Xiaohongshu Restructures Business Map, Betting on Overseas Expansion and AI

[Ebrun Original] Xiaohongshu is entering a new phase.

Over the past few months, this 13-year-old content platform has frequently been in the spotlight, securing a World Cup content partnership, surpassing 400 million monthly active users. In the capital markets, Xiaohongshu's valuation has been steadily rising, accompanied by intensifying rumors of an IPO.

Last month, media reports indicated that Xiaohongshu had hired institutions such as Goldman Sachs and China International Capital Corporation (CICC) to advise on a potential Hong Kong listing, which could happen as early as the second half of 2026.

Although Xiaohongshu has not yet officially responded to the listing rumors, and the specific timing, fundraising scale, and valuation remain undetermined, the platform's recent moves suggest it is already repositioning itself for the next stage.

Recently, Xiaohongshu issued an all-staff internal letter announcing a new round of organizational upgrades.

In this adjustment, Conan was appointed as President, overseeing the three core businesses of community, e-commerce, and commercialization, as well as the company's technology system. Commercial advertising and e-commerce transactions were merged into a "Big Commerce" unit. Simultaneously, Xiaohongshu formally established an overseas business department, Rednote, and incorporated the AI-first department Dots and the Enterprise Intelligence department into the organizational structure.

After this adjustment, Xiaohongshu's business map can be roughly divided into two lines: one is the core community and commerce fundamentals overseen by Conan, and the other is directly focused on future growth drivers: overseas expansion, AI, and new product incubation.

01

Conan Promoted to President, Xiaohongshu Restructures Core Fundamentals

The most significant personnel change in this adjustment is the promotion of former COO Conan to President.

According to the internal letter, Conan will fully integrate the three major businesses of community, e-commerce, and commercialization, along with the company's technology system, responsible for the core business operations of Xiaohongshu, reporting to CEO Seiya.

This means that Xiaohongshu's user growth, content ecosystem, advertising revenue, e-commerce transactions, and technological capabilities have been explicitly placed under a unified operational and management system for the first time.

Conan joined Xiaohongshu in 2015, initially focusing on community operations. Starting in 2022, Conan began overseeing the product and technology aspects of the e-commerce and commercialization sectors and concurrently served as head of the platform transaction department in 2023. Since then, she has been overseeing the "Big Commerce" unit, comprising commercial advertising and e-commerce transactions.

In 2024, the platform defined Xiaohongshu e-commerce as "lifestyle e-commerce" for the first time. Under this commercial approach, Xiaohongshu further integrated community and commerce, facilitating transactions based on the lifestyle experiences, user relationships, and consumer decision-making pathways already established within the community.

Now, with Conan taking over community, commercialization, e-commerce, and the technology system, this approach may transition from a single business proposition to the company's overall operational level.

Concurrently, Xiaohongshu has also redefined the division of responsibilities for the core businesses under Conan's management.

The previously established "Big Commerce" unit has clarified its authority and responsibilities. CMO Zhiheng has been appointed head of Big Commerce, uniformly responsible for advertising commercialization and e-commerce transaction businesses, and accountable for the healthy development and revenue of the commercial sector. Paru serves as the Community Head, responsible for community user experience, user scale, and ecosystem health. Xiahou serves as the Algorithm Head, overall responsible for the company's core business algorithms.

02

Formal Establishment of the Overseas Business Department Rednote

Another noteworthy change is the formal establishment of Xiaohongshu's overseas business department, Rednote, initiating the exploration of international business from scratch.

The internal letter indicates that Rednote will report directly to CEO Seiya.

In fact, even before the establishment of an independent department, Xiaohongshu had conducted a series of tests around cross-border business.

In early 2025, influenced by policy changes affecting TikTok in the US market, a large number of US users, self-identifying as "TikTok refugees," flocked to Xiaohongshu. Within just two days, the platform gained approximately 700,000 new US users and briefly topped the US App Store download charts.

After the traffic surge, Xiaohongshu began attempting to move the transaction component overseas.

In March 2025, Xiaohongshu launched the "E-commerce Overseas Navigation Program," initially covering the United States, Hong Kong China, and Macao China, and opening access to selected merchants. The platform provides participating merchants with services such as online transactions, trade export, cross-border payments, and localized operations, attempting to establish a complete process from content display, in-platform transactions to cross-border fulfillment.

Subsequently, Ebrun learned in April this year that Xiaohongshu formally established a cross-border e-commerce business unit, Redshop, which launched in June this year. Gintoki, previously responsible for the platform's domestic e-commerce and live-streaming sectors, oversees the development of this business.

The formal establishment of the Rednote department now further consolidates the previously scattered explorations in overseas community operations, user growth, and cross-border e-commerce into a unified international business framework.

Although the internal letter did not announce the head of Rednote, the fact that its cross-border e-commerce unit, Redshop, is led by Gintoki, who has extensive experience in building e-commerce from scratch, at least indicates that e-commerce will be a crucial component for Rednote to validate a closed-loop overseas business model.

03

AI Transitions from Point Applications to a First-Level Department

AI is another main line Xiaohongshu is betting on.

According to the internal letter, Xiaohongshu established Dots, a first-level department with AI at its core, reporting to Conan. This department plans to build a complete technology system from model R&D, infrastructure, engineering to products, integrating top AI talent and resources.

This means AI will be elevated to a first-level department that can directly connect with Xiaohongshu's core businesses, rather than remaining just technical projects scattered across algorithm, search, or product teams.

Currently, Xiaohongshu has applied AI to multiple areas including search, content understanding, creation assistance, and community governance.

A relatively distinct product is the AI lifestyle search assistant "Diandian." Diandian operates both as a standalone app and is being tested within the main Xiaohongshu app. Users can ask questions via text, voice, or images to obtain lifestyle information such as travel guides, shopping decisions, outfit recommendations, and store reviews, or have it summarize graphic and video notes within the platform. Compared to general-purpose Q&A products, Diandian's main characteristic is its ability to reference notes, comments, and user experiences within the Xiaohongshu platform to summarize and organize community content.

On the content production side, Xiaohongshu already provides generative capabilities such as AI dialogue, text-to-image, and image-to-image generation, and uses AI for copy polishing, formatting, and content template generation. The platform's Generative AI Service Agreement shows its AI services cover functions like dialogue, image generation, and image editing.

However, most existing applications are still point capabilities scattered across search, creation, and other areas. After Dots is elevated to a first-level department, it remains to be seen whether Xiaohongshu can leverage large language models to connect these capabilities into a complete system capable of understanding the relationships between user search intent, notes, comments, and products, potentially further changing the way and efficiency with which the platform connects content, users, and commercial supply.

In addition to Dots, Xiaohongshu also established an Enterprise Intelligence Department, integrating the original Enterprise Efficiency Department and Data Science Department, and collaborating with the Strategy Department and Organizational & Personnel Department to transform the internal organization across dimensions of intelligence, talent, data, and resources.

The two departments correspond to different directions: Dots focuses on models, engineering, and products, while the Enterprise Intelligence Department focuses on the company's internal data, efficiency, and management.

The internal letter likened the restructured Xiaohongshu to "a fleet setting sail," where large ships sail independently on long voyages, and small boats lead exploratory missions, together heading towards broader waters.

From the new organizational structure, the community, e-commerce, commercialization, and technology systems overseen by Conan are the large ships requiring enhanced coordination, while Rednote, Dots, and the new project incubator "Lab 1327" correspond to overseas markets, AI capabilities, and new product opportunities, respectively.

It is evident that at this stage, Xiaohongshu is attempting to convert its existing user influence into more comprehensive commercial capabilities while seeking new growth drivers for the next phase.

Appendix: Full Text of Xiaohongshu's All-Staff Internal Letter

Dear Xiaohongshu Community,

Today, we are embarking on a new round of organizational upgrades.

As the company continues to develop, our businesses and organization also need to evolve continuously. To better enhance overall operational capabilities and focus on the company's long-term development, we will comprehensively integrate the three major businesses of community, e-commerce, and commercialization, along with the company's technology system.

Conan will serve as President, integrating the three major businesses and the company's technology system, fully responsible for the company's core business operations, reporting to Seiya.

Adjustments to core business leaders are as follows:

Zhiheng, as Head of Big Commerce, is responsible for advertising commercialization and e-commerce transaction businesses, fully accountable for the healthy development and revenue of the company's commercial sector.

Paru, as Community Head, is responsible for the Xiaohongshu community's user experience, user scale, and healthy ecosystem.

Xiahou, as Algorithm Head, is overall responsible for the company's core business algorithms.

Facing the AI era, the company will further increase investment in both product technology and organization.

We will establish Dots, a first-level department with AI at its core, building a complete technology system from model R&D, infrastructure, engineering to products, integrating top AI talent and resources. Dots reports to Conan.

Simultaneously, we will establish an Enterprise Intelligence Department at the organizational level, integrating the original Enterprise Efficiency Department and Data Science Department, and collaborating with the Strategy Department and Organizational & Personnel Department to lay the foundation for the organization in the AI era across four dimensions: intelligence, talent, data, and resources.

We will also formally establish the overseas business department Rednote, initiating the exploration of international business from scratch. Rednote reports to Seiya.

Additionally, the company will establish Lab 1327, led by Product Design Head Sakuragi, to explore new product incubation mechanisms and provide space and resources for early-stage innovative projects.

We envision the future Xiaohongshu as a fleet setting sail: each large ship capable of independent long voyages, agile small boats leading exploration, together pointing towards broader waters.

Seiya, as CEO, will focus on the company's strategy and organizational design, working with the management team to ensure the company continues to move forward.

Mulan, as Chairman of the Board, will focus on the company's responsibilities and mission, continuously calibrating direction and safeguarding the company's development.

We look forward to sailing towards broader waters together.

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