Risk of TikTok Ban Has Users Rushing to Other Chinese-Made Apps

(Bloomberg) — A pair of Chinese-made social apps, Xiaohongshu and Lemon8, have taken over the top two positions on Apple Inc.’s iPhone download charts in the US as users seek out alternatives to TikTok ahead of an imminent ban.

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Xiaohongshu — China’s closest analog to Instagram — became the most downloaded free app on iOS and rose to the top 10 on Alphabet Inc.’s Google Play store for the first time. Many new users labeled themselves “TikTok refugees” as they joined. Familiar to Chinese who use the service not just as a repository for travel and pet videos but also a live online marketplace, its rise in the US took many in the industry by surprise.

It reflects a willingness among TikTok’s 170 million-plus users to explore alternatives.ByteDance Ltd.’s TikTok faces a deadline of Jan. 19 to find a US buyer in order to continue operating in the country, and the Supreme Court has signaled it’s unlikely to oppose the law imposing that condition.

Short of a policy reversal by President-elect Donald Trump or ByteDance selling its US service, TikTok will be in breach of the law within a week. Chinese officials are evaluating options including one that involves Elon Musk acquiring TikTok’s US operations, Bloomberg News reported.

Chinese stocks linked to Xiaohongshu rose on Tuesday. They included companies that design ads, a digital marketing services operator and even consumer brands known to hawk their wares on the social media platform.

Xiaohongshu — loosely pronounced “Shau Hong Shew” — is considered one of the more striking successes in the Chinese internet space. While its name literally translates into Little Red Book, the company has consistently stressed it bears no relation to Mao Zedong’s famous tome of quotations.

Started in 2013 in Shanghai by Miranda Qu and Charlwin Mao, the app morphed in a few years from an online shopping guide to a community of trendsetters, before venturing into e-commerce.

Along the way, Xiaohongshu attracted backing from big names such as Alibaba Group Holding Ltd., Tencent Holdings Ltd. and Temasek Holdings Pte. Like ByteDance’s Tiktok and Douyin, the Shanghai-based startup has today successfully amassed an army of influencers partly via cash incentives. They attract eyeballs and peddle products to millions of users, from which the app takes a cut.

“The ones benefiting from traffic from the TikTok ban are still Chinese apps,” GSR Ventures managing director Allen Zhu wrote on WeChat, posting a screenshot of the US App Store download chart.

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