China’s biggest online lifestyle-sharing community Xiaohongshu has quietly launched a travel agency known as Puzhen Xiangli based in Shanghai, as per the Chinese business data and investigation platform Tianyancha on 11 July.
Businesses of the new equity with a registered capital of 4 million RMB ($595,353) cover travel consulting, ticket agents, tourist attraction management and exhibition and camping-related services. This has been regarded as an attempt by Xiaohongshu, a content-based platform, to seek a new revenue stream through its rich content assets within the travelling category.
The platform has become the first stop for some 64% of China’s regular wanderlust individuals, according to the 2020 China Tourism Industry Report by BigData-Research. Such popularity seen by Xiaohongshu amongst Gen Z tourists has surpassed traditional online travel agencies such as Ctrip and Fliggy, which has laid the foundation for Xiaohongshu to further take on existing market players.
Possessing a large traveller-friendly ecosystem means the platform has long been testing the waters of China’s tourism industry, tapping into the homestay sector in 2020 being one of its early steps. This was also spurred on by the country’s rising enthusiasm for camping, road trips, and short-distance tours which drove up the demand for guest houses.
This has brought about the tie-up between Xiaohongshu and Dingdandao (a Chinese order management system designed for homestays and hotels), and later with Xiaozhu, a home-sharing arm of Alibaba’s travel brand Fliggy in 2020, welcoming over 300 homestay business owners on to Xiaohongshu. With the withdrawal of foreign market giant Airbnb, this has left more space for domestic players to grab a slice of the pie.
But Xiaohongshu’s appetite goes beyond homestay. Searches for the keyword “Travel” on the platform have so far garnered over 16 million views – 8 times as many as the keyword “Homestay”, indicating a wider market potential that awaits the platform to explore.