check by MARKETING-INTERACTIVE saw Xiaohongshu has changed its interface language to English and is reportedly hiring English content moderators to ensure the content aligns with the platform guidelines. On the other hand, veteran Chinese users were extremely welcoming, teaching the new joiners how to navigate the platform.

Over the past week, the exodus definitely sparked an unprecedented cultural exchange, bringing together two digital worlds that have been largely separated for years. On the marketing front, industry players MARKETING-INTERACTIVE spoke to said that marketers in Asia could also benefit from the unforeseen migration.

How marketers in Asia can benefit from the trend

As Xiaohongshu’s focus on lifestyle and visual content aligns perfectly with cosmopolitan markets such as Singapore and Hong Kong, marketers in the region can gain early-mover advantages on the platform by establishing a strong presence before competition intensifies globally, according to Sunny Johar, managing director and head of digital strategy at KRDS.

In fact, Xiaohongshu has gained traction in Hong Kong in recent years, with a significant 50% YOY growth in daily active users, reaching 1.13 million users in 2023. Recently, the platform has also set up an office in the city.

For Asia-based marketers, Xiaohongshu has the potential to redefine marketing outside China by prioritising niche, high-quality content and blending social media with seamless eCommerce, added Johar. 

“It rewards creators who build trust within engaged communities and adapt to its curated, storytelling-driven approach, offering new opportunities for cross-border influence. While TikTok has shopping features such as TikTok Shop, its primary focus remains on entertainment, and its eCommerce ecosystem is still maturing compared to Xiaohongshu’s integration.”

Xiaohongshu’s sudden rise as the go-to alternative gives Asian brands a platform they may already be familiar with to reach a global audience, said Kristian Olsen, managing director, Type A Digital. “It’s not often you get a chance to play in your region and expand internationally at the same time.”

Xiaohongshu is built for the kind of content that works here - social media with strong eCommerce hooks, added Olsen. “People here are already deeply entrenched with platforms that combine entertainment with shopping, so the idea of the platform being 'big in the US' will only make it more appealing.”

Even if brands already have an established overseas presence, this presents a golden opportunity to translate awareness into purchases, said Jessica Zhang, CEO, Starcom China.

In addition, Chinese brands which are popular and successful with international audiences also add to the brand’s credibility in China, drawing more attention from Chinese consumers when sometimes the brands become symbols of national pride.

Will we see more ad dollars moving into Xiaohongshu?

With the influx of Americans flocking to the Chinese platform, Xiaohongshu has surged as the top downloaded app in the US, followed by its sister app Lemon8, said a report on Reuters.  On the marketing front, brands exploring alternatives to TikTok may consider allocating budgets to Xiaohongshu, however, Meta and Google remain well-established platforms with extensive advertising networks and targeting capabilities.

According to GroupM’s End-of-Year Global Advertising Forecast 2024, the global advertising industry is poised to surpass US$1 trillion in total revenue for the first time in 2024 and grow another 7.7% in 2025 to reach US$1.1 trillion. While some funds may transition to Xiaohongshu, a significant portion is likely to stay with larger platforms such as Meta and Google, unless Xiaohongshu can demonstrate robust engagement and ROI, according to Vin Ng, director, Spread-it.

Nonetheless, Xiaohongshu has the potential for lifestyle and trend-driven advertisers but lacks mature ad infrastructure, said Florence Kong, founder and managing director, We Glow Hong Kong. She added:

Until user engagement and ad tools stabilise, most marketers will cautiously experiment rather than commit significant budgets to Xiaohongshu.

KRDS' Johar said a direct transfer of advertising dollars would be unlikely in the short-term as the focus of the two platforms is currently intrinsically different and the advertising options are not directly comparable. The biggest differences between Xiaohongshu and TikTok algorithms for brands revolve around their focus, user experience, and advertising approach, she said, adding:

“Xiaohongshu provides native ad options such as in-feed posts and branded accounts, which blend more seamlessly with organic content. It leans heavily on visual aesthetics and user-generated content, unlike TikTok ads which do not necessarily always blend with the content.”

The real question is whether Xiaohongshu can tie their engagement to measurable results. said Olsen. He added:

If they lock that in, they’ll pull dollars away from everyone else - not just TikTok’s leftovers.

Nevertheless, each and every platform is designed and built differently and is not an apples-to-apples substitute, as such, it remains challenging to anticipate how advertising budgets and expenditures will shift, said Kate Kwan, managing director, TEAM LEWIS GCR. “TikTok is heavily filled with video content, so it would be prudent for marketers to keep a close watch on whether and how Xiaohongshu will leverage this opportunity to enhance the user experience for commercial purposes in the US, especially its video publishing related features,” she added.

While it’s still early to tell whether the ad dollars for TikTok will move into Xiaohongshu, Starcom China’s Zhang said marketers will definitely be monitoring the trend and observing how their customers interact with this platform before they allocate their funds. “Similarly, we also expect other platforms to up their game, and this will translate to more choices and opportunities for brands and marketers.”

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