The Future of Influencer Marketing Could be in China

Many people think of China as an ancient and bucolic place, well behind the West in technology.  It’s time to revise your thinking.  China is actually ahead of the curve, and the rest of the world, in one major aspect of digital marketing – the influencer marketing industry.  They have accomplished this through advanced functionality in e-commerce, including the integration of social media, and the use of digital payments.  Online giants like Google, Facebook, and Amazon are paying attention, and have begun integrating some of the Chinese innovations into their own products and tech.

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One of the Chinese innovations is the use of influencer incubators, a term many Westerners don’t yet know.  What is an influencer incubator?  Exactly what it sounds like.  Companies like Ruhan actively search the internet to identify new influencers, or key opinion leaders (KOLs).  They look for KOLs with substantial existing follower bases, test their skills and knowledge, and then nurture them to make them brand-savvy.  The influencers, utilizing their knowledge of their own fan base, actually become a part of the brand.  They post and involve their followers in every step of the development of a product of brand.  In this way they are able to test the waters, and come up with products specifically designer for, and pre-approved by, their audiences.  The consumer feels that they are telling the brand through social media platforms what they want, rather than being told what they want by an influencer.  Many marketers anticipate that this approach is on its way to becoming a global phenomenon.

Another trend in China is the integration of social media and e-commerce. This is evidenced by the fact that most major social media platforms have integrated digital payment solutions for some time.  Even more telling, however, is the way Chinese e-commerce sites have been transformed into social media platforms and “retailtainment” sites.  E-commerce live-streaming platforms like Little Red Book and Taobao Live now utilize video, live-streaming, and social media capabilities.  Users are encouraged to hang out, interact, and comment, Facebook style.  Consumers therefore spend much more time on the sites, which provides the sites a substantial advantage.  While sites such as Instagram have made small steps in terms of retailtainment and digital payments, the Chinese are leading the way to the next level.

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As the use of traditional search engines declines in China, many users are turning to social media platforms for information.  The Chinese have developed sophisticated algorithms that go beyond standard searches.  Such search engines as WeChat allow the user to conduct searches that include traditional web searches, but also extend to the private conversations on social media sites.  This is known as social search optimization (SSO).  The platform Xiaohongshu combines social media and e-commerce, with social media posts that function like webpages.  Influencers utilize the algorithms  to get their posts seen by identifying targeted keywords and using them in their title and their content.  Short videos also up the ante.  Western sites who want to compete with Google are taking notice.

As influencer marketing continues to innovate and thrive in China, Chinese social media platforms are seeing another source of income.  It is now common for sites to charge brands for sponsored posts.  While restrictions on influencer marketing were quite limited in the past, marketers are now often required to work through the platforms themselves.  The platforms effectively become agents, monitoring content and brokering fees.  As the Chinese influencer economy is now projected to be worth nearly $16 billion, it was only a matter of time before these platforms recognized a financial opportunity.  Western sites will most likely adopt this model as well.

As the social media platforms adapt to this changing climate, so are the influencers.  Many are now creating their own creative studios, competing with ad agencies for content and projects.  Influencers have exhibited skill and expertise in promoting their own images and the brands they represent.  They are therefore in a unique position to take this know-how to the next logical step, and become content creators with their own creative studio boutiques.  As traditional advertising formats, such as print, begin to wane, these studios are drawing artistic, writing, and production talent away.  This expertise, combined with the social media savvy of the influencers, is creating some formidable competition for the old school advertising world.  It is also providing ongoing income and relevance for influencers, who may have difficulty coming up with a flow of content that is centered entirely on themselves.  Most of them have experience in self-produced content, such as beauty or fashion videos.  They are now producing this content for others, and agencies are taking notice.  Expect this trend to grow not only in China, but also the West.

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Nay-sayers who have predicted the decline of the internet, and of social media platforms, are eating their words.  As social media develops as an avenue for e-commerce, for entertainment, and for informational searches, the temptation for advertisers and influencers to explore and utilize the possibilities is strong.  The Chinese have embraced this trend, and they are setting the standard in e-commerce, digital payments, and the transformation of social media and retailtainment.  They have recognized the kind of communication that consumers want, and are paving the way for the explosion of this industry.  The West is watching and learning.