Event Insights: Key Opinion Leader (KOL) marketing in China
On Thursday 7 March, 2019, we held an interactive panel discussion on Key Opinion Leader (KOL) marketing in China, in collaboration with Global Victoria in Melbourne.
The discussion, moderated by our China Practice Director, Nick Henderson alongside panellists Zuo An Xiao, Key Opinion Leader, Jing Zhang, Senior Culture & Fashion Correspondent, South China Morning Post and Katie Pratt, Founder & Designer, ELLIATT provided Australian fashion businesses with a comprehensive overview into building brand awareness and effective KOL marketing campaigns in China.
Some of the key insights from this event are below:
What is a KOL?
A “Key Opinion Leader”, or an "influencer", is a trusted person who has expert product knowledge and influence in a respective field. KOLs are an important part of fashion marketing and commerce in China, given the rise of highly integrated social media and e-commerce platforms.
The reason that KOLs, or celebrity influencers are so powerful in China, is that there tends to be a lack of trust in the Chinese consumer market. Word of mouth has become a critically influential means of providing trustworthy information straight to the consumers. This is particularly so when famous influencers, with a large follower base, share information or insights into products and brands. Consumers/followers connected to these KOLs feel a sense of community and there tends to be an implied trust that the information shared is reliable.
Zuo An Xiao, Key Opinion Leader described KOLs as more than just a one-off sales tool: “KOLs are business partners, they are PR, and of course we really work together with the brand from a very early stage.”
“One picture never works, relationships over time is what we are really looking for. Consumers want to be a part of the story; our role is to help them build a history and build a story to grow up together.” Zuo An Xiao, Key Opinion Leader
KOL Marketing in China – How does it differ?
Chinese social media and KOL bloggers are more powerful in terms of marketing and sales than their Western equivalent. Why? Because China’s social and technological landscape is far different to Western markets.
Jing Zhang, from the South China Morning Post shared: “If you are selling directly to China, the platform is very important. You need to have versions of your website in Chinese and integrated payment platforms like Alipay or WeChat pay to succeed. China is mostly cashless now, we purchase everything from Taxi’s to food via payment apps. I can buy an onion from the street and I pay it with my phone. Having that tech and the platform to accommodate that transaction is vital."
In addition, Chinese consumers tend to be receptive to being sold products via social platforms. On one hand, they enjoy the entertainment element of KOL marketing, and on the other hand, they want their favourite bloggers to help them discover new products. In China, social media and e-commerce platforms are much more integrated into each other than the West, effectively blurring the line between entertainment and purchasing.
Research shows that 70% of Chinese Gen Z consumers (or those born after 1995) prefer buying products directly via social media than other channels. The global average is 44%. – Accenture
What are some of the new trends?
Live-streaming is gaining popularity, fast. Live-streaming is utilised by KOLs to entertain and build rapport with consumers. Both Taobao and JD have integrate live-streaming into their marketing campaigns in order to push e-commerce sales. However, this method isn’t just open to the larger companies, with many smaller brands utilising live-streaming as a cost-effective option to build their brand’s reach, and connect with consumers in a way that static posts cannot achieve.
Jing Zhang, South China Morning Post, highlighted that more and more Chinese and global brands are turning to live-streaming internet platforms to expand their reach and generate higher sales in China. It is common for consumers to comment and shop as they are watching broadcasts.
Sharing an anecdote, Jing revealed: “Live-streaming integrated with sales is something that is quite unique to the China space, because I don’t really see it anywhere else…I had to get my friend who owns this store, it’s a pre-loved vintage store, to show me exactly what she does and how she sells online. Her show was with an iPhone, through WeChat in the stock room of her shop and she is just putting on clothes talking to the camera for two hours…It was just remarkable. After that first show you could see the sales coming through, people could buy online, people could comment, there is just this absolute immediacy. I think live-streaming has just boomed in China and it isn’t just the smaller brands who are doing this.”
Read Jing’s article via the South China Morning Post on this topic here
“Key technology and technological developments are changing the retail landscape in China. I think for brands who want to impact that space and learn from that you need to have local knowledge and on the ground knowledge. As the scale of live-streaming is not common knowledge.” Jing Zhang, South China Morning Post
What are the costs associated with KOL marketing?
Depending on the platform, the costs can vary significantly. Variables include the number of average views, followers, platforms, and posting times. In addition to an outright fee, some larger KOLs will charge a commission of the sales they have directly driven for your brand. Unsurprisingly, the larger the KOL, the more expensive the cost.
A suggestion from Parklu, China’s premier influencer marketing platform: “Ultimately, brands are working with KOLs not just for the sale, but they may want branded content or community growth, or there might be multiple objectives to what they’re trying to achieve. Obviously, marketing is aimed at eventually leading to sales, so it takes consistency through working with KOLs every month, looking at the data to see what works and then understanding the context.”
“As a new brand, it is really important to collaborate with other brands and share the cost, so that it is not such a huge investment. Secondly, tie in other things you are doing in other markets such as a big event and use KOLs for that, so that you can use the content more widely. We have maximised our exposure at global events, by bringing KOLs to wear Elliatt and post about the event – we have done this for New York Fashion Week and Shanghai Fashion Week.” Katie Pratt, ELLIATT
How does a KOL impact on sales?
The challenge with using KOLs for fashion marketing is how to measure impact and effectiveness. Measuring the success of an influencer campaign is a more complex thing than just number of sales. The panellists indicated that businesses need to look just beyond “click through rates”, media value, conversion rates and sales values to the KOLs ability to interact with a potential shopper, at all points of their customer journey. It is important for Australian brands to understand that engaging a KOL is a long-term investment and commitment.
Things brands need to consider when measuring KOLs impact
According to Parklu, Chinese consumers will typically go through 8 touchpoints before purchasing a product (compared to just 4 for Western consumers). This means that one touchpoint cannot lead to a purchase. They might get inspired from a KOLs post on WeChat but not necessarily buy it. Once they are inspired, they often go to other platforms to see reviews.
[Source: Parklu]
Katie Pratt, ELLIATT: “We have invested in some traditional placements in media and we have engaged KOLs where we basically dress the KOLs – this has been a game changer for us in China and has really helped us to grow…You are able to work really closely with someone and create a whole lot of content that is engaging for your followers, and the KOLs followers, with the potential to go viral. If you work with the right KOL and have a successful partnership with them, then you can achieve continued PR, in our case – for over 18 months now. It has a lot of longevity.”
Katie Pratt, Founder & Designer from ELLIATT, highlighted the benefits that can arise from having an on-the-ground presence in China: “China is a really exciting market to work in. We have a manufacturing system in China, so we don’t have to worry about 3-week shipping times and we can react really quickly. Of course, not having the shipping fees and import duties means that we can make much higher margins in China.”
“We have invested in some traditional placements in media and we have engaged KOLs where we basically dress the KOLs – this has been a game changer for us in China and has really helped us to grow" Katie Pratt, ELLIATT
Further Resources
Download our free China Country Starter Pack
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Download our free China Cultural Awareness Guide
This guide provides advice on adopting and responding to traditional Chinese business practices. It identifies cultural nuances to be aware of when meeting with and negotiating with your Chinese counterparts and provides useful tips for positive commercial interactions.
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