When Chinese Stanford student Charlwin Mao was coming up with a name for his start-up in 2013, he settled on Xiaohongshu, which translates to “Little Red Book.”
He was referring to the color of his prestigious university and his former employer, Bain Capital, both bastions of American capitalism.
This week, however, his choice of name became the focal point of the internet conspiracy theory that the application got its name from a collection of quotes by Chairman Mao Zedong, which some translate as “Little Red Book”.
Xiaohongshu, a popular social media app in China, was not known outside the country until the impending ban on TikTok in the US led to an unexpected increase in the number of American users. They call Xiaohongshu, which does not have an official English name, RedNote.
Last year, US lawmakers passed legislation that would have banned TikTok unless its Chinese owner, ByteDance, relinquished control, saying it threatened national security. Unless the Supreme Court intervenes, TikTok will be banned in the US on Sunday, cutting off access for the 170 million Americans who spend billions of dollars on the app.
The irony that a Chinese social media app, with strict content control regulations and overseen by Beijing’s powerful internet censors, has become a beneficiary of Washington’s efforts to ban another Chinese-owned app has thrilled netizens.
But for Mao, it is not related to Chairman Mao, it is not to be laughed at. It operates in a sensitive regulatory environment where regulators do not look favorably on any breach of the Great Firewall — the digital divide that separates China’s internet population from the outside world.
Xiaohongshu has responded to its newfound popularity in the US by racing to update its content moderation controls. Its co-founder and CEO, thrust into the media spotlight he actively avoids, remains silent.
Mao is part of the second generation of Chinese Internet entrepreneurs who emerged in the mid-2010s to challenge the dominance of giants such as Baidu, Alibaba and Tencent.
While still at Stanford Business School, he pitched an Internet company focused on lifestyle to investors.
Early funding came from US and Chinese backers ZhenFund, GSR Ventures and what was then called GGV Capital. He and co-founder Miranda Qu, a fellow Wuhan native and marketing director, tried out several ideas, including a travel guide for Chinese tourists.
They finally settled on a photo-sharing app that focuses on lifestyle content. Mao later won the backing of both Tencent and Alibaba, a rare feat for arch-rivals. Both invested prevent another from acquiring startups.
According to figures provided to investors, Xiaohongshu has more than 300 million active users who rely on it for restaurant tips, travel ideas and beauty tips. That number will be higher after this week. It’s an essential channel for consumer brands to reach customers through sponsored posts and influencers.
Those close to Ma describe him as a smooth operator, fluent in Chinese and American business — skills honed during his time at Bain Capital.
“There are two types of typical Chinese tech entrepreneurs. One is a nerdy guy who wears t-shirts and sneakers and is shy when speaking in public. Another type of wolf is a battle-hardened warrior who barks orders at the people around him,” said one longtime employee.
“Mao is neither. He has the best fashion sense of all the Chinese tech founders. He speaks with the clarity of the Wall Street elite,” they added.
Visitors to Xiaohongshu’s headquarters in Shanghai encounter the physical manifestation of its online community. Unlike most austere Chinese corporate offices, it’s filled with lush houseplants, stylish coffee carts and a stage for influencers to shoot videos.
On Fridays, staff bring dogs and cats into the office, part of a long-standing tradition that Mao encouraged to “create a sense of home,” one employee said. The use of corporate nicknames enhances the informal atmosphere. Mao took the moniker Seiya, a Japanese anime hero, while Qu was named after the historical folk heroine Mulan.
Despite the hallmarks of a progressive work environment, Xiaohongshu still has the kind of extreme work culture common to Chinese tech companies. Mao is known to interview potential employees late at night, indicating the commitment he expects. Some point to high staff turnover as evidence of burnout.
This week the employees worked harder than ever. In addition to the challenge of providing sufficient data center capacity, there is the sensitivity of playing host to the unique exchange between US and Chinese users.
Many are delighted to see a well-intentioned relationship at a time of deteriorating geopolitical ties. It has also attracted interest from those looking to buy a stake in Xiaohongshu at an increased value of $20 billion, according to two investors.
However, others point out that Beijing is unlikely to tolerate Chinese Internet users being exposed to more Western content. While in the US, the same lawmakers who decided to ban TikTok could make Xiaohongshu their next target. Given the strained relationship between the two countries, Xiaohongshu’s moment of global popularity may be short-lived.
eleanor.olcott@ft.com, zijing.wu@ft.com
Additional reporting by Wenjie Ding and Nian Liu in Beijing
