Discovery on Xiaohongshu, Checkout on Alibaba
$4.8B/yr Instagram of China
This shows that Xiaohongshu still works more like the top of the shopping funnel than the cash register. Users go there to see a creator test a lipstick, compare outfits, or save a skin care routine, then jump to Taobao or Tmall where the merchant already has inventory, payments, customer service, and years of purchase history set up. That keeps Xiaohongshu highly valuable to brands, but pushes more of its monetization toward ads than marketplace take rate.
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Alibaba said in May 2025 that Taobao and Tmall deepened their partnership with Xiaohongshu so merchants could place direct links from Xiaohongshu content to Taobao and Tmall storefronts. That is a strong signal that Xiaohongshu was already a major discovery surface, while Alibaba remained the main checkout layer.
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The workflow split is practical. Xiaohongshu is where users browse notes, watch short videos, and search for real product reviews. Taobao and Tmall are where merchants handle payment, logistics, refunds, and repeat purchase. In other words, inspiration lives on Xiaohongshu, operations live on Alibaba.
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This is the clearest contrast with Douyin. Douyin has pushed much harder to keep shopping inside the app and built a far larger commerce engine, while Xiaohongshu has remained more ad heavy. That makes Xiaohongshu look less like a closed marketplace and more like a high intent media channel for brands.
The next step is tighter conversion plumbing, not a full rebuild of commerce from scratch. As Xiaohongshu adds more outbound links, merchant tools, and search intent, it can capture more ad spend and maybe more transaction revenue over time, while still leaning on Taobao and Tmall for the hard parts of ecommerce execution.