Influencer Marketing: China’s Masterclass in Digital Commerce

Opinion by Ben Wagner, CMO, VML South Africa

When it comes to things digital, traditional wisdom has us looking to the US for inspiration. But in the rapidly advancing world of influencer marketing, China is where the real learnings are to be found. 

China has been a masterclass example of the future of shopping, according to Murray Legg, founder of influencer marketing platform, Webfluential and theSalt. He was speaking at a VML South Africa webinar for clients.

Legg shared some uncomfortable truths – chief among them, that, “China has positioned influencers as being far more productive and responsive than ads.” Not necessarily what you want to hear as an agency, although it was somewhat less alarming for us because VML has been emphasising authentic collaborations with content creators for some time now.

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Even if we wanted to be staid in our response to the evolving media landscape, you can’t argue with the numbers. Li Jiaqi, a Chinese influencer who goes by the moniker the Lipstick King sold $1.7 billion worth of product during a 12-hour livestream that saw 250 million people tuning in.

Of course, having a population of more than a billion people helps. But there are lessons to be learnt that don’t require a seventh of the world’s human inhabitants.

The Power of Influencers: Key Opinion Leaders (KOLs)

In China, influencers are not seen as merely influencing audience behaviour. Like fashion runways dictating the next season’s styles, they’re viewed as leaders of public opinion and are, in fact, called key opinion leaders (KOLs).

This is a natural progression in a country where businesses and citizens are ranked according to a social credit score. It’s also not a huge leap for social media, where the concept of a social credit score might not be official, but has emerged organically in the form of algorithms that reward the users who have the most followers and the content that has the most engagement.

Brands might be accustomed to wielding vast influence in the real world, but social media, where their customers are increasingly spending more time, searching, researching and transacting, is the domain of the influencer.

Live-Streaming Commerce: A Game-Changer in Real-Time Shopping

Up until recently, influencer marketing has typically used the familiar “hit the link in bio” or “go to the website and use my discount code” methods to drive sales. It’s measurable and gets the job done, but the audience is one distraction away from not following through. And if there’s one thing the internet excels at, it’s serving up distractions.

In China, live-streaming commerce is closing the deal before the audience has a chance to “look, squirrel”. In live-streaming commerce, audiences are shopping in real time, while interacting with the influencer, asking for more information on the product (does the lipstick feel sticky? Does the shirt size run small?) as one might interact with a sales assistant in a store IRL.

Considering social media has always been about instant gratification, the idea of transacting live is par for the course – as evidenced by the figures. Towards the end of last year, China’s live-streaming commerce economy was on track to hit $774 billion. Again, this isn’t down to population size alone – the Chinese live-streaming commerce landscape has matured to the point where audiences are live-shopping big-ticket items like vehicles and real estate off the back of effective influencer marketing. Yes, cars and houses.

For this to work requires a robust e-commerce environment, which tech companies such as Alibaba and Tencent are facilitating in China, and which has always been a big focus for us at VML. And of course, it doesn’t end at “add to cart”. Selling seamlessly in real-time is one thing, but the after-sale customer experience has to be just as excellent. That means having the logistics in place to follow through.

We’re already competing with China: The Rise of TEMU and SHEIN

There’s been a lot of talk about Amazon launching in South Africa, but our most downloaded app so far in 2024 is Chinese shopping app TEMU. That means China has already brought the competition to local retailers, whether they’re ready for it or not.

Most of the big local retailers are experimenting with influencer commerce to a degree, with Woolworths and Mr Price leading the charge in investing in live-stream shopping and long-term influencer partnerships to drive sales.

However, there’s still much that local brands could be doing better if they’re going to compete with China in the digital space.

For starters, if you’re trying to speak to digitally connected consumers, you need to direct more of your budget towards digital and away from traditional media.

Incentive drives behaviour and affiliate revenue is a strong incentive for an influencer, yet few brands are willing to give influencers a share of the profits arising from the sales they’re driving.

With consumers spending so much time glued to their digital devices, brands seem oddly reticent to experiment in the digital space. And while they hold back, the likes of TEMU and its countryman SHEIN are coming out to play.

In a world where TikTok is the new television and social is the new search engine, it’s time we learnt from China and started recognising influencer marketing for the powerful sales channel that it is.

 

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When it comes to things digital, traditional wisdom has us looking to the US for inspiration. But in the rapidly advancing world of influencer marketing, China is where the real learnings are to be found. 

China has been a masterclass example of the future of shopping, according to Murray Legg, founder of influencer marketing platform, Webfluential and theSalt. He was speaking at a VML South Africa webinar for clients.

Legg shared some uncomfortable truths – chief among them, that, “China has positioned influencers as being far more productive and responsive than ads.” Not necessarily what you want to hear as an agency, although it was somewhat less alarming for us because VML has been emphasising authentic collaborations with content creators for some time now.

- Advertisement -

Even if we wanted to be staid in our response to the evolving media landscape, you can’t argue with the numbers. Li Jiaqi, a Chinese influencer who goes by the moniker the Lipstick King sold $1.7 billion worth of product during a 12-hour livestream that saw 250 million people tuning in.

Of course, having a population of more than a billion people helps. But there are lessons to be learnt that don’t require a seventh of the world’s human inhabitants.

The Power of Influencers: Key Opinion Leaders (KOLs)

In China, influencers are not seen as merely influencing audience behaviour. Like fashion runways dictating the next season’s styles, they’re viewed as leaders of public opinion and are, in fact, called key opinion leaders (KOLs).

This is a natural progression in a country where businesses and citizens are ranked according to a social credit score. It’s also not a huge leap for social media, where the concept of a social credit score might not be official, but has emerged organically in the form of algorithms that reward the users who have the most followers and the content that has the most engagement.

Brands might be accustomed to wielding vast influence in the real world, but social media, where their customers are increasingly spending more time, searching, researching and transacting, is the domain of the influencer.

Live-Streaming Commerce: A Game-Changer in Real-Time Shopping

Up until recently, influencer marketing has typically used the familiar “hit the link in bio” or “go to the website and use my discount code” methods to drive sales. It’s measurable and gets the job done, but the audience is one distraction away from not following through. And if there’s one thing the internet excels at, it’s serving up distractions.

In China, live-streaming commerce is closing the deal before the audience has a chance to “look, squirrel”. In live-streaming commerce, audiences are shopping in real time, while interacting with the influencer, asking for more information on the product (does the lipstick feel sticky? Does the shirt size run small?) as one might interact with a sales assistant in a store IRL.

Considering social media has always been about instant gratification, the idea of transacting live is par for the course – as evidenced by the figures. Towards the end of last year, China’s live-streaming commerce economy was on track to hit $774 billion. Again, this isn’t down to population size alone – the Chinese live-streaming commerce landscape has matured to the point where audiences are live-shopping big-ticket items like vehicles and real estate off the back of effective influencer marketing. Yes, cars and houses.

For this to work requires a robust e-commerce environment, which tech companies such as Alibaba and Tencent are facilitating in China, and which has always been a big focus for us at VML. And of course, it doesn’t end at “add to cart”. Selling seamlessly in real-time is one thing, but the after-sale customer experience has to be just as excellent. That means having the logistics in place to follow through.

We’re already competing with China: The Rise of TEMU and SHEIN

There’s been a lot of talk about Amazon launching in South Africa, but our most downloaded app so far in 2024 is Chinese shopping app TEMU. That means China has already brought the competition to local retailers, whether they’re ready for it or not.

Most of the big local retailers are experimenting with influencer commerce to a degree, with Woolworths and Mr Price leading the charge in investing in live-stream shopping and long-term influencer partnerships to drive sales.

However, there’s still much that local brands could be doing better if they’re going to compete with China in the digital space.

For starters, if you’re trying to speak to digitally connected consumers, you need to direct more of your budget towards digital and away from traditional media.

Incentive drives behaviour and affiliate revenue is a strong incentive for an influencer, yet few brands are willing to give influencers a share of the profits arising from the sales they’re driving.

With consumers spending so much time glued to their digital devices, brands seem oddly reticent to experiment in the digital space. And while they hold back, the likes of TEMU and its countryman SHEIN are coming out to play.

In a world where TikTok is the new television and social is the new search engine, it’s time we learnt from China and started recognising influencer marketing for the powerful sales channel that it is.

 

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