What We Can Learn From The Chinese Influencer Ecosystem
When we look at influencer marketing trends, innovations and future directions, we have to look east to China. After all, the Chinese market has over 800 million active internet users (subscription required), with its e-commerce economy forecasted to reach $1.8 trillion by 2022.
Chinese tech companies are at the forefront of digital innovation, driven by e-commerce powerhouses such as Alibaba Group and Tencent, and newcomers like ByteDance, the owner of TikTok. Indeed, over the last decade, China has turned into a destination for Western corporate tourism — offering a sneak peek into digital commerce and the role of influencers and key opinion leaders (KOLs), in particular.
So, let’s dive into the topic and review why key opinion leaders are so powerful in China:
They entertain the crowds through «retailtainment.«
Do you remember the traditional teleshopping ads — the protagonist selling the jewelry or home care apparel on TV with a smiling assistant? Teleadvertising is still a multibillion-dollar industry in the U.S. (subscription required). Likewise, in 2019, 21 million Germans (subscription required) were still “interested” or “highly interested” in watching teleshopping programs on TV.
The core concept is the same for livestreaming retail shows on which KOLs introduce their favored products — only they are targeting much younger audiences. Based on what I have seen, China’s most successful influencers are real sales talent who entertain their audiences because they see livestreaming sessions as one-of-a-kind shows where they can perform. KOLs act as stylists, shopping guides, even customer service agents — providing real-time answers to questions from the audience, posted on the live messenger during the show, and generating massive engagement.
Livestreaming can be risky, though, as one of China’s most popular key opinion leaders, Li Jiaqi, found out (subscription required). He advertised a nonstick pan on a live show, but the egg stuck.
They blur the lines between social media and e-commerce.
While American social media platforms such as Facebook, Instagram and Snapchat have been slow to adopt direct e-commerce features, their Chinese counterparts were built with social commerce in mind. And when Facebook and Instagram finally added a “buy” button, Chinese platforms realized that social interaction and user-generated content can be an integral part of a consumer’s shopping journey.
One of these innovative companies is called Xiaohongshu (also known as RED), which has built an entire ecosystem around the discovery of new products and sharing reviews and photos (user-generated content). At the same time, it lets people purchase those products highlighted in the reviews (e-commerce). As social commerce places people, rather than products, at the center of the purchasing process, it instills a greater level of trust, which, in turn, boosts online sales.
They cocreate entire new brands with the support of influencer incubators.
China’s shining social media stars can command vast audiences — sometimes millions of loyal followers. They are exceedingly powerful when it comes to social influence. It’s not a surprise that they build brands together with their followers.
Special KOL incubators — players of the e-commerce landscape — provide the infrastructure and resources. They strive on finding the right potential/talent, educating them, building a strong community of followers around them and finally providing the infrastructure for building their own brands. They assist in marketing activities, planning and providing other necessary resources.
This flipped influencer-brand model boosts brand loyalty and builds a recurrent consumer base. Unlike their peers from the West (who rely on traditional sponsorships and ad budgets), China’s KOLs are able to create and sell their own products, and after a big sale (e.g., Singles Day sale), they split their profits with their incubators.
How can brands apply these lessons in influencer marketing outside of the Chinese market?
The Chinese market has proven that it is possible to take the status quo and flip it upside down in order to build a business model that operates completely different — resonating with the local consumers’ needs, and mixing entertainment, social media, consumer reviews and e-commerce together in one big ecosystem. We can already see some elements from China emerging in Europe and North America. Social platforms, such as Facebook and Instagram, are piloting in-app shopping features. We see brands experimenting with livestreaming shopping events and influencers launching their own fashion and beauty brands.
I believe it will not take long until Chinese players start expanding globally, so brands should get ready and define their social commerce strategies now. However, not everything that is working well in China will work globally, given the significant cultural and economic differences. Nevertheless, both influencers and brands should pay attention to what is going on in China and experiment in their own markets if they want to stay ahead in the influencer game.