The Chinese social network Xiaohongshu Technology Co., which in terms of functional content resembles Instagram in many ways, plans to make a profit this year.
The relevant information was published by the media with reference to insiders who are aware of the financial results of the mentioned virtual platform. In this case, it is separately noted that the social network has benefited from the launch of e-commerce solutions.
According to insiders who used the right of anonymity, Xiaohongshu is approaching a profit of $500 million in 2023. One of the media informants noted that this is an impressive figure, considering that at the beginning of the current year, the company expected to earn less than $50 million.
An impressive profit margin relative to forecasts for the first months of 2023 may contribute to a new round of financing or IPO. The last time the social network raised $500 million was in 2021. At that time, the company was valued at $20 billion.
Xiaohongshu is not required to disclose its finances, which are not subject to audit. A representative of the company did not respond to a media request regarding the expected profit for 2023.
Xiaohongshu’s result is particularly impressive against the background of the experience of Instagram and Pinterest, which took years of hard work to turn huge traffic into revenue from online commerce.
Instagram has faced a serious downturn in the current year. This situation is because the management of the social network has stopped the online shopping function to focus on advertising.
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