KOL Marketing Strategies to Grow Your E-commerce Business in China
Even for those living and working in China, it can feel like the blistering pace of China’s changing digital trends is hard to keep up with. As we are sure you already know, you must constantly adapt and localize your business, your marketing strategy, and even yourself to stay ahead in China.
This article will explore a key Chinese E-commerce marketing concept that have become impossible to avoid over the past few years: the KOL. Let’s take an in depth look at successful KOL brand partnership case studies and explore tips that we have collected from both our own experiences and experts in the field.
What Is a KOL?
KOL is the abbreviation for "Key Opinion Leader". It is the Chinese equivalent of "influencer" in Western digital marketing campaigns. KOLs could be famous doctors or scientists respected in their field by a wider audience or celebrities such as star athletes.
KOLs can be divided into different tiers depending on their level of influence:
Celebrities (>10 million followers)
Costs millions to tens of millions
These are household names, and each one of their posts can be expected to reach audiences across China. This tier of KOL marketing is essentially the same as traditional celebrity sponsorship.
Pros: Their digital presence will cover every city and town in China. As such they are incredibly effective in catapulting a brand or product’s exposure and significantly increasing sales.
Cons: Cost for a campaign are only within the budget of massive companies, making this an unrealistic option for most small to medium level brands. As they are highly sought after for sponsorships, they have strong leverage when negotiating with brands. At the same time, there is a risk of brand dilution, as these KOLs usually promote multiple brands in the same time period.
Top-Tier KOLs (100 thousand to over 1 million followers)
Costs from tens to hundreds of thousands
KOLs at this tier are professionals who make a living through selling products. They are trusted by the average consumer for their expertise in their fields of specialty. Examples include KOLs such as the “lipstick king” Austin Li, prankster KOL Crazy Little Brother Yang (@疯狂小杨哥), etc.
Pros: At one tier below celebrities, these KOLs can still give vast exposure to your products across China. In addition, they usually are more specialized in one field of products and confer their professionalism and expertise to your campaign.
Cons: Cost for these KOLs may be out of reach for most smaller brands. In addition, there is high risk of brand dilution as these KOLs usually promote products from within one industry.
Mid-Tier KOLs (10 to 100 thousand followers)
Costs in the tens of thousands
KOLs at this tier occupy top positions in their industry niches, and many are full-time KOLs or do KOL work on the side while pursuing a professional career in their industries.
Pros: These KOLs can provide strong exposure to specific target demographics across China while being within the budget of even smaller brands. They are the best choice for increasing word-of-mouth marketing.
Cons: At this tier, there is a risk that these KOLs have fake followers (水军). It’s important to vet KOLs at this tier to ensure they have genuine engagement.
Micro KOLs/KOCs (<10 thousand followers)
Costs from free to few thousands
KOLs at this tier are usually influential professionals in their specific niche communities, and their reach is often localized. KOCs, or key opinion consumers mostly consist of product reviewers. Whereas higher-tier KOL strategies hinge on inspiring consumer aspiration, marketing strategies at the micro KOL and KOC levels inspire consumer relatability. KOCs usually help provide consumers with product usage instructions and more detailed consumer-oriented assessments of products and brands.
Pros: Marketing strategies at this tier are within the budget of smaller and local brands. Strategies involving this tier can also be instrumental for even multinational brands in creating grassroots hype for products at a local scale.
Cons: Effective marketing strategies at this tier require working with large numbers of micro KOLs and KOCs. In addition, micro KOLs and KOCs are not a substitute for traditional mid and top-tier KOLs as they cover different aspects of a marketing campaign.
Platforms Suited for KOL Marketing
KOL marketing is suitable for many social media platforms in China. The format of KOL marketing can be adjusted for each platform. For example, KOL Livestream sales are suited for Douyin, RED (Little Red Book), WeChat Livestream, Kuaishou, and Taobao Livestream. Image and text-based KOL campaigns are suited for Weibo, RED, and WeChat Official Accounts. Brand-sponsored video campaigns are suited for Douyin, Red, Bililbili, and Wechat Channels.
How Can You Work With a KOL?
There are different ways to work with KOLs, each method suited for different marketing strategies. Let’s examine a few popular ones, ranked from highest ROI to the lowest:
1. Product Seeding
This method is the most cost-effective way to work with a specific KOL. By gifting products to KOLs to promote, the only cost is the product’s production cost. For this method, KOLs will promote the product only if they want to or feels like it. Therefore, it requires a strong pre-existing relationship with the KOL and will not work for very famous KOLs unless you already have a close personal relationship.
This method is usually used for campaigns with KOCs and smaller micro-KOLs.
2. Pay per Sale
As its name indicates, the company and the KOL will work at a fixed rate. This means that for every successful sale during the campaign, the KOL will receive a commission. This agreement between the company and the KOL can be a difficult one to reach, requiring good reputation and substantial leverage on the side of the company, but the ROI will be guaranteed.
3. Pay per Click
This method is used with a low-range KOL. That means you will work with micro-influencers.
4. Flat Rate
This is the easiest agreement to reach with a KOL and as such it represents almost 95% of KOL agreements.
What Are the Specific Case Studies for These Methods?
While video campaigns and image and text-based campaigns have been popular formats for KOL marketing in the West, in China, livestream campaigns with KOLs have proven extremely effective. Below, we explore KOL collaboration model from above with case studies from KOL livestream sales:
Pay Per Sale:
JACEYL used this method with Melilim Fu. JACEYL is a foreign purchasing agent that ships goods to China. They had a common Weibo and WeChat account. and the only thing that Melilim had to do was to show the products and explain to her followers where to go to buy these products.
After only one week of work, JACEYL followers increased by 1500 and 800 on Weibo and WeChat respectively. They sold $25,400 USD worth of product and Melilim received 20% commission.
Pay Per Click:
YES contacted Melilim Fu to promote their launch party and to share a download link for their App on Weibo. This took place in a jewelry shop in Beijing called Sanlitun Soho. It was a live show where Melilim was chatting with her followers and at the same time she was trying on different jewelry. Thanks to this method, the digital stock of YES was sold out before the end of the show.
In this case, it was hard to say just how much of an impact she had on the number of App downloads. The company said it was approximately 25% of her viewers which means around 5,000 downloads. She received 800 USD for the campaign which represents only 0.16 USD per download.
Maybelline hired Melilim and other KOLs to put together a live show on five live streaming Apps to talk about Maybelline's new line of lipstick. She reached more than 3 million viewers. To create even more engagement, they asked their KOLs to use VR headsets to record their experiences and then post them on their personal Meipai accounts. They sold 10,000 lipstick products within two hours.
Where Can You Find KOLs?
They are a few main platforms that can help you to find KOLs:
This platform ranks all the major WeChat accounts based on their popularity and their performance. Basically, you have to register as an “Advertiser Owner (广告主)”, select your budget and industry (the platform will offer you different possibilities) then you will have to upload your article. After that, you can either ask for a pricing from a specific WeChat account and see if it fits your budget, or you can make an offer to different KOL accounts and see which one will accept it. Once an offer is accepted, you transfer your money to the platform and then the platform transfers the money to the KOL.
MCNs (Multi-Channel Networks)
Multi-channel networks in China are KOL agencies. They are responsible for managing top-tier and mid-tier KOLs and incubate promising KOL candidates. Working with MCNs helps take out the work of looking for KOLs on your own, especially for campaigns that require a range of KOLs. However, MCNs take a commission from both KOLs and brands, resulting in a significant markup for campaigns.
We-Media is an MCN positioned towards overseas businesses, providing services and information in English, unlike most MCNs in China. You will have to go through their own services and their sales team to discuss a potential collaboration. Once an agreement has been made, you will have access to a detailed excel spreadsheet with the prices. Sometimes you will be able to get a better price than going to talk directly with the KOLs. However, quality control is still your responsibility.
How Do You Choose a KOL?
You need to be careful when you decide to work with some KOLs. In China, the use of KOLs can be very powerful but it can also be very expensive while providing no boost to your sales if they do not suit your campaign objectives. If you decide to choose a KOL for your strategy, follow these five tips:
- Choose your Chinese KOL with care and make sure the KOL understands the idea of your brand, for example, if you are a sports brand, do not use a KOL that represents a luxury brand, unless you are promoting a new product for another target audience.
- Do not be fooled by the number of followers a KOL has; look to their actual engagement and see if it lines up with their follower number. In China, there are services for buying “水军Water Armies”, or fake followers, and it’s common to see accounts on Weibo and WeChat paid to follow a brand’s account.
- Understand your ROI (return on investment) and KPI (key performance indicators). Each publication or action must have a clear purpose. If you want to build brand awareness, social media engagement will be your KPI, but if you want to increase your sales then the KPI will be the products sold.
- Check the reputation of KOLs before using them as your brand ambassador. The reputation of a KOL is constantly changing so be aware of this. A KOL can be famous one day and be gone the next and this will impact your brand image or message.
- Be aware of brand dilution. Social media KOLs may represent several brands to diversify their revenue sources. However, this can be a double-edged sword because if a KOL works for many different brands in one industry, their followers will have a hard time remembering your particular brand.
KOL marketing has been a popular tactic in China for over a decade, but the way brands collaborate with KOLs has evolved in recent years. One of the most effective methods today is the KOL livestream sale, which combines the power of livestreaming and e-commerce. If you want to learn more about KOL marketing or incorporate it into your business, we're here to help. Reach out to us with any questions, and we'll be happy to assist. We can also schedule a call to discuss the details and work together to define your campaign.