The Chinese influencer economy is setting a high precedent for the US influencer marketing industry. Last year, social commerce in China reached $242 billion, 10 times the size of social commerce in the US. In China, social commerce is a daily occurrence, as a third of the country’s population—or 357 million people—have shopped via a social channel at least once.
As part of its latest research, written in partnership with Tony Wang and with data from TD Reply, Highsnobiety is evaluating how this new generation of Chinese Key Opinion Leaders (KOLs)—which they refer to as Cultural Opinion Leaders (COLs)—is changing the rules of influencer marketing. Wang and Highsnobiety spoke with Tianwei Zhang, China Markets editor at WWD, to learn why KOLs are critical to China’s media ecosystem and the misconceptions brands have around Chinese influence.
First up, Zhang debunks the belief brands have that everyone in China holds the same values just because it’s communist. The country’s myriad regional and local differences should be a key consideration for brands looking to enter KOL marketing there.
“The common rookie mentality for brands is that they can just hire a Chinese-speaking team and their problems are solved. Brands entering the market will need to spend at least two years to build a local team, lay the foundations, and get a slice of the market,” Zhang said.
Next, he explains that because fashion editors in China historically haven’t wielded the same level of power as fashion editors in the US, Chinese fashion KOLs are “irreplaceable.” Whereas journalists in the West sit front row at fashion shows, influencers sit front and center at fashion shows in China. According to Zhang, “It’s typically the same 50-100 names you might not recognize in the West but are the major fashion KOLs that every brand works with on a common basis.”
In the US, brands typically partner with influencers for the purpose of reaching an audience with the same interests and values, but in China, Zhang says, brands pay traditional KOLs for their diverse audience and broad reach.
“In some ways, you think of a KOL post akin to a billboard on 5th Avenue in New York,” said Zhang.
The creator economy in China is more commercial and structured too. Most successful influencers have an agency-supported team of up to 20 people. In China, it’s understood that influencers are a packaged persona, much like musicians and entertainers.
“It’s a business, and never a one-person show. Like K-pop, it’s entirely manufactured to seem like it’s about a single person,” according to Zhang.
As a result, there’s less pressure on influencers in China to feel genuine or authentic by being anti-commercial—the opposite of what’s expected of US influencers— and there’s a big price point difference between Chinese influencers and US influencers. Chinese influencer fees can be four to five times higher, according to Zhang, given the intense competition in the fashion industry in China. He says the standard cost for one Weibo post is a half-million RMB, or about $77,000.
“In a lot of ways, getting a deal with a brand is a way for potential fans to know the KOL they’re following is legitimate,” Zhang told Highsnobiety.
Two brands that Zhang thinks are winning at KOL marketing are Dior and Prada, which have very different strategies. Prada’s strong suit is integrating different creative communities from art, entertainment, gaming and technology into fashion. Prada’s highly curated approach ensures interesting KOLs will ensue from their partnerships.
The label spearheaded the restoration of the historic 1918 Rong Zhai residence, which lasted six years from 2011 to 2017. The building, located in the heart of Shanghai, was designed as “a flexible space dedicated to various cultural activities organized by the Prada Group in China,” according to an announcement.
Dior has strength in numbers, as the label boasts an army of influencers and ambassadors, and assigns one product or category to a specific celebrity. This influencer and product integration has created a shotgun effect for cultural credibility, according to Zhang. The strategy is paying off: LVMH said during its Q1 2021 earnings report that Dior out-performed all its other brands primarily due to its performance in China.
For Zhang, emerging KOLs in China need to bring something unexpected, interesting or more genuine to the table to create a deeper connection.
“Ultimately, these emerging [COLs] are a catalyst. And while brands should be working with more niche influencers as part of a larger strategy, it likely won’t replace traditional KOLs as a main lever for immediate demand.”