小红书's Second Voyage: This Time, Headed for AI
- Core Thesis: Xiaohongshu faces a survival crisis as AI threatens its "life experience" moat. It is being forced to accelerate the transformation of its accumulated authentic user experiences into AI-driven tools and business models, but must strike a balance between commercialization and preserving its genuine content ecosystem.
- Key Elements:
- Xiaohongshu's moat is built on the specific, relatable life experiences (e.g., consumption decisions) deposited by hundreds of millions of users over thirteen years. Its nearly 600 million daily searches form its most core asset.
- While AI provides "pre-made meal" answers that simplify decision-making, it erases the specific prerequisites and hesitation inherent in real experiences, threatening users' foundation of trust. The platform has implemented AI governance measures (e.g., cracking down on AI-generated ghostwriting) to protect authentic content.
- By establishing a first-level AI department called Dots, acquiring the AI search product 'Dian Dian', and building tools like the RED Skill platform, Xiaohongshu is proactively structuring its experience data, aiming to evolve from "flipping through notes" to having AI directly deliver customized answers.
- Strategic investments have shifted towards AI hardware (e.g., Yunwang Innovation) and model companies (e.g., Moonshot AI). Securing a payment license aims to build a complete business loop from user need discovery and decision-making to transaction completion.
- Commercialization data (e.g., a 29-day decision cycle for facial serums) demonstrates its value lies in capturing users' "moments of hesitation." AI allows for more precise ad targeting, enabling ads to "live within the answers."
Original Author: Sleepy
At the end of 2022, shortly after ChatGPT was launched, Mao Wenchao borrowed an employee's phone. He typed a question into the dialogue box: Will Xiaohongshu be disrupted?
According to reports, since then, he has required his team to report on AI progress every two weeks. Biweekly reporting suggests the machine hadn't yet provided him with a reassuring answer.
In August 2023, he wrote in an internal letter that while chatting with foreign friends, he discovered a large number of questions people ask on ChatGPT are about life experiences – how to choose products, how to use them, how to avoid pitfalls – which overlaps with Xiaohongshu's business.
But he went on to say this is because overseas lacks this accumulation of experience, while Xiaohongshu has it, and this moat cannot be easily shaken by AI for now.
The term 'moat' was previously mostly used by entrepreneurs pitching to investors, but this time it seemed like he was reassuring his own anxiety.
That year, Xiaohongshu just turned ten, surpassed 300 million monthly active users, turned profitable for the first time, with revenue of $3.7 billion and a net profit of $500 million. It was projected that profits would double in the following year, exceeding $1 billion.
In business history, companies have two ways to die: from poverty, or from wealth. Countless have died from poverty, nothing to say about that. Deaths from wealth always make the news; Kodak had money in the bank when it died, Nokia was still the industry leader when it fell.
Having abundant money and long-lasting life are two different things. Wealth cannot eliminate fear; it only turns fear into a series of specific actions.
In 2026, this series of actions intensified.
On June 8, Xiaohongshu launched RED Skill, allowing a component to be attached below notes that can be copied and used by Agents.
Going further back, on April 30, the AI first-level department Dots was established, consolidating models, infrastructure, and engineering products, reporting directly to the new President Conan.
Even earlier, it acquired the development company behind the AI search product Diandian and also obtained a payment license.
Names like MiniMax, Moonshot AI, and a string of AI hardware companies began to appear on its strategic investment list.
Over the past thirteen years, the consumption experience, living habits, and everyday judgments left in notes by hundreds of millions of users constitute its true foundation. With AI arriving, it needs to reprocess these judgments, first turning them into answers, then into tools, and finally into a business. If it doesn't want to wait to be disrupted, it has to take action first.
But can experience withstand such processing? To answer this, we need to go back to 2013, back to China's own Age of Exploration.
