Chinese consumers expected to account for around half of all global spending on high-end brands in 2020 (up from 37% last year).
Currently, with over 30,000 international fashion, luxury, and beauty brands selling in China through e-commerce flagships or cross-border stores, there is a high potential level of business for the industry in the Asian market, and specifically in China.
Statistics predicted a boom in the Chinese market, that despite the global pandemic, has only slightly been slowed down – having a more rapid market recovery compared to other economies in the West. This trend has been reflected in the strategies of brands such as Fendi or Gucci who have adapted their messaging to the Asian market as we pointed out at the beginning of this year in our data brief Chinese New Year 2020 by the Data.
With the aim of continuing to look to the future of the industry, Launchmetrics announced this week the acquisition of PARKLU, the premier influencer measurement platform in China. Strengthening its Brand Performance Cloud, Launchmetrics will expand the company’s Media Impact Value™ algorithm to establish a comprehensive metric that benchmarks brand initiatives from East to West.
“PARKLU will add a new layer of apps and data to our Brand Performance Cloud,” stated Michael Jais, CEO of Launchmetrics. “In today’s climate, brands are trying to understand how they can be more efficient and deliver better ROI. This acquisition will make us the only player to measure cross-Voice performance by providing the industry with a consistent metric to more effectively understand performance in China and beyond.”
PARKLU is the premier influencer measurement platform in China – Like Launchmetrics, PARKLU is specialized in the FLB industry and covers more than 100,000 influencers — known locally as Key Opinion Leaders (KOLs) — across China and its major social media platforms including the likes of WeChat, Douyin (TikTok), Weibo, RED, Bilibili, and others.
The acquisition of PARKLU will give Launchmetrics access to an extensive amount of China-focused analytics that will enhance its Brand Intelligence solution and integrate 100K+ Chinese KOLs into their existing network. In addition, it will also allow Launchmetrics to operate directly in China — ultimately, introducing international brands to PARKLU’s combined reach of more than 900 million consumers. Given the growing importance of China in the industry’s recovery and influencers as one of the most powerful Voices in the customer journey, the acquisition thus represents a significant inroad to the market and its measurement.
But, why are strategies with Key Opinion Leaders essential pillars for entering the Chinese market? Let’s explore:
Chinese consumers spend 58 percent of their total time involved in Internet activity…
“…compared to 54.1 percent for US citizens and 54.7 percent for those in the UK. From 2018 to 2019, this translated to China gaining 57 million more internet users, while the US gained 1 million.” What’s more is that half of these consumers use social media to gain brand and product awareness, and 40% make impulse purchases based on what they see on social channels. In our recent State of Influencer Marketing Report, we spoke with Arne Eggers, Senior Vice President of Karla Otto Asia, who mentioned that in “other markets, KOLs tend to be an additional element used for a marketing campaign whereas in Asia they are usually at the heart of it.”
This cultural difference in the way in which marketing campaigns operate in Asia as compared to the west further reinforces the value of KOLs for fashion, luxury, and beauty brands who are looking to expand into a new market. Whether or not consumers are actively looking for products when they are spending their time online, KOLs are a key method of introducing products in a natural way and initiating that thought process about the potential purchase of specific products.
Key Opinion Leaders in China maintain their authenticity and relatability
According to PARKLU, the most successful KOLs are those that build trust with consumers by retaining authenticity, even if that means sacrificing production quality. Kat and Sid, for example, are well known for their videos comparing the USA to China – “while their videos look unedited and casual, the two put enormous time and effort preparing each episode.” And, even after seeing such success and signing on with a high-profile management company, their videos have not changed, their format, quality, and content have stayed the same:
KOLs are also heavily niche-based, so their content is essentially personalized to their audiences based on their lifestyle, interests, and shopping habits. Personalization, and making audiences feel connected in a true community is something that KOLs in China really excel at, which is part of what builds this all-important authenticity. Beauty influencer Melilim Fu says she makes an effort by getting to know her fans’ families and personal milestones, while Chengdu-based fashion blogger Sam Triplett told PARKLU that responding and reacting to comments and questions from fans can “make or break a sale”.
Chinese KOLs drive sales
KOLs are treated as an always-on strategy and are used differently in the East as compared to the West. For example, live streaming has proved to be an extremely lucrative strategy, driving millions of sales in seconds. “Austin Jiaqi Li – dubbed the lipstick brother – tries on 300 lipsticks a day and he once sold 15,000 lipsticks during 15 minutes over live streaming video.” According to NDN Group, 89% say ROI from influencer marketing is comparable or better than other channels, which highlights its success in driving concrete, measurable sales for brands. Determining ROI can be difficult in the West as sales are less directly linked to influencer campaigns, but Chinese KOLs have a proven track record of turning impressions, views, and reach into consumer purchases.
We are excited to welcome PARKLU to the Launchmetrics family as the premier platform in China for the measurement and analytics of influencers. If you would like to explore more about our Brand Experience Solution just click on the banner below!