In 2019, the overall advertising market in China performed poorly, especially the traditional advertising market, while the market size of KOL advertising increased against the trend. But who are the KOLs and why are they so important in China?
WHAT ARE CHINESE KOLs?
KOLs (Key opinion leaders) is one of the best ways used to promote in China as they reach a wide audience.
Chinese consumers tend to trust information delivered by people much more than the one promoted via traditional channels, therefore this could be a good choice for a company that wants to promote its company in the Chinese market.
KOLs could be celebrities, influential bloggers, intellectuals. The choice of the key opinion leader depends on the type of product you offer, for example, if you sell in fashion, celebrities may be the right choice, but not only, even an expert of that product could be a good choice.
Next, we will take you an in-depth understanding of KOLs collaboration trend in 2020.
KOLS MARKET SCALE
Traffic is the driving force behind the growth of the KOL advertising market.
In 2019, the number of daily active users on the platform represented by TikTok and Kwai showed explosive growth. While users were educated by short video content forms, they also accepted new forms of advertising.
Traffic and content are inseparable, and the number of content creators on each platform has grown rapidly:
- Weibo: in June 2019, the number of Weibo head authors reached 780,000, an increase of 11.4% compared with November 2018;
- Tiktok: in 2019, The number of content creators who are education-related KOLs with over 10,000 fans on TikTok increased by 330% in half a year;
- Bilibili: in 2019, the number of Users on Bilibili increased by 151% year-on-year.
The increase in content creators means that advertisers’ choice of KOL and marketing methods are increasing.
KOL helps brands precipitate content through long-term high-quality content output, and KOL’s massive fans can help brands achieve exposure.
At the same time, KOL understands the needs of fans, it is easier to promote the conversion of fans, KOL has become an important channel for brand advertising.
HOW TO MAKE GOOD BUSINESS RESULTS?
In 2019, the TOP-10 industry accounted for 88% of the overall KOL market, and cosmetics, personal care, food and beverages led the overall KOL market with a 40% investment.
Among them, domestic independent brands pay more and more attention to KOL marketing and quickly occupy users and markets through the flexible use of KOL and KOC.
Therefore, we can see that many domestic new brands like Huaxizi and Wang Baobao have been hatched under this model.
KOLS COLLABORATION ON CHINESE PLATFORMS
The core appeal of brand owners to cooperate with KOLs has been tilted to recommend goods and promote goods.
In the past, the channels for consumers to buy goods were mainly concentrated in stores, supermarkets, or e-commerce platforms. Today, KOL replaces traditional shelves, and users can purchase goods in KOL’s Live broadcast rooms, TikTok shops, and Kwai shops.
KOL is getting closer and closer to consumers, and its marketing value is constantly being amplified.
Short video platforms are favored by brand owners due to the rapid increase in daily activity, more vivid content forms, and efficient access to users. Short video platforms usher the harvest period of the market.
Weibo and WeChat are impacted by the rapid development of short video platforms, and the distribution ratio of the brand owners’ investment amount on Weibo and WeChat is declining, but the total ratio of the brand owner’s investment amount on these two platforms exceeds 70% among the five platforms. Weibo and WeChat are still unshakable in the new media industry.
THE CHANGES IN THE PRICE OF KOL
- Weibo: The overall price of all KOL publications is increasing, which means that the commercial value of Weibo KOL is underestimated by the market
- WeChat: The public account is very concentrated in the head, and the competition in the waist and tail is more intense;
- TikTok: The regular price of the head KOL magazine increased slightly and gradually stabilized. The number of KOLs at the waist and tail increased sharply, leading to market competition and the regular price of those KOLs was compressed;
- Kwai: Buddy economy began to be valued by the brand, and the price of Kwai KOL was greatly increased;
- Xiaohongshu: The content of KOL is more practical and has a greater impact on fan decision-making. The regular price of KOL has an obvious upward trend.
The distance between KOL and consumers is getting closer, and the KOL characteristics of different platforms are different. When brands choose to launch KOL, they will make different demands on KOL due to their own marketing direction.
What are the characteristics of brand owners putting KOL on various platforms?
- Weibo: Brand owners mainly collaborate on Duanzi KOLs or focusing on a vertical field. As a public opinion field, Weibo provides natural traffic space for Duanzi KOL.
The entertainment content KOL fans coverage is more extensive, helping the brand to achieve more exposure; while the vertical KOL fans interest is more clearly focused on certain areas, KOL can promote goods through disseminating specialized contents, stimulating the traffic conversion.
Duanzi and vertical KOL perform their respective duties and form a diversified Weibo ecosystem. Therefore, Weibo is a necessary marketing position for brands.
- Wechat: users are used to reading deeply on WeChat. KOL uses words to build deep emotional communication with fans, which is the unique feature of WeChat. Therefore, WeChat is a bridge connecting brand and user emotional communication and helps brands to promote themselves.
- Tiktok / Douyin: from the analysis of KOL’s order receiving, KOL related to the beauty looks has a decreased number of orders, while foodie and science and technology KOLs gain an increasing number of orders. The humor KOLs whose content is entertainment-oriented are most preferred by brands. According to TikTok, KOL helps the brand to expose and gain traffic through high-quality content.
- Kwai: brands mainly launch customized videos on Kwai. Fans do not mind KOL to insert advertising in their video content. Through the “human + content” social ecology, Kwai helps brands quickly establish a strong trust relationship with fans.
- Xiaohongshu: the brand owners tend to put the head KOL with an excellent identity and background to help the brand quickly expose. Meanwhile, KOC, through the low-cost realization of deep penetration of target users, has become the preferred target of brand owners. In addition, whether the content released by KOL has been included in the hot words has become the concern of brands. Users have a strong purpose to “find the answer” by using Xiaohongshu. Moreover, the tonality of Xiaohongshu KOL is highly matched with fans. Therefore, Xiaohongshu has become a wonderful position for brands to precisely cooperate with KOL and content to promote goods.
Brands will combine the characteristics of each platform to make different collaboration needs and select KOL with different characteristics.
KOLS COLLABORATION OF SMALL AND MEDIUM-SIZED COMPANIES
Small and medium enterprises in the early development stage of transformation focus on the traffic conversion, and mainly rely on the e-commerce platform to promote; in the medium and long-term marketing stage, brands need new media platforms, such as TikTok, Weibo, Xiaohongshu to improve the brand exposure, resulting in more traffic conversion.
The characteristics of small and medium-sized enterprises putting KOL on Weibo: focus on waist emotion KOLs and constellation KOLs, because of their high-cost performance.
Characteristics of SMEs cooperating KOL on TikTok: SMEs placing KOLs on TikTok are mainly concentrated in the beauty, daily necessities, and food industries, of which nearly 60% are cosmetics and skincare brands. Such brands pay attention to the feedback data of active fans of TikTok, which directly shows whether the content of KOL is preferred by fans and generates discussion interest.
When SMEs collaborate KOLs, they differ from branded companies in terms of KOL’s choice of magnitude, settlement method, and delivery purpose. Moreover, a large number of SMEs have a huge space for KOLs in the future.
KOLS DURING ALIBABA ‘DOUBLE 11 SHOPPING FESTIVAL’
During the “Double Eleven” in 2019, the amount of money of KOL collaboration increased by 16% year-on-year, and the number of KOL collaboration increased by 57% year-on-year. KOL has become an important promotion and sales channel for brand owners in large-scale marketing festivals.
From the rhythm of the collaboration, the amount that brands cooperating KOL during the double eleven periods is mainly concentrated in the front and middle stages, accounting for 79.3% of the total. From the platform, Weibo is the largest channel for brands to cooperate with KOL during the double eleven periods. Brands cooperated with KOLs on Weibo to rapidly promote goods in the early stage of the Double 11 activity, and collaborate PR contents on WeChat subscriptions to further realize consumer acquisition.
From the large-scale growth of public traffic in the early stage to the transformation of public traffic into private traffic in the later stage, the brand is further transformed into its own social assets to create greater value for the brand.
THE EPIDEMIC IMPACT ON KOLS MARKET
In Q1 2020, the epidemic hit the KOL advertising market, and the overall market size shrank by nearly 25% year-on-year. Due to missing two important marketing timing (2.14 Valentine’s Day and 3.8 Women’s Day) or due to travel factors, some industries postponed or reduced KOL budget.
However, the at-home economy during the epidemic also prompted a certain increase in the amount of KOL investment in online education and gaming industries.
“Cloud Disco”, “Cloud Fashion Show”, “Cloud Concert” and other new plays have emerged, and users’ online duration and activity have been significantly improved. Brand owners in some industries have even increased their efforts in KOL collaboration.
Enterprises also save themselves through the Live broadcast.
Taking Lin Qingxuan, a domestic beauty brand as an example, during the epidemic, through the Live shopping guide and WeChat mini program membership conversion, the epidemic crisis was successfully resolved. As of February 15, 2020, Lin Qingxuan’s offline performance has reached 145% of the same period last year. Due to the sudden epidemic, brands gradually realized the importance of digital construction.
It is worth mentioning that during the epidemic, some brand executives joined the Live broadcast, such as Lin Qingxuan founder Sun Laichun, SAIC Passenger Car Company Deputy General Manager Yu Jingmin, Xiaomi Group Vice President Chang Cheng, et al.
INFLUENCERS COLLABORATIONS TRENDS IN 2020
- Influence Growth: Affected by factors such as the brand’s pursuit of marketing efficiency, platform support, and potential user spending power mining, the overall amount of KOL collaboration will continue to maintain a high growth trend in 2020 and is expected to exceed 75 billion RMB.
- More collaboration: The brands that have already entered will reap the value brought by KOL. In the future, they will further increase the effort of KOL collaboration, more brands will accelerate their actions, and the market of KOL collaboration will be further expanded.
- Live Streaming: In 2020, selling goods via Live streaming has been a hot trend. Live streaming will become the mainstream form of KOL media buy.
- SME: The number of SME is large, and the demand space is large. In the future, SME will become the backbone of the KOL collaboration market.
With the core demands of advertisers inclining from promoting products to transforming traffic, Live streaming has become the keyway for all platforms, brands, and KOL content collaboration.
KOL can not only help a brand to extent exposure and enhance brand influence but also directly promote transaction conversion. How far KOL marketing can go? Let’s see.
Do you want to know more about KOLs in China? Contact GMA a digital marketing agency, specialized in the Chinese digital market.