Why is KOL Marketing so effective?
Updated: Aug 8, 2019
In the past 5 years the rise of influencer marketing has effectively changed the way brands communicate their message to consumers.
As consumers continue to gravitate towards social media platforms to consume news, personal updates, it’s no wonder it has also become a breeding ground for product recommendations and a new kind of WOM marketing.
Influencers, or as they are called in China – Key Opinion Leaders (KOL) are extremely powerful, and are instrumental in most China marketing campaigns.
Even if the KOL is not directly selling the product, they are heavily influencing purchasing decisions.
To understand why KOLs in China sell so well it is important to understand the ecosystem which promotes this type of social selling.
I’ll split it up into two parts – how influencers have become so massive in China and what they’re using.
Weakened trust in brands
Due to the nature of the popular social media platforms as well as a history of scandal from brands bringing in fake or unsafe products, consumers are wary to trust brands they don’t know and often turn to social media to view recommendations.
The digital ecosystem in China has adapted in such a way that the social aspect is heavily emphasised.
Social-oriented digital ecosystem
Many Western marketers view the absence of Facebook and Instagram as daunting challenges, when in fact, these blocked social media platforms pale in comparison to China’s homegrown platforms that make up its highly integrated digital ecosystem.
There are three main companies controlling the majority of the e-commerce, social, mobile payment and search market.
This has made online shopping a social affair, boosted by the fact you can seamlessly pay for your desired items, all on mobile without leaving the app.
Marketers should not underestimate Chinese social media apps just because there is no Facebook, Instagram or Snapchat.
The restrictions on these platforms gave rise to powerful apps and cultivated a different consumer culture which has become ideal for the concept of influencer marketing.
OK with being sold to on social
Chinese consumers, as opposed to Western consumers, are OK with being sold to on social media.
Not only are they OK with it, but they will turn to social first before making a purchase.
Accenture found that 70% of Chinese born after 1995 will turn to social media to directly purchase products as opposed to other channels – compare this with the global average of 44%.
Chinese spend a large amount of time connected to their mobile phones.
In 2017 Chinese app users spent around 225 billion hours in apps, which is 4.5 times longer than the second highest market – India.
This time is largely divided between social, e-commerce, games and search, which is why the lines between social and e-commerce have easily become so blurred.
This is where KOLs come in.
China’s most popular app, WeChat – often referred to as a “walled garden” is a hard place for brands to achieve visibility.
From this walled garden, individual bloggers and content curators began to foster highly engaged followers, going above and beyond to provide a higher level of content, and building personal relationships with their fans.
Chinese consumers rely heavily on the opinions of KOLs as well as their own social networks.
Taking a look at this customer journey diagram from Boston Consulting Group it becomes quite clear just how big of a role social plays in lives of Chinese consumers.
Just how important are KOLs in the purchasing decision?
According to Cyril Drouin, Chief e-commerce officer for Greater China, “if you don’t have a KOL, you won’t sell.”
There are hundreds of apps in China, and many of them are great for different reasons, enabling niche KOLs to reach their fans in an optimal way, however, I would like to focus on two platforms – WeChat and live streaming.
We’ve written about WeChat before, and if you’re not familiar with China’s super-app or how brands are using it, brush up on your knowledge here
WeChat has been evolving quickly, especially within the last two years after the release of mini programs favoring KOLs and the social selling aspect of e-commerce.
Many KOLs have Subscription Accounts, which can now seamlessly link to ecommerce mini programs.
This means that a consumer can be reading a piece of content from their favorite KOL, one click gets them into this KOLs WeChat mini program where they can browse products, share with friends, and in just a few clicks purchase whatever they desire all without leaving WeChat.
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WeChat is giving KOLs more and more tools to sell on this social media platform and it doesn’t seem to be slowing down anytime soon.
However, WeChat isn’t the only tool KOLs have been maximising.
Forget fancy video cameras and staged performances, China is all about right here, right now.
I often find myself on the metro or waiting for the next bus glancing around at what people around me are doing on their phones (because everyone is always on their phone), and many times I’ll see people swiping through different live streams.
You can view everything from people playing with their cat, to a KOL attending the latest shoe launch at an exclusive hotel.
Live streaming in China has exploded in the past year and a report from Deloitte finds that China is likely to continue to top live streaming records, with viewers reaching over 450 million.
And if that number doesn’t surprise you, the revenue generated from live streaming certainly will – Deloitte estimates that revenue will rise 32% from 2017 to hit $4.4 billion in 2018.
See below, a KOL live streaming a cooking show using the client’s products at a trade show.
Live stream aired on an e-commerce platform where viewers could watch, and seamlessly purchase what she was using, all on the same platform.
Live streaming can be used for product launches, exclusive events, thought-leadership building, trade shows and more.
The trick here – make sure you know who you’re working with, the content will be live!
As KOLs become more powerful and popular in China, of course, there are issues with fake data, and partnerships ending badly.
However, the reality is that for the foreseeable future KOLs, in some form are a pivotal part of a China marketing strategy.
Brands must approach KOLs that are on the right platform for their brand and concern themselves with the quality of fans a KOL has, not the quantity.