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Potential TikTok ban: Chinese RedNote tops US app store

Jan 13, 2025
5 min read
Table of Contents
  • 1. The Rise of RedNote
  • 2. Popularity Surge of xiaohongshu
  • 3. TikTok's Legal Challenges
  • 4. TikTok's Legal Maneuvering
  • 5. The Impact on the Stock Market
  • 6. Government Responses and Concerns
  • 7. Conclusion

tiktok.jpg

Potential TikTok ban, RedNote, a Chinese social media app also known as Xiaohongshu, has topped the Apple App Store as users prepare for a potential TikTok ban.

In recent weeks, the landscape of social media has shifted dramatically in the United States, particularly with the rising popularity of Chinese social media app RedNote. This surge comes against the backdrop of increasing fears regarding a potential ban on TikTok, which has led many American users to seek alternative platforms. As of Monday night (US time), RedNote claimed the top spot on the Apple App Store's free downloads chart, signaling a significant change in user preferences.
 


The Rise of RedNote


What is RedNote?
RedNote is the international version of Xiaohongshu, a popular Chinese social media platform that combines features of social networking and e-commerce. The app allows users to share content related to lifestyle, fashion, and shopping, offering a community-driven experience. Its unique blend of social interaction and commercial opportunities has made it particularly appealing to younger users and influencers.
 


Popularity Surge of xiaohongshu


The app's ascent in the US market can be attributed, in part, to a group of TikTok users who have started referring to themselves as "TikTok refugees." These users have flocked to RedNote in search of a new platform to express themselves and engage with content creators. Many have shared videos explaining their motivations for joining, emphasizing the need for a space that remains unaffected by the uncertainty surrounding TikTok.
 


TikTok's Legal Challenges


Supreme Court Deliberations
The legal landscape for TikTok has become increasingly precarious, particularly following a two-hour session held by the US Supreme Court on January 10, 2025. The court deliberated on TikTok's future in the United States, following a series of legal challenges that have placed the app's existence in jeopardy.

Federal Appeals Court Ruling
On December 6, 2024, a federal appeals court upheld a law requiring ByteDance, TikTok’s parent company, to divest the app in the US by January 19, 2025, or face a ban. This ruling has left TikTok in a state of uncertainty, prompting the company to seek an injunction from the Supreme Court to block the ban until a final ruling can be made on its legality.
 


TikTok's Legal Maneuvering


In its efforts to stave off a ban, TikTok filed a request with the Supreme Court on December 16, 2024, seeking an injunction that would prevent the enforcement of the ban until the court could review the case. The Supreme Court agreed to consider this request just two days later, indicating the urgency and significance of the matter. The arguments were set to be heard on January 10, 2025, adding another layer of complexity to the ongoing saga.
 


The Impact on the Stock Market


Stock Surge for RedNote-Related Companies
In US stock market, as RedNote's popularity soared, so did the stock prices of companies associated with the app. On the opening day of the Chinese A-share market, stocks related to RedNote experienced significant gains. Notably, companies like Foshan Yowant Technology and Inly Media Co reached their daily trading limits during pre-market bidding, showcasing the financial implications of RedNote's newfound status.

Market Reactions
Investors are increasingly viewing RedNote as a viable alternative to TikTok, leading to a surge in market interest. This shift in sentiment reflects broader concerns about TikTok's future and the potential for RedNote to capture a significant portion of the social media market in the US.
 


Government Responses and Concerns


Diplomatic Statements
The unfolding situation has not gone unnoticed by government officials. In March 2024, when US lawmakers were considering a potential TikTok ban, then Chinese Foreign Ministry spokesperson Wang Wenbin addressed the issue during a press briefing. He pointed out that despite years of scrutiny, the US has failed to provide concrete evidence that TikTok poses a national security threat.

Critique of US Actions
Wang criticized the US for resorting to what he termed "hegemonic moves" in response to competitive pressures. He argued that such practices undermine the normal operation of businesses and erode international investors' confidence in the US market. Wang emphasized that this approach could ultimately backfire on the US, disrupting global economic and trade orders.

TikTok Refugees' Experiences
The influx of "TikTok refugees" onto RedNote has created a unique community dynamic. Many users have expressed their relief at finding a platform that allows for freedom of expression without the looming threat of a ban. The community-driven nature of RedNote has fostered an environment where users can share their experiences and connect with like-minded individuals.

Cultural Exchange
As American users join RedNote, there is a growing exchange of cultural ideas and trends. This dynamic enriches the platform, making it a melting pot of creativity and innovation. The engagement between different cultures can lead to new content styles and trends that may further enhance RedNote's appeal.

RedNote's Potential
With its rising popularity and the legal challenges facing TikTok, RedNote is well-positioned to capitalize on the current climate. If TikTok's future remains uncertain, RedNote could emerge as a leading player in the social media landscape, particularly among younger users seeking alternatives.

However, the ongoing legal battles surrounding TikTok could create an unpredictable environment for social media platforms in the US. As the legal landscape evolves, it will be crucial for both TikTok and RedNote to navigate these challenges effectively.
 


Conclusion


As RedNote rises to prominence amid concerns over a potential TikTok ban, the implications for the social media landscape are significant. The app's popularity among American users, coupled with the legal challenges facing TikTok, indicates a shift in user preferences and market dynamics. The future remains uncertain, but the unfolding events highlight the complex interplay between social media, legal frameworks, and cultural exchange. As users continue to flock to RedNote, the platform may transform the social media experience for many, shaping the landscape for years to come.


Risk Warning: this article represents only the author’s views and is for reference only. It does not constitute investment advice or financial guidance, nor does it represent the stance of the Markets.com platform.When considering shares, indices, forex (foreign exchange) and commodities for trading and price predictions, remember that trading CFDs involves a significant degree of risk and could result in capital loss.Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice. Trading cryptocurrency CFDs and spread bets is restricted for all UK retail clients. 

Frances Wang
Written by
Frances Wang
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Table of Contents
  • 1. The Rise of RedNote
  • 2. Popularity Surge of xiaohongshu
  • 3. TikTok's Legal Challenges
  • 4. TikTok's Legal Maneuvering
  • 5. The Impact on the Stock Market
  • 6. Government Responses and Concerns
  • 7. Conclusion

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