Interest Community Ecosystems and Their Impact on Internet Platform Valuations

1. Interest Circle Communities Are the Anchor of Platform “User Mindset + Stickiness”
   
   Xiaohongshu continued to emphasize “Your Life Interest Community” in 2025 and publicly stated that the platform has operated over 3000 interest circles, with more than 300 in regular operation, covering diverse life scenarios from food, fitness, parent-child to technology, and all content is polished into “real experience + resonance” [1]. Such a dense circle network means the platform has formed deep operations in the trinity structure of “people (interest users) - field (vertical ecosystem) - goods (scene content)”: each interest circle provides long-term, high-frequency interaction nodes, plus the active search habit of “people looking for information” (Xiaohongshu users search an average of 6 times a day, with search driving over 70% of usage), further reducing user bounce rate and amplifying the long-tail value of notes [1]. From a valuation perspective, this structure allows Xiaohongshu to continuously deliver high user stickiness, lower customer acquisition costs, and higher content reuse rates—all three jointly supporting the platform’s content-based moat.

2. Valuation Reference Logic for Platforms Like ByteDance
   
   ByteDance, as a super-large traffic platform spanning short videos, social media, entertainment, and search, had its valuation pushed to the range of 400-480 billion US dollars by multiple institutions in 2025, with profit expectations approaching 50 billion US dollars and revenue growth still above 20% [2]. In the valuation breakdown, besides AI research and development, global market and advertising expansion, the contribution of ecosystems similar to Xiaohongshu’s “interest circle + UGC resonance” is reflected in: ① High-stickiness users (e.g., QuestMobile data shows multiple platforms form mindset partitions, users switch to on-demand combined use, so they can occupy the “first choice for life scenarios” in high-value users’ minds) [3]; ② Precise advertising/e-commerce monetization paths brought by diverse vertical circles (over 3000 circles provide finer-grained user portraits, complementing ByteDance’s “real-time demand matching” under algorithm recommendation); ③ Long-term content assets (daily operation of notes/communities is bound to “personas”, significantly reducing the impact of traffic price fluctuations on revenue). Therefore, in the valuation model, the factor of “content ecosystem depth” can be replaced or weighted: if a platform can form a sufficient “resonance-interaction-conversion” closed loop in over 3000 interest circles, it can increase its “user lifetime value (LTV)” and “premium ability of advertising/e-commerce positions”, thereby supporting a higher revenue multiplier and lower discount rate.

3. Universal Implications for Valuation of Chinese Internet Platforms

• Differentiated circle construction
  : If a platform can build “circle-content-commerce” linkage based on interests like Xiaohongshu, it can convert mass traffic into multiple high-stickiness “long-tail ecosystems”, maintaining healthy content supply and consumption feedback even during the overall growth slowdown period [1].
• Multi-platform mindset partitioning
  : QuestMobile points out that users are more inclined to use multiple platforms in combination, and each platform needs to clarify its own “mindset partition” and “circle gene” [3]. For generalized content platforms, externalizing circle value (such as vertical e-commerce, knowledge communities) is the key to adding points for “long-term sustainability” in the valuation model.
• Valuation sensitivity
  : In investment and financing or valuation adjustments, the maturity of interest circles can be used as a substitute variable for the two indicators of “user stickiness + life cycle”. Taking ByteDance’s valuation as an example, if its subsidiaries or ecosystem partners can prove the efficiency of circle operation (such as successful cases from cold start to regular operation, brand GMV improvement), they can strive for a higher growth expectation premium on the basis of revenue diversification [2].

4. Strategic Recommendations

• Benchmark valuation model
  : Investors can take “circle depth” and “commercial conversion efficiency within circles” as weighted factors in the valuation of content platforms, especially adding the “community strength” adjustment item when comparing the valuation multiples (P/S, EV/EBITDA) of different platforms.
• Focus on high-quality “circle” assets
  : For unlisted or growth-stage companies, if they can form a stable operation mechanism around interest circles and bring high repurchase/re-engagement rates, even if they are becoming more niche overall, they can win a higher valuation outline with “high LTV” and “low marketing investment”.
• In-depth research and analysis suggestions
  : To further quantify the positive correlation between “circle output (conversion rate, ARPU, content reuse)” and valuation, you can consider launching an in-depth research model to obtain more segmented user behavior mapping and financial data.

[1] TopMarketing —《GMV暴涨40%！选对“品”，这些品牌在小红书卖爆了！》 (https://www.itopmarketing.com/info21597)
[2] 华尔街见闻 —《今年利润有望达500亿美元？接近字节跳动的知情人士回应：数据不实》 (https://wallstreetcn.com/articles/3761747)
[3] DoNews/QuestMobile —《QuestMobile2025年新媒体生态盘点：五大平台月活用户达11.49亿》 (https://www.donews.com/news/detail/1/6308940.html)