(Yicai) Oct. 16 -- First-quarter profit at Xiaohongshu, a Chinese social media and e-commerce platform likened to Instagram, reportedly surged five-fold from a year earlier on the back of higher advertising revenue from retailers that target female generation-Z consumers.

Net profit was USD200 million in the three months ended March 31, the Financial Times newspaper reported on Oct. 13, citing two people briefed on the figures. Revenue jumped 67 percent to USD1 billion.

Xiaohongshu is privately held and has not made its earnings public. Yicai has contacted the Shanghai-based startup for comment.

Xiaohongshu also hopes to go public in Hong Kong, according to the Financial Times. There have been many previous reports of the firm’s plans to list. In August, speculation about an imminent IPO resurfaced, though people close to the company denied the claims.

Xiaohongshu, which translates as Little Red Book, is one of the fastest-growing social media platforms in China. Founded in 2013, it quickly gained traction with younger users, especially women, for sharing lifestyle tips, product reviews, and personal stories. Since then, the platform has expanded into e-commerce, allowing users to buy products directly through the app.

Its monthly active user numbers jumped 20 percent last year to 312 million. The firm also swung into the black with a net profit of USD500 million on USD3.7 billion of revenue, up 85 percent.

Advertising revenue has always been a major part of Xiaohongshu's income, accounting for around 80 percent in 2022, though its share shrank a little last year due to the company's increasing focus on e-commerce. Xiaohongshu has not disclosed any e-commerce-related revenue figures but has frequently mentioned its growth.

The company’s shift toward e-commerce has seen growth, particularly in live-streaming, which is booming in China’s online shopping ecosystem. The number of users placing live-stream orders has surged 9.8 times over the past year and a half, the platform's head of e-commerce operations said at an event on July 25. The number of collaborating brands jumped 5.2 times, the person added.

Xiaohongshu will support small and medium-sized businesses, Chief Marketing Officer Zhi Heng said on Sept. 13. The ranks of these merchants on the platform soared 379 percent in the six months ended June 30 from a year ago, while their gross merchandise value leaped 436 percent.

But Xiaohongshu still struggles to compete with more established e-commerce platforms, merchants, consumers, and influencers told Yicai. Most small and mid-sized businesses mainly value the platform’s promotional capabilities, they noted.

Xiaohongshu’s rivals include the likes of Alibaba, JD.Com, and Pinduoduo.

Editor: Martin Kadiev