KOL Marketing, a Double-edged Commercial Tactic in China
What pitfalls of KOLs in China should brands be aware of?
Influencer marketing is a widely used commercial tactic in the world. And China is not an exception even though it has a unique digital landscape because of its highly controlled internet policy. The KOL, or the Key Opinion Leader, is a term coined in China and refers to the people who are influential in the online community. Stars, celebrities, or influencers native to social media, are all considered KOLs. They are also the most popular collaborative partners for the brands that develop businesses in the Chinese market for being efficient communication channels that can help companies quickly build connections with local consumers. However, due to the emerging nationalist trend and increasing political tension between China and other countries, influencer marketing implementation is becoming more and more challenging. KOLs are not only helping brands better communicate with target clients but also posing underlying threats which can generate huge commercial damages.
High social media penetration & dependence on online information
Influencer marketing is playing a critical role in the Chinese market, especially for the foreign players who want to enter this country. This is because digital channels, including social media and e-commerce platforms, are the most important touchpoints to contact the Chinese people. China is the country where the online social platform is highly developed and integrated into people’s live: 62.6% of the Chinese people are using social media while the global average is only 53.6%. Moreover, they tend to search product details and the using or purchasing experiences online before making purchases. The percentages of the Chinese people who find new products and brands on the internet and the ones who read online reviews are higher than the global averages. Thus, the consumers in China are deeply affected by online information. The high penetration of social media and the trend of searching product details and reviews on the internet create a favorable environment for influencer marketing. KOLs are some of the informative source providers in the digital world and therefore have impacts on the Chinese people’s consumption behavior. In fact, it is estimated that they can affect the purchasing decisions of 37% of the Chinese consumers in the fashion sector.
Wide audience reach & brand image creation
The use of influencer is also bringing benefits to brands. By leveraging the popularity of KOLs, companies are capable of widely reaching the Chinese people. Many Chinese influencers have an incredibly huge fanbase. YANG Mi, for example, is one of the most popular celebrities and has more than 100 million followers on Weibo. The collaboration with the KOLs having a huge number of fans can help corporations quickly raise their brand awareness in China. Additionally, the Chinese influencers can help companies quickly build their business image and reputation. This is because people tend to project their affection for idols toward the brand their idols endorse. The images of the company and of the KOLs are therefore intertwined. As long as the Chinese influencers that corporations are working with have a good reputation, companies can benefit from it in terms of business image building.
Sales boost
The Chinese influencers are also able to drive enormous sales inside the country. LI Jiaqi, a famous live-streaming KOL, is known as the “Lipstick King” after selling more than 15 thousand lipsticks in just 5 minutes during his live stream on Taobao Live. During the pandemic crisis, the impact of KOLs on people’s consumption decisions has even increased as the live-stream e-commerce became more and more popular during this period. According to the data from CBNData, the Chinese influencers have generated 52.3% more sales amount than the same period in 2019. Another driving force of product sales is the KOCs, the Key Opinion Consumers. They are micro-influencers with fewer followers but more influential in their communities. The content produced by KOCs is more about experience sharing which perfectly meets the Chinese consumers’ habit of looking at product reviews before buying. While brands can reach a huge number of audiences via KOLs, KOCs are able to help corporations increase the conversion rate by encouraging their followers to make purchases.
Instability rooted in politics
Regardless of the benefits created by the Chinese influencers, they have also been bringing some challenges, especially in recent years. Unsurprisingly, the intervention of the Chinese government makes the KOLs less stable collaborative partners for brands. Xinjiang cotton controversy is believed to be manipulated by the Chinese government and has generated huge damages to several fashion brands. After the Weibo account of the Communist Youth League, one of the sub-organizations of the Communist Party of China, reposted the statement of H&M about not using cotton produced in Xinjiang, a backlash went viral in the Chinese online community because this claim is considered a political position against China. The outcry has later become a national boycott against all the apparel companies that had previously announced they wouldn’t source garment materials from Xinjiang due to human rights abuse concerns. Soon after this crisis broke out, numerous Chinese celebrities terminated their collaboration contracts with the brands involved such as Nike, Adidas, Burberry…etc. At least 50 Chinese celebrities canceled their partnerships with apparel corporations in this backlash.
Trend of self-censorship
Moreover, some fashion companies even lost their ambassadors for not explicitly showing their support toward China over this forced-labor cotton issue. For example, Lacoste lost its first Chinese ambassador, HUANG Zitao, under the accusation of not stating its support of cotton produced in Xinjiang. This kind of self-censorship is very common in China. Even before the Xinjiang cotton boycott, it was already a must for Chinese celebrities, especially when it comes to political issues. In 2019, Versace launched a T-shirt featuring a list of countries and cities. In its design, Hong Kong and Macau are considered independent countries, which contradicts the claims of China about its territory. YANG Mi, the brand’s Chinese ambassador at that time, has soon terminated her collaboration with Versace. It was only 48 days after her ambassadorship was announced by the brand. Such political self-censorship leads to the problem of instability of KOLs and therefore is creating potential financial damages on companies.
Consumerist fan culture
The consumerist culture in the Chinese fan community is the key to the success of KOL marketing in the country. The Chinese fans tend to consider themselves the “parents” of their idols and therefore have the responsibility to “nurture” those celebrities by helping their career development. To achieve this goal, the most direct way is to buy the products endorsed by KOLs. There is even a trend of showing the receipt of the goods advertised by idols on social media to express affection toward KOLs and gain respect from a fan community. However, such behavior can sometimes be out of control. In May 2021, “Youth and You, Season 3”, a popular Chinese talent show launched a voting activity by inviting audiences to buy milk from the sponsor company and scan the QR code on the package to vote for their idols. Gallons of milk were discarded because the radical buyers made huge purchases to obtain thousands of digital ballots without drinking the beverage. This scandal has caused a huge backlash in China. Thus, the show was quickly banned and canceled by the Chinese government. Within one week, the Cyberspace Administration of China launched a new online censorship project called “Qinlang” (清朗) and aiming to suppress the KOL content possibly increasing extreme fan actions. This online initiative will unavoidably make the production of celebrity collaboration content more challenging for companies.
Risk of cyberviolence
The threats posed by KOLs’ fans can bring even more serious damages to brands. In 2020, a fan-generated article using XIAO Zhan, a popular Chinese KOL who is also the new ambassador of Tod’s, as the main character enraged his fans because they thought the content damaged their idol’s image. His supporters, therefore, decided to report Archive of Our Own (also known as AO3), the fan fiction creation website where the article was from, as pornography to local authorities. This platform was quickly banned by the Chinese government. This decision has caused a huge backlash in the A03 user community. The fanwork platform users have made a boycott against all the products and brands advised by XIAO Zhan. And they even made their actions become cyberviolence by paralyzing the customer service lines of the companies having collaboration with XIAO Zhan and leaving numerous hatred comments under the posts of both this KOL and his commercial partners. The hashtag #BoycottXiaoZhanEndorsment (#抵制肖战代言) on Weibo has been viewed for more than 900 million times so far.
Potential of virtual KOLs
As the Chinese Gen Zs are expected to be the next major consumer group in the country and profoundly affected by KOLs, KOL marketing is still an efficient commercial tactic to attract them. Given the pitfalls brought by Chinese celebrities, finding ways to lower the risks is necessary for brands. As Gen Zs were born with smartphones in hand, they are more tech-savvy and more interested in digital content. Thus, the virtual influencer is one of the potential options of KOL marketing in China. It is estimated that more than 390 million Chinese people are interested in anime idols. Virtual KOLs are not human. All their behaviors are programmed and well-controlled by the team behind them. Therefore, they are less likely to have a PR crisis because of their personal behaviors. Additionally, they are highly flexible in terms of digital content format. LUO Tianyi (洛天依), for example, is a virtual singer “released” in 2012 and now has more than 5 million followers on Weibo. She is one of the most popular anime celebrities in China and has been collaborating with several brands. In 2020, her collaboration live-streaming show with LI Jiaqi to promote the newest products of L’Occitane attracted more than 3 million viewers. Another virtual idol who is getting more and more attention is Ling(翎), who was “born” in 2020. Different from LUO Tianyi who is designed more like a Japanese animation character, Ling is a human-like virtual idol with an appearance aligned with the traditional esthetics of the Chinese people. She has already collaborated with several famous corporations like Vogue and Tesla. Her style combining Chinese beauty and contemporary fashion style meets perfectly the trend of Guochao, a nationalist consumption fad focusing on China-centric designs and products. Thus, she is highly potential for future KOL marketing.
Rising popularity of pet KOLs
China is one of the countries where the number of pets has been growing fast: it is estimated to grow by 18% annually before 2024. And Gen Zs are the majority of the pet owner population. The culture of pet humanization, which refers to the idea that owners consider their pets as family members, makes pet-related content increasingly attractive to young Chinese people. Thus, the KOL marketing strategy in China can also leverage such a trend by collaborating with animal influencers. Compared to human KOLs, these furry celebrities are less likely to create PR crisises and more able to have positive interactions with their followers. They are also capable of reaching a huge number of audiences. For example, one of the most famous Weibo animal KOLs, @回忆专用小马甲, created by the owner of a cat and a Samoyed, has more than 40 million followers. Some brands have already noticed the potential of pet influencers. Perfect Diary, a Chinese cosmetic brand created an eyeshadow palette featuring the image of LI Jiaqi’s dog. 300 thousand collaborative products were sold within several seconds after the launch.
Influencer marketing is indispensable in China to attract and connect with local consumers, especially the Chinese Gen Zs. However, they are also highly sensitive to political and social issues. “Cancel culture” is very strong in China. This means people tend to not only boycott to express their disapproval of companies’ decisions but also comprehensively attack the brands to ruin their interests on a larger scale. Companies must conduct deep investigations regarding culture, politics, and consumer behavior before implementing KOL marketing. Moreover, brands need to bring their own value to clients while leveraging the popularity of celebrities in order to avoid being over-dependent on the Chinese influencers. By doing so, corporations can lower the risk of PR crisis and still be attractive for the Chinese consumers.
