The uncertainty surrounding TikTok’s future in the United States has driven millions of American users toward Chinese-made social apps, such as Xiaohongshu (now known in the U.S. as RedNote). This shift has provided a new customer base for Chinese consumer companies, propelling their stocks to significant gains.
After the U.S. Supreme Court indicated that it was likely to uphold a law banning TikTok, more than 2 million users flocked to RedNote within just two days. This surge in users has lifted the fortunes of Chinese companies like Hangzhou Onechance Tech Corp. and Yantai China Pet Foods Co., which have seen their shares rise as investors anticipate increased demand for Chinese goods and services.
“This phenomenon certainly has lifted sentiment for many investors,” said Chen Shi, a fund manager at Shanghai Jade Stone Investment Management Co. “The cross-border discussions show that Chinese goods do have appeal and are competitive in the eyes of the US consumer.”
RedNote, often compared to Instagram, became the most-downloaded free app on Apple Inc.’s iPhone download charts and surged into the top 10 on Google Play. Although TikTok’s service was restored in the U.S. after a brief shutdown, following President Trump’s delay of a national security law and extension for ByteDance to find a buyer, the rise of RedNote reflects a growing trend.
Stocks like Hangzhou Onechance Tech, which specializes in digital marketing, surged over 70% following speculation that Chinese companies would increase their social media exposure on RedNote or ramp up content for English-speaking users. Similarly, Yantai China Pet Foods saw its stock spike by as much as 25% over three days, as new U.S. users were encouraged to share pet photos in a fun “cat tax” challenge.
The rapid rise of Xiaohongshu has caught the attention of analysts, with some predicting that American users, if they stay on the platform, could boost the app’s ecosystem and benefit Chinese brands and companies involved in cross-border e-commerce, marketing, and international expansion. Zhao Zhongping, an analyst at Sinolink Securities, noted that U.S. users would likely contribute to the platform’s broader influence and growth.
Despite the uncertainty surrounding TikTok’s fate, with its parent company ByteDance still weighing whether to sell or face a shutdown, the increasing popularity of Xiaohongshu signals a potential shift in how U.S. consumers engage with Chinese social apps.
Additionally, companies like Duolingo, a language-learning app, have also benefited from the trend. The app reported a 216% spike in U.S. users studying Mandarin, boosting its stock by more than 10% in three days. Similarly, Chinese tourism stocks saw gains from an uptick in searches for flights and hotels to China, with China Tourism and Culture Investment Group Co. reaching its 10% daily limit for the fourth consecutive day.
As the landscape for social media apps evolves, the growing influence of Chinese platforms like Xiaohongshu may continue to shape market dynamics, offering new opportunities for Chinese companies in global markets.
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