Delivered September 29, 2019. Contributor: Teresa W.
To understand the influencer marketing space in China, specifically how it has developed.
Our initial research indicates that influencer marketing in China is extremely successful due to cultural and regulatory differences. In addition, the influencer ecosystem has evolved into a $15.5 billion industry with influencer incubators, retailtainment platforms, social media recommendation search engines, and influencer creative studios.
Why Influencer Marketing is Successful in China
Due to an abundance of food and product safety scandals, consumers in China are wary of purchasing products they are unfamiliar with and often turn to others for recommendations.
WeChat, the largest social media platform in China, does not sell information about users to advertisers which would allow them to target specific consumers segements. Companies, therefore, must seek the help of influencers who are already targeted the market the company is interested in.
China is over-supplied with products in terms of both domestic brands and Western brands. Consumers in China are overwhelmed with choices and inundated with ads, making purchasing decisions difficult. Consumers rely on the recommendations of influencers to help with purchasing decisions.
In China, there are only three main companies that control the majority shares in social media, e-commerce, and digital payments. The integration of these three systems allows for a seamless transaction experience.
Influencer Marketing Ecosystem in China
China has influencer incubators which groom influencers, called Key Opinion Leaders (KOLs). These KOLs interact with their followers throughout the product lifecycle. The largest influencer incubator in China is Ruhan, backed by Alibaba and Lenovo.
E-commerce platforms in China are fast becoming social media or retailtainment platforms. Alibaba is leading this trend with Taobao Live, Tmall Live, and Little Red Book. These platforms share videos and live streaming events featuring popular e-commerce influencers.
Social media and e-commerce platforms in China are using more sophisticated search algorithms that allow users to search social media posts for recommendations. Influencers using targeted keywords and Search Engine Optimization can achieve higher rankings. In addition, these search engines often take number of followers, comments, and reposts into account when ranking.
Influencers in China have begun to start their own creative studios, disrupting the traditional advertising agencies. These studios are pulling in writers, photographers, and videographers from declining television and print media.
Only the project owner can select the next research path.