The Fragmented but Interconnected Face of KOL Marketing in 2022

It wasn't long ago when every marketer in China was talking about ecommerce. Alibaba and JD battled it out for supremacy, and then another challenger, Pinduoduo, came from nowhere, and it became a three-horse race.Whilst the traditional ecommerce platforms still dominate online sales in China, the new world of livestreaming, KOLs and social commerce has dominated marketing forums over the past few years.

Unlike ecommerce, where there were two, then three platforms to consider in China, the evolution of social commerce is spread across six platforms - although some would argue as many as nine or 12. These platforms are increasingly cannibalising screen time from traditional ecommerce stores.

Douyin's 600 million users spend nearly twice as much time on the app as the average user does on WeChat. These users spent ¥800 billion ($119b) shopping on Douyin last year. Competitor Kuaishou, which embraced live shopping earlier, sold ¥680 billion ($101b) worth of goods and services to its 323 million users. WeChat, not wanting to be left behind, has developed its Channels livestreaming service. The service grew its user base by 79% last year to 500 million and is making brands more dependent on its Channels stores.

Much of the growth in sales on these platforms has been driven by individual livestreamers and KOLs. Whilst brands are increasingly developing their own live shopping channels, individual KOLs still account for the lion's share of sales volume. There are some 10 million KOLs in China and almost all are managed by MCN (multi-channel network) agencies, which number more than 100,000.

Livestreaming and KOLs are a relatively new industry in China. As a result, it is fragmented across the platforms, MCNs and KOLs. Despite this, marketers should view the ecosystem as highly connected with interdependence between platforms, KOLs, brands and users. They all feed heavily off one and other.

The added layers within Chinese marketing strategies means brands need to deeply understand their target audience, and how they interact with digital channels and their KOLs. At a simplistic level, if you were targeting older consumers online, they are unlikely to be on Weibo, where just 5.6% of users are over 50 years old. Whereas WeChat or Kuaishou could be worth considering, given 23% of users are of that age. Similarly, if you are seeking to reach your customers by entertaining them, then Weibo, Douyin and Kuaishou could be your platforms. If you are taking a more interest-specific approach, platforms such as Little Red Book or Bilibili may better suit your strategy. We've published an infographic to help you understand the social platforms, KOLs and how things fit together.

At China Skinny, we recommend a balanced channel strategy that isn't too dependent on KOLs and livestreaming. But it is hard not to discount the importance of these touch points, particularly to build awareness, educate and encourage trial, before transitioning users to your owned and earned platforms.

Contact China Skinny to learn how we can help you understand your target audience and then align that with the most appropriate platforms and KOLs to connect with them in an authentic and meaningful way.

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