Chinese regulators have informally indicated to Xiaohongshu Technology, owner of the RedNote app, that bringing in a state-owned investor could help make approvals smoother for any future listing, people familiar with the matter said.

It's unclear if Xiaohongshu will decide to act on the suggestion, the people said.

The company's investors include Alibaba (9988), Temasek and Tencent (0700). Others are considering selling some of their holdings, drawing interest from stakeholders including Hillhouse Investment and Hongshan Capital, formerly Sequoia Capital China, as well as potentially Temasek.

With uncertainty shrouding TikTok's future in the United States, social media users have been flocking to Xiaohongshu, a Chinese Instagram-like service. It is one of a handful of Chinese internet unicorns yet to debut on the stock market.