The KOL phenomenon is particularly impacting the fashion and beauty industries. For example, one Weibo (Twitter-like social media) hashtag activity hosted by SK-II in 2018 attracted a great amount of views and discussions, by involving several KOLs (most of them were TV stars). By the end of February 2019, this activity had received 200 million reads and triggered 1.78 million comments, and the engagement was initiated and led by the stars’ fanbase at first, then spread to the general online population. To provide a comparison, another hashtag activity by SK-II that was not powered by KOL marketing triggered only 21 thousand comments.
In China, KOLs Are A Sales Vehicle
Source: TopKlout, Battaglia Advisory Services
A major difference that makes influencer marketing in China different from other markets is that in China, KOLs have been an effective tool for brands to boost sales especially when promoting new products.
Take Li Jiaqi, one of the most popular fashion topic live streaming hosts, with 20 million followers, as an example. His most noticeable achievement was selling 15,000 lipsticks within five minutes, by trying different colors of Mac, YSL and Tom Ford himself through Tmall live streaming on last year’s 11.11 shopping festival, achieving a total 3.53 million RMB sales (~450k EUR) through his live stream channel in 6 hours. With such measurable influence, many brands seek cooperation with KOLs like him, sometimes by allowing for significant price discounts. Accordingly, consumers follow his purchase recommendations not only because they believe the products are good, but also because the price they get is lower than the brands’ official online flagship store.
Source: 36 Kr, Battaglia Advisory Services
What Contributes to KOL’s Effectiveness
So, what makes KOLs so effective as a sales channel? Based on our research, we conclude 2 major reasons explain how the “KOL Economy” came to be:
- Integration of the benefits of all stakeholders;
- Mobile penetration means consumers are never offline;
Integration of the benefits of all stakeholders
As per our previous article, within the consumer decision journey KOLs play a key role in stimulating and amplifying the information exchanges, both among consumers and between brands and consumers. They are at the same time gatekeepers and loudspeakers for information.
The Critical Role of KOLs
Source: TopKlout, Battaglia Advisory Services
The benefits of cooperating with a KOL are not limited to converting the KOL’s own followers into consumers for the brand; more importantly, brands can often initiate a positive communication with consumers. Follow-up contact is thus easier to be generated, as KOL’s followers are more likely to participate in and discuss the endorsed products on social media. Particularly, this communication is built upon the perceived reliability of the KOL instead of the brand itself.
Further, many KOL’s followers are keen to buy the same products worn by the KOL, and in many cases, top-selling apparel items on e-commerce are often the ones associated with the keyword of “same product as seen on XYZ” (where XYZ is the name of a KOL).
Mobile penetration means consumers are never offline
Chinese consumers are more online-oriented and becoming more accustomed to going online using their mobile phones, including e-commerce as their first shopping option. As a result of this “mass migration” onto mobile constant connectivity, KOLs became inevitably very influential by being able to reach more consumers when promoting products on social media.
Average Hours Spent on Mobile per User per Day
With such high mobile usage stats, the total GMV of mobile e-commerce in China reached 4,637 billion RMB in 2017, accounting for 70.8% of the GMV of the total e-commerce. This trend is estimated to continue, in terms of the total GMV and percentage of mobile e-commerce.
Summarizing our articles, brands should be aware of the following key facts:
- Overall e-commerce environment is booming in China, with remarkable growth in the mobile e-commerce segment. This provides a large, growing and online-oriented consumer foundation for brands to reach.
- What’s more, KOLs are perceived as the most effective marketing tool currently, as they are often considered to be reliable and knowledgeable, and thus have a group of active followers who are willing to pay for the products endorsed and even to promote the product on their personal social media to trigger further reach for the brand message.
However, “engaging KOLs” is not a packaged solution. Engagement channels can be very different and the landscape is, as most often in digital China, a moving target. Brands must pick the right platforms to promote, based on specific product positioning and target consumers.
In our next article in the series, we will discuss more about the uniqueness of different platforms and how to choose the proper place to be.