How to work with KOLs in China

In recent years, KOLs have become a phenomenon in China. A KOL in China, known as an influencer in western countries, refers to a person, organization, or community who creates high-quality content on social media and has a group of loyal followers (ranging from thousands to millions) engaging with them. Baidu Index shows remarkable growth of searches of KOLs on Baidu from 2011 to present.

With the rise of social media, KOLs have a significant impact on followers’ lives and consumption habits by providing more authentic and trustworthy content in a manner that maintains a more intimate relationship with the general public. By working with KOLs, brands are able to raise brand awareness, improve engagement and ultimately drive sales. However, the fragmentation of Chinese social media and a large user base have brought great challenges to marketers. Given the unique Chinese social media landscape, it is essential for brands who want to penetrate China’s market to understand how they can really leverage the power of Chinese KOLs.

In this regard, this article will provide some insights into KOLs and how KOL marketing can be used in China for companies that are interested in implementing KOL marketing in China.

1. Segmentation of KOLs

The KOL search engine and monitoring platform, Robin8, divided Chinese KOLs into three segments, namely 1) big celebrities, 2) Wang Hong, self-media, and industry experts, and 3) micro-influencers and KOLs to be uncovered. The total market value of all three segments is expected to reach 52.2 billion RMB in 2021.

Top segment – Big celebrities

The top segment is top-notch celebrities who have gained fame in the industry for quite some time such as famous actors and singers. This segment has the highest charge – ranging from a few million to tens of millions RMB for a single endorsement. The average fee of big celebrities in 2016 was 5 million RMB and is expected to reach 10 million RMB in 2021.

Middle segment – Wang Hong, self-media, and industry experts

The KOL middle segment includes Wang Hong, self-media, and industry experts who make about 1 million RMB on average. The term “Wang Hong” (网红), which means Internet Celebrities in Chinese, is often interchangeably used with “KOL”. However, the two concepts are not exactly equivalent. Marketers need to be aware of the different subject to local culture if they want to find the right influencer.

The phenomenon of Wang Hong started when self-media was booming and younger people got fame by expressing themselves, meanwhile, e-commerce called for innovative endorsement, especially in the fashion and beauty industry. Therefore, Wang Hong originally referred to young good-looking men and women working as hosts on social media and video live streaming platforms.

Now Wang Hong has a broader meaning. Some self-media or industry gurus known for their skills, talent and speciality in one field, such as professional gamers, entertainment content creators and beauty/fashion bloggers are also called Wang Hong. According to Kantar China Social Media Impact Report 2017, Papi Jiang (Papi酱), the entertainment video creator, is the No.1 social media KOL.

Another type of Wang Hong is e-commerce-driven. They are owners of e-commerce stores and by posting their styles of fashion and beauty, they aggregate loyal fans and promote their business. Zhang Dayi (张大奕) is the benchmark in this category. She runs four clothing shops on Taobao, China’s largest e-commerce platform and the total sales value reached one billion RMB in 2017. This segment contains about 10,000 people with an expected total worth of 10 billion RMB in 2021.

Bottom segment – Micro-influencers, potential KOLs

The bottom segment consists of micro-influencers and ordinary social media app users to be uncovered as KOLs. There are about one million KOLs in this section, but the future potential is large with 206 million ordinary social app users as potential KOLs. Although micro-influencers have fewer followers (a few thousand to tens of thousands), they have their own strengths that powerful KOLs cannot compete with in terms of reaching a niche group of people, bringing more interactions and building a closer relationship with them. When working with KOLs, more and more brands have started to attach importance to micro-influencers, as they become more mature and stop using the number of followers as the only criteria. In 2021, micro-influencers are expected to create 41.2 billion RMB in total.

2. Software to assess the quality of KOLs

As each brand has its own unique needs when launching KOL campaigns, KOL’s selection criteria may vary, which requires customized KOL marketing solutions based on different customer needs. The entire process from data collection to analysis to output have to be customized by combining industry data and company data, designing targeted assessment indicators and producing customized evaluation results. Faced with enormous information of channel resources and a marketing environment that has been constantly changing, it is uneasy to realize precise and effective KOL marketing.

Below are some KOL search engines and KOL monitoring platforms that can help brands choose the right KOLs and develop KOL marketing strategies.

• KOL store: https://www.kolstore.com

KOL store is the product of Micro Dreams which is a leading one-stop service provider of integrated marketing solutions on mobile devices in China. KOL store is a precision KOL advertising platform that has gathered hundreds of thousands of KOL resources across various social media channels, such as Weibo, WeChat, live streaming, short videos, etc., It has a wide coverage of industries including entertainment, film, fashion, music, technology, Internet, finance, sports, O2O and e-commerce and has served over 50,000 clients, including big companies such as Alibaba, Auto Home, Blue Focus, IQIYI as well as SMEs.

KOL store has built its self-media value index called KolRank through social influence and self-media advertising transaction data analysis. It has realized data collection and analysis of over 200,000 self-media accounts with high comprehensive strengths to show their communication value, brand value and investment value.

• MyPrad: https://www.myprad.com

MyPrad created an online platform for marketers to communicate with self-media directly without intermediary fees of massive media resources. The platform is currently only open for PR, advertisers and self-media. The platform collects all types of self-media resources and helps marketers select the favored accounts and establish a connection with them quickly based on reading volume, likes, reposts and labels. MyPrad aims to improve efficiency and reduce the cost for marketers by solving problems like information asymmetry, slow response and high price when they look for KOLs. It has worked with many big brands such as Tencent, Baidu, Meituan, China Unicom, JD, and Wanda Group.

• PARKLU: https://www.parklu.com/zh-hans/

PARKLU is China’s premier influencer marketing platform. With over 20,000 influencers across 11 social media platforms, PARKLU offers a combined reach of more than 550 million Chinese customers. Their influencers specializing in fashion, beauty, F&B, travel, parenting, health & fitness, home & design, and so on. It has curated China’s top content creators in one place and added comprehensive, real-time campaign tracking software. PARKLU has connected leading fashion and e-commerce brands, from Fortune 100 companies to independent labels, with top long tail influencers. Their clients include Macy’s, Blue Nile, TRIWA, Swire Properties, The Outnet, Lululemon, etc.

• Robin8

Robin8 is a leading influencer marketing platform in China and KOL search engine that enables profiles, ranks and match with brands by using big data and Artificial Intelligence system. The automation system provided by Robin8 can realize data tracking and management, improve transparency, have third-party verification of digital marketing and measure e-commerce results. Based on automated KOL profiling, the platform designs KOL campaigns that match the subject, including content creation and reposts by KOLs on social media and inviting KOLs to attend offline events for promotion. Robin8 has profiled over 23 million influencers and executed over 900 influencer campaigns. Their clients include Starbucks, Porsche, Furla, Unilever, JD Finance, English First, etc.

3. Platforms used by KOLs to leverage their audience

There are several key social media platforms used by KOLs. To leverage the power of KOLs, markers need to know the advantages and limits of these platforms so that they can choose the right platform.

Weibo

Weibo, developed by Sina, is a micro-blog platform equivalent to hybrids of Facebook and Twitter in the west. Users can share opinions, interests and daily routines through Web links or mobile applications.

Advantages:

• Broad audience

Weibo has a widespread audience as the most open social media platforms in China. The target audience ranges from under-age children to the elderly. KOLs have a huge fan base on Weibo which is a large potential for economic return.

• Diversified content

Weibo provides diversified content. Followers can find their beloved movie stars, admired political figures and even respected leading companies and brands on Weibo. Also, Weibo has provided flexibility in posts formats which include links, videos, live streaming and music. Weibo’s content contains more variety and it elevates users’ experiences to another level.

• Quality of interaction

Weibo has a high quality of interaction, as it depends on interaction to increase user stickiness and impact. KOLs rely on followers’ fast responses, and with more and more followers’ responses, a multiplier effect can be achieved.

Limits:

• Originality

The originality and copyrights cannot be assured. KOLs’ contents can be easily copied by anyone, and the content can be uploaded again by others.

• Followers are not faithful

Weibo now has a lot of restrictions and it became harder for KOL to reach their faithful followers. Weibo’s algorithm makes users ‘follow’ KOL pages that they are not truly interested in, thus many followers are not loyal to the KOL.

WeChat

WeChat is designed primarily as a messaging tool, and the WeChat public account is the branch of the WeChat platform. It uses the public account platform for self-media activities, which is simply a one-to-one media activity.

Advantages:

• Network and reputation effect

The network and reputation effect of the KOL in WeChat becomes stronger with more users sharing the posts and the KOLs’ WeChat public accounts. The development of WeChat is based on the interaction between real-life acquaintances. The more the users, the wider the spread of the influences.

• Precise positioning advantage

WeChat public accounts are only available to users who subscribe to them. Therefore, KOLs can focus on their target users and provide contents that satisfy their demands. Instead of creating random posts, WeChat Public account limits its daily posts choice to only one time.

• Data analysis

WeChat provides comprehensive data analysis tools to the WeChat public account users. KOLs can access the data and make data-driven decisions by themselves. Comparing the daily views and new subscriber number, KOLs can identify customers’ interests and provide more customer-oriented contents.

• WeChat stores and WeChat mini-programs

WeChat store (微店) and WeChat mini program (小程序) allows KOLs to build their e-commerce platforms within WeChat, which makes reading, purchasing and payment a whole system. The convenience of the seamless service provided by WeChat will encourage more engagement.

Limits:

• Limited audience

Given WeChat is a rather private social media platform, only reaches a limited audience. The number of subscribers can hardly rise in a short time and the content of the public account only attracts a certain customer base.

• Limited promotion approaches

For KOLs, it can be hard to launch different promotion approaches given the private nature of WeChat. On Weibo, people like to repost to take a lucky draw, but on WeChat, users hardly see any lucky draws posts in friend circle. People are concerned about their reputations and personal images.

• Less user interaction

For every WeChat public account post, only a few selected comments are shown to the public. The comments are selected by the KOLs and people seldom write comments because of privacy concerns. The user interaction with the account’s owner in WeChat is limited and less common than it in Weibo.

Douyin (抖音)

Douyin is a social media platform that allows users to create video clips or music videos on the application. It is a video clips community that focuses on the young generation.

Advantages:

• Low entrance barrier and switch costs

The low entrance barrier makes it easy for KOLs to learn and the switch costs is relatively low. Douyin’s form of content is only limited to video clips, thus it is easy to use and does not require any professional training.

• High Interface interaction

Users can view contents more efficiently and can absorb more information in a short time by swiping it up and down. It gives KOLs more chances to reach out to new followers.

• Creative content

The rise of Douyin relies on the creativity of contents. In order to seize users’ attention in only seconds, KOLs in Douyin put more thoughts on the quality of the contents. Brands and companies like to put advertising campaigns on Douyin because of the novelty of the video clip.

Limits:

• Limited content forms

Douyin focuses on only one content form, video clips. This strategy has helped them to gain an exclusive loyal audience and on the other hand, also limited their development. Users are not satisfied with the single content form and get bored quickly.

• Low-end target market

Profile of Douyin users show that more than half of its users did not go to university, and the proportion of users with monthly income of more than 8,000 RMB only accounts for 14.7%. The target market of Douyin is in the low-end segment, which contributes the fact that not a lot of luxury brand has used Douyin to promote, making it harder for KOLs to diversify its target market.

DOUYU TV (斗鱼TV)

There are many live streaming platforms that focus on different aspects in China now, and the most popular live streaming platform is DOUYUTV that is a bullet-screen live streaming website. DOUYUTV covers a variety of live content such as entertainment, sports, outdoor and so on. However, it is mainly based on game live streaming, so the most KOL on DOUYUTV are in the e-sports industry.

Advantages:

• High economic profit

The economic profit can be a large amount in live streaming. The annual salary for famous anchors on DOUYUTV can be round 30,000,000 RMB, which is a big motivation for KOLs to appeal to more audience.

• Focus on e-sports

The focus of the platform is explicit, which matches KOLs with audience perfectly. Users who have interests in e-sports can be loyal to some anchors because the content is exclusive on the platform.

• High customer stickiness

DOUYUTV does well in functions, fluency and articulation, so customer stickiness is high. KOLs can get inspiration from the audience loyalty.

Limits:

• Negative performance on the platform

Since there are profits on the platform, people may do anything for profits. For example, some anchors may verbally attack other anchors.

• A narrow range of audience

The live broadcast users are mostly male, young and low-income, and concentrated in first- and second-tier cities. Students and freelancers are the main players.

• User retention

Content can be monotonous and lacks new ideas, so the retention of users can hardly be improved.

Xiaohongshu (小红书) – Little Red Book

Xiaohongshu is a social community for sharing shopping experience, lifestyles and product recommendation as well as a cross-border e-commerce platform that retails luxury, beauty and fashion products.

Advantages:

• Encouragement of UGC (User Generated Content)

Xiaohongshu is committed to creating a social community that encourages UGC of shopping experience. The decentralized community is conducive to foster user engagement. KOLs can be motivated to create articles of good quality. It can be found that many celebrities update their pages frequently.

• Medium to high-end user positioning

The target users of Xiaohongshu are young women who are positioned to have medium to high spending power. KOLs can turn it into high commercial value.

Limits:

• Fake users and advertisements

As the popularity of the platform increases, the number of fake users and advertisements also increases. The experience of the users may be affected so that customer stickiness may decline.

• A shift of focus

As Xiaohongshu is shifting from sharing community to e-commerce, the focus may change. However, the core of Xiaohongshu is still sharing.

Bilibili

Bilibili is a video website with the most up to date episodes, the best ACG (Animation, Comic and Games) atmosphere, and the most creative uploaders.

Advantages:

• Wide content coverage

The content coverage on Bilibili is wide, including ACG, games, life, fashion, entertainment etc. Continuously optimized recommendations will make users feel intimate and improve user stickiness.

• No advertisement before videos

There is no advertisement before videos, which is the biggest difference from other video websites, which is good for user retention.

• Focus on ACG

The platform is focused on ACG, therefore is good for ACG content creators, which also differentiates it from other platforms.

Limits:

• A narrow range of users

The user group is narrow with an average age of 17 years old and 75% are under 24, which set restrictions on KOL’s range.

• Limited ways for economic return

The ways for KOLs to make money on Bilibili is also limited compared to other platforms, which may reduce motivation for KOLs to use this platform.

4. Successful examples of working with KOLs

• Bags x Tod’s

Liang Tao (梁韬), well-known by the name Mr. Bags (@Bags包先生) on Weibo, has become a legend in the KOL industry by a series of successful deep cooperation with luxury fashion brands. According to the latest The Shopping Guide released by Exane BNP Paribas, Gogoboi, Mr. Bags (@包先生) and Becky (@黎贝卡的异想世界) are the top 3 influencers on actual purchasing decision-making on WeChat.

On June 26^th this year, Mr. Bags launched his limited-edition bags collaborated with Tod’s on his WeChat mini program store called BAOSHOP (包铺). It’s the first time a luxury brand adopted the WeChat mini program channel to sell its blogger collaboration products, and the performance was incredible. 300 collaboration bags (price is 10,800 RMB) were sold out in one hour, demonstrating the strong power of the top KOL in luxury industry. The rest 200 bags were sold in several offline stores a few days later.

WeChat Index of Mr. Bags and Tod’s in the past 90 days (from April 12th to July 10th 2018) shows significant insight for the collaboration. The overall index of Mr. Bags is much higher than Tod’s. Both of the indexes reached a tremendous peak on June 26^th when the collaboration was launched. The daily growth rate on June 26 has reached 389.58% and 245.46% respectively for Mr. Bags and Tod’s, indicates a substantial buzz on WeChat.

It’s the second time Mr. Bags worked with Tod’s to produce a collaboration bag and last year the 200 limited-edition bags were also sold out within hours. He has also collaborated with Givenchy, Longchamp and Strathberry, which all turned out to be very successful. The collaboration allows the blogger to take part in the design and have control as a partner, which is an extremely rare opportunity even for western bloggers.

Why do luxury brands trust the Chinese blogger so much and how did the successful collabs happen?

• Community of bag fans (包粉)

By specializing in luxury handbag recommendation, the 26-year-old handbag guru has formed a niche online community of luxury handbag buyers by his 3.52 million followers on Weibo. By leveraging Mr. Bags’ connection with its followers, brands are able to reach to and the target consumers more effectively and satisfy their needs more specifically.

Mr. Bags gets to know what his followers want by asking followers opinions and doing research based on the follower data profile. From an interview, he learned that fans want special collaboration instead of mass production. The collaboration bag is designed with a dog-theme for the year of the Dog in China, which successfully combined Tod’s classic style with Chinese elements specially for Chinese fans.

• Viral advertising

In addition to Mr. Bags’ WeChat, Weibo, and Xiaohongshu, Tod’s also advertised the collaboration and sales channel on its official social media account with a lot of pictures and videos.

Many celebrities also posted pictures of them carrying the bag on Weibo to create buzz about the collaboration, including Liu Wen (刘雯), Ju Xiaowen (雎晓雯), Gu Linazha (古丽娜扎), etc.

• Use of WeChat mini program

Instead of other channels, they made a new attempt to sell the collaboration bags on Mr. Bags own mini program store. The store is not like a regular e-commerce platform that sells products regularly. Mr. Bags wants to build an online pop-up store that sells either Mr. Bags capsules or limited edition so that he can provide a better shopping experience for his fans in terms of convenience and a sense of happiness. In addition, the mini-program has a very close connection with the official WeChat account, which allows reading, purchasing and payment to become seamless and can serve consumers better.

• Daniel Wellington x micro-influencers

Before the entry of China market in 2015, the Swedish watch brand went viral on Instagram, YouTube, Facebook and Twitter by inviting celebrities and influencers on social media, especially a large number of micro-influencers, to advertise the watch. The brand copied the same marketing strategy in China, which also turn out to be very effective. The young brand Daniel Wellington was founded in 2011 by Filip Tysander with only $30,000 capital. Without sufficient marketing budget, the brand started the advertising by reaching out to those micro-influencers on social media and giving them the watch for free as long as they would post an ad wearing and recommend the watch. Depending on the size and influence power of the influencer, the brand would also provide some commission, which saved a lot of marketing budget compared to traditional marketing. Even though micro-influencers have ra elatively small number of followers, Daniel Wellington still got a lot of exposure when hundreds of influencers are pushing the same brand at the same time.

Beauty blogger @BunBunBunBunBunny has 340K followers on Weibo currently and she posted an ad of Daniel Wellington in 2017 providing a discount code and a DW watch giveaway
Source: Screenshot of @BunBunBunBunBunny on Weibo

How does the micro-influencer strategy work for Daniel Wellington specifically? How does the exposure by micro-influencers effectively turn to direct sales?

• Affiliate marketing on Weibo

Affiliate marketing is a marketing strategy where a brand finds affiliates to promote the product and pays them commission based on the sales they drive. To leverage the power of small KOLs on Weibo, Daniel Wellington provides an affiliate marketing program to them. The brand gives each KOL their exclusive discount code. When followers use the code, the brand can calculate the sales each KOL brings and pay commission accordingly. Affiliate marketing is an

an effective way of leveraging KOL influence for the brand in several ways. Firstly, it helps the brand to reach to a wide range of target customers by targeting KOLs. Secondly, it brings KOL influence with sales performance directly. KOLs are motivated to drive more sales and the performance-based commission is very cost-effective for the brand.

• Micro-influencers and the brand positioning

Daniel Wellington watches are designed with a classic minimalistic style with price from 990 to 1,380 RMB. The way Daniel Wellington positions itself is a perfect fit for the micro-influencer marketing strategy. The micro-influencers on Weibo selected by the brand usually are fashion, beauty and lifestyle bloggers who have followers with the same taste and interest. Those followers usually are post-80s and post 90s generation consumers of fashion trends with certain purchasing power, which is exactly the target market for Daniel Wellington. Although small KOLs have fewer followers than celebrities, they are able to foster the engagement that big influencers can’t achieve. Smaller KOLs usually are focused on vertical niche segmentation, which allows them to build a closer relationship with followers. On top of that, Daniel Wellington presents a quality lifestyle by asking affiliate KOLs to post pictures of themselves wearing the watch in real-life settings, such as travelling, dining, and spending time with friends and family, to make the product part of life and make the product close to consumers.

5. Failures of marketing with KOLs: threats and limits

However, marketers need to be aware of the threats and limits that could cause failures of KOL marketing, including low ROI and negative social media impact generated by KOLs.

• It is possible for those well-known, mature brands to drive sales directly from KOL marketing owing to the customer awareness and trust that have been built over time. However, it can be a challenge for startups in China to achieve direct sales by using KOL campaigns. It is unrealistic for them to expect that KOL marketing can bring sales conversions and dramatic ROI immediately. The use of KOLs should be aligned with the brands’ overall business strategy and help generate awareness and trust before driving direct sales. According to research conducted by PARKLU, startups in China usually receive sales in 1 to 3 months after implementing KOL campaigns.
• When it comes to luxury brands, they tend to consider KOL marketing as an easy way of delivering standard content via channels of KOLs instead of real cooperation. Followers may find it very hard to resonate with the brand-controlled content that is specific to the captions, photo filters and the time to post. Brands should foster high-quality cooperation with KOLs to produce organic content that communicates the brand’s message and drives followers’ engagement at the same time.
• The 2017 KOL Marketing White Paper by Admaster shows KOL market and KOL price has been growing rapidly but also reveals that about 69% statistics were “sugared up”. Marketers need to be careful of fake KOLs who hire Shuijun (水军) or Zombie Fans (僵尸粉), which means fraudulent followers, to fake up engagement statistics on social media. If marketers work with a fake KOL, the money spent is wasted. Unilever recently announced that it refused to work with influencers engaged with fraudulent behaviour and that it would work with platforms that take strong measures against fake influencers. The announcement aims to improve the credibility and transparency in influencer marketing, strengthen the brand’s ability of influencer measurement and provide a better experience for consumers.
• KOLs’ behaviour and words are not controllable and predictable for the brand. When choosing a KOL, brands choose to associate the brand image with the KOL’s personal image. If a KOL’s image becomes negative, the associated brand will inevitably be under scrutiny

6. How much does it cost to work with KOLs?

The cost of working with KOLs varies depends on the scope and form of cooperation as well as the influence and followers’ quality of the KOL.

There are several commonly used KOL marketing methods: affiliate marketing, sponsored posts, collaboration products, marketing campaigns, gifts and events.

• Affiliate marketing

As mentioned earlier, affiliate marketing is a performance-based method to pay KOLs commissions. KOLs can register to be affiliates or companies can provide affiliate programs to KOLs. Customers driven by affiliate links can bring corresponding commission fees to KOLs. However, with the restrictions of external links on Weibo, the exposure of a post containing affiliate links can be reduced or even prohibited. Therefore, some KOLs choose to post affiliate links in the comment section or use an exclusive discount code to avoid the exposure penalty. It’s a great way for brands to measure the influence of KOLs and for KOLs to make money by being the advocate of brands they genuinely love and support.

• Sponsored posts

Sponsored posts are the most common way for KOLs to make money and works very well on social media platforms. Sponsored posts can be asking KOLs to post the content fully created and controlled by the brand or can be asking KOLs to co-create the content featuring the brand or the product in their own styles. Followers may question sponsored contents and thus influence the credibility and authenticity of KOLs. It’s important that the sponsored posts are transparent and a good fit for both KOLs and the brand. Also, KOLs need to balance the sponsored posts with organic posts to maintain its relationship with its followers.

• Collaboration products

Like Mr. Bags x Tod’s, collaboration products usually happen when the influence of the KOL is really significant and can be turned into high sales conversion rates. The collaboration can benefit both parties. Brands can leverage KOLs’ insights into their community and KOLs’ influence will go up to another level. KOLs have grown to be not only a promotion channel but also a sales channel.

• Gifts

Gifting is a way to reduce KOL marketing budget and nurture relationship with KOLs. Giving KOLs products as gifts improves the possibility of the product being used, reviewed and recommended by the KOL. Another way to use gifts is giveaways, which is very popular on Weibo and WeChat. Posts involves a giveaway campaign usually require followers to repost or some other types of engagement, which could draw people’s attention on the product or brand and encourage them to actively take part in the engagement for free products.

• Events

Brands may also invite KOLs to attend online and offline events, such as webinar, live streaming, product launch, fashion show, and event hosting, etc. Having KOLs on events can be costly as these KOLs usually are very influential, but this kind of cooperation can build a deeper relationship with KOLs and can create buzz about the brand or product on social media.

Cost of working with KOLs:

According to the 2017 KOL Marketing White Paper released by Admaster, 63% companies chose to put the emphasis of their social media marketing in 2017 on KOL marketing, which ranks the highest among all the categories. 2017 KOL Marketing White Paper also revealed that the average price of KOLs on Weibo and WeChat in 2016 went through a rapid growth. The average price of KOLs on Weibo and WeChat in Q4 increased by 182% and 110% respectively compared to Q1. These trends indicate increasing KOL investment in social media marketing.

PARKLU has developed a KOL budget calculator based on aggregated KOL average price. The calculator above shows the estimated budget and impression on Weibo calculated by data on March 31^st 2018. Real-time prices may vary. The calculator divides KOLs into four categories, namely top-tier, mid-tier, micro and long tail.

Top-tier: Famous and recognizable KOLs whose content truly influences the masses. One post costs 30,000 RMB and creates 1 million impressions.

Mid-tier: Generally well-known KOLs in their industry who have a significant impact with core followers and beyond. One post costs 10,000 RMB and creates 560,000 impressions.

Micro: KOLs in a niche area of interest with a small but robust following. Great for more targeted campaigns. One post costs 6,000 RMB and creates 200,00 impressions.

Long tail: KOLs who just start out or content creator hobbyists. One post costs 3,000 RMB and creates 50,000 impressions.

7. KOL marketing in the B2B industry

Besides the KOL fever in the B2C industry, KOL marketing is also used in B2B industry. B2B (business-to-business) marketing involves the sales of one company’s product or service to another company. Although B2B marketing techniques are almost similar to consumer marketing, they are executed in a unique way because they put more emphasis on brand, price and potential return.

The current hotspot in the B2B marketing world is to find new approaches to foster relationships through social media since social media platforms can build communication between businesses. KOLs can be effective and achieve the degree of relevant awareness if they post content on social media accounts to boost brand’s visibility.

An iQIY(爱奇艺) case study

Yu Gong (龚宇), CEO of iQIY (one of the largest Chinese video website) launched the AI (artificial intelligence) products in 2017. These AI products can provide services to movie firms, entertainment firms and even firms in other industries. To drive immediate awareness, iQIY used KOLs as the spokesmen or the partners of their strategy. In the 2017 iQIY’s AI World conference, 20 KOLs from home and abroad were invited to give speech, such as Tuomas Sandholm, Alex Smola, Chris Rowen, Daijun Zhang, Xing Tang etc. They are well-known CEO, inventors, investors, professionals or leaders in AI industry, which appeals to many business partners.

However, in 2018, in addition to experts in the industry, more KOLs, like movie stars and singers, are also invited to try the latest products, which lead to the hotspot discussed on social media, such as Weibo. The combination of the leading experts with pop stars may seem to be unusual, but it did have a dramatic influence.

Video view on iQIY increased threefold between 2017 and 2018, partially due to the KOL program to attract large awareness on social media. It can be inferred that using more KOLs can make more influence. But the most important factor is using the right KOLs. Although the company wants to be developed into a technology firm, the essence of iQiY as an entertainment firm can be hardly shifted. Therefore, the choice of iQiY KOLs combined both the entertainment side and the experts’ side, which leads to a better result.

8. The future of KOL marketing in China

• Crackdown on fake KOLs

In the future, fraudulent behaviours of KOLs will be controlled more strictly. When marketers choose a KOL to work with, in addition to basic data like reposts, comments, and likes, there will be more sophisticated indicators for assessing a KOL, including interaction level, interaction tendency, reposts hierarchy, click conversion rates, and so on.

• The era of social videos

With the rise of short videos and live streaming, KOL marketing has entered an era of social videos. A large number of users has shown great purchasing potential that can be leveraged by KOL marketing.

• Vertical KOL platforms and vertical KOLs

KOL platforms have become increasingly vertical, as well as KOLs themselves. For example, Xiaohongshu (小红书) has built a huge word-of-mouth community by a large number of users’ product/service/experience review and recommendation. More and more brands will turn to vertical KOLs as they are more professional in one area with more targeted followers.

Daxue Consulting can help you get the best of the Chinese market:

Daxue Consulting assists overseas clients by designing comprehensive and data-driven strategic action portfolios, business models as well as business projections.

If you want to know more about China market strategy, do not hesitate to contact us at dx@daxueconsulting.com