Xiaohongshu Builds Local Services Stack

This move matters because it turns Xiaohongshu from a place where demand is created into a place where demand is captured. Historically, users found a café, restaurant, hotel, or activity in notes and then finished the transaction on Meituan, Dianping, or another app. The new local services stack closes that loop inside Xiaohongshu through POI entry points, mini programs, and merchant tools, which gives it a way to take a cut of bookings instead of stopping at ad revenue.1 2 3 4 5

• The product change is concrete. Xiaohongshu now has a local life merchant platform and mini program infrastructure with POI service entry, which means a user can move from nearby content or a place page into a service detail page and pay inside the app instead of jumping out to a static store page or an external marketplace.2 3
• The competitive target is clear. Meituan built a huge local services business by starting with high frequency food demand, then cross selling into higher margin hotel, travel, and in store services. That playbook works because once a platform owns discovery, merchant onboarding, and checkout, it can sell traffic and software to merchants, not just consumer leads.4 5
• This also fits Xiaohongshu's broader monetization problem. With 300M monthly active users and an estimated $4.8B of 2024 revenue, the business still leans heavily on advertising and often loses the final transaction to Taobao, Tmall, or local service apps. Local services gives it a second monetization rail tied directly to intent rich searches and nearby recommendations.1 4

From here, the upside is less about adding one more category and more about building a full local demand engine. If Xiaohongshu can get merchants to manage offers, inventory, and booking flows inside its system, restaurant, travel, and lifestyle spending can compound the same way product commerce did, with search, content, merchant tools, and checkout all reinforcing each other.2 4 5