Core Viewpoint - Xiaohongshu has officially acquired a payment license through the acquisition of Dongfang Payment, marking a significant expansion in its e-commerce and financial services, making it the third major player in China's content social platform sector to hold such a license after Douyin and Kuaishou [1][3][4]. Group 1: Acquisition Details - Dongfang Electronic Payment Co., Ltd. has undergone a change in ownership, with all original shareholders exiting and Xiaohongshu's subsidiary, Ningzhi Information Technology (Shanghai) Co., Ltd., becoming the sole shareholder [3][4]. - The acquisition includes an increase in registered capital from 121 million to 200 million yuan, indicating a solid financial backing for the payment operations [8]. - Dongfang Payment holds a payment business license issued by the People's Bank of China, with its license renewal valid until May 2026, which is crucial for Xiaohongshu's operational capabilities [4][8]. Group 2: Strategic Implications - The acquisition is seen as a "win-win" situation, allowing Xiaohongshu to enhance its compliance and regulatory risk management while expanding its financial services [6][8]. - Xiaohongshu's entry into the payment sector is expected to facilitate its cross-border e-commerce operations, leveraging Dongfang Payment's resources for international transactions [10][11]. - The move aligns with broader trends in the industry where major internet companies are integrating financial services to create a comprehensive content-consumption-funding ecosystem [10][11]. Group 3: Market Position and Growth - Xiaohongshu's valuation is projected to reach 31 billion USD by June 2025, up from 26 billion USD earlier in the year, reflecting strong growth expectations [12][13]. - The platform has seen a significant increase in active purchasing users, particularly among younger demographics, with 70% of its purchasing users being born after 1995 [12]. - The company is actively expanding its workforce, with employee numbers rising significantly, indicating growth and investment in its operational capabilities [12][13]. Group 4: Regulatory Environment - The regulatory landscape for electronic payments has become increasingly stringent, with new regulations requiring clear ownership structures and compliance from payment license holders [6][8]. - Xiaohongshu has faced scrutiny regarding content management and compliance, leading to significant actions against accounts violating regulations, which reflects its commitment to maintaining a compliant platform [13][14]. - The company has been proactive in addressing regulatory challenges, including recent measures to enhance oversight in sensitive sectors like education and healthcare [14].

Core Insights - Xiaohongshu has obtained a payment license, marking a significant step in enhancing its financial compliance and addressing the critical infrastructure gap in its commercial ecosystem [2][3] - The acquisition of the payment license is seen as a strategic move to facilitate the monetization of e-commerce and local services, while also ensuring compliance with regulatory requirements [2][3] Group 1: Payment License Acquisition - Xiaohongshu's acquisition of the payment license is a response to the urgent need for a self-owned payment system to reduce transaction costs and enhance data control [2][3] - The payment license was obtained through its wholly-owned subsidiary, Ningzhi Information Technology (Shanghai) Co., Ltd., which now fully controls Dongfang Electronic Payment Co., Ltd. [3] - The registered capital of Dongfang Payment has increased from 121 million yuan to 200 million yuan, reflecting a growth of over 65% to meet regulatory capital requirements [3] Group 2: Strategic Implications - The move into the payment sector signifies a new phase in Xiaohongshu's commercialization strategy, creating a closed-loop transaction system supported by its own payment capabilities [3][6] - The payment license is viewed as a critical resource, especially since new licenses have been scarce since 2016, and many institutions face revocation or restructuring due to compliance issues [6] - By integrating payment capabilities, Xiaohongshu aims to enhance user experience and reduce reliance on third-party payment platforms, thereby minimizing transaction costs and data sharing limitations [6][7] Group 3: Future Prospects - Xiaohongshu is expected to prioritize integrating local services and community e-commerce, enhancing transaction efficiency and merchant experience [7] - The platform's entry into the payment space may intensify competition among vertical platforms for niche payment scenarios, although it is unlikely to disrupt the dominance of Alipay and WeChat Pay [7] - There are concerns regarding the sustainability of relying on a single shareholder for funding and the potential risks associated with lax merchant entry standards, which could lead to regulatory scrutiny [7]

Core Viewpoint - Xiaohongshu has acquired a payment license through the acquisition of Dongfang Electronic Payment Co., Ltd., which will support its e-commerce ecosystem development [2][5][7]. Group 1: Payment License Acquisition - Dongfang Electronic Payment Co., Ltd. underwent a series of business changes, with Ningzhi Information Technology (Shanghai) Co., Ltd. becoming the sole shareholder, indicating Xiaohongshu's acquisition of the payment license [5]. - The payment institution was originally granted a "Payment Business License" by the People's Bank of China in May 2011, which was renewed in August 2024, allowing it to conduct internet payment services [7]. Group 2: E-commerce Strategy - Xiaohongshu has accelerated its e-commerce strategy in 2023, establishing a "Big Business Sector" to integrate its commercialization and e-commerce teams [9]. - The launch of the "Million Commission-Free Plan" aims to lower entry barriers for small and medium-sized businesses, alleviating their operational pressures [10]. - A significant update in August 2023 placed the "Market" entry in a primary position in the app's bottom navigation, enhancing transaction efficiency [10]. Group 3: Financial Performance and Market Position - In 2024, Xiaohongshu's revenue is projected to exceed 30 billion yuan, with advertising revenue reaching 21.6 billion yuan, a 48% year-on-year increase [10]. - The platform's valuation increased by 19% within three months, reaching 31 billion USD by September 2025 [10].

Core Viewpoint - The acquisition of a payment license by Xiaohongshu through its subsidiary, Dongfang Electronic Payment, is a significant strategic move that enhances its e-commerce capabilities and reduces reliance on third-party payment channels [1][7]. Company Overview - Dongfang Electronic Payment Co., Ltd. is now 100% controlled by Ningzhi Information Technology (Shanghai) Co., Ltd., a subsidiary of Xiaohongshu Technology Co., Ltd. [1][2] - The payment license for Dongfang Payment is set to be renewed in August 2024, allowing it to conduct internet payment services [1]. Business Implications - The acquisition of the payment license is crucial for Xiaohongshu's e-commerce strategy, enabling it to reduce dependence on third-party payment services and gain control over transaction data [7]. - This move is expected to accelerate the establishment of a complete business ecosystem that integrates content, transactions, and payments [7]. - By controlling its payment system, Xiaohongshu can enhance user experience and streamline the purchasing process within its platform [7]. - The control over payment channels is anticipated to lower transaction costs and open up new opportunities in cross-border payments and fintech services [7]. Financial Background - Dongfang Payment was established in March 2008 with a registered capital of 121.3 million RMB, focusing on internet payment services including customs tax payment and cross-border transactions [6].

Group 1 - The core point of the article is that Dongfang Electronic Payment Co., Ltd. has been fully acquired by Ningzhi Information Technology (Shanghai) Co., Ltd., a subsidiary of Xiaohongshu Technology Co., Ltd., which means Xiaohongshu has obtained a payment license [1] - The People's Bank of China indicates that Dongfang Payment's payment license will be renewed in August 2024, allowing it to conduct internet payment and other businesses [1] - Dongfang Payment was originally granted the "Payment Business License" by the People's Bank of China on May 18, 2011, and has successfully renewed it since then [1] Group 2 - Dongfang Payment's main business includes electronic payment for national customs duties, free trade zone operations, and cross-border RMB and foreign exchange payment services [1] - The company's key products include Suhui Tong, Sujie Hui, Hangfu Tong, and Payment + [1]