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How to Best Utilize Your KOL Budget for Influencer Marketing in China? Micro, Mid, or Macro KOL?

So, your director has finally decided to try out influencer marketing in China! You have got a healthy sum to put toward a campaign! You have a good idea on how you would like the influencers to communicate your message to their audience. After looking at some profiles of the KOLs, you decide who you want. But after getting their quotes, you are astonished! Just one of those influencers already maxes out your budget! This can be the case with a wide range of marketing activities, and getting the best value from your spend is key. The same applies to influencer marketing in China.

There is no one straight answer to best use your budget. A lot will depend on your brands current exposure in the market and what your goals are for the campaign. Is it brand awareness in China? Are you launching a new line, or bringing exposure to the opening of a new physical location? Lets look at some of the situations you may be in and how best to get value for your buck.

New brand in China

In this case you want to get most exposure to your brand through influencer marketing. The first thing to do is to register your very own Weibo and WeChat verified accounts. You will be able to post branded content and interact with potential consumers. When the time comes to launch your first influencer campaign, there should already be a good amount of content about your brand online. When users search for you, they should be able to easily find your social profiles. Post high quality content and interact with every comment. That’s how consumer trust is built.

Once you have some content up, you need to work to create a buzz among a focused audience. It is best to target audiences of smaller niche influencers or micro KOL. These niche KOLs have an engaged and dedicated following. In China a micro KOL is an influencer with less than 100,000 followers. Their costs are relatively low for a post, between 3,500 to 10,000 RMB.

Establishing Online Presence in China

After a couple of months of consistent posting, your official account should have a good number of engaged followers. Now that your brand has a nice presence on social media, you want to grow the brand exposure to a wider audience. Engaging mid tier KOLs, around 300,000 to 800,000 followers, you will reach a larger general audience. These KOLs will cost you between 10,000 and 25,000 RMB per post.

At this stage you have reached a large number of your targeted consumers. Your brand needs to “blink” in front of the consumer almost constantly. Consumers in China need 7-8 brand touch points before making a purchasing decision. So, it is very important to maintain your brand presence online.

 

Getting Large-Scale Exposure

Finally, you might want a macro KOL to endorse your brand. It will reinforce the message that users have already seen online a few times. This will a large-scale positive association with the brand for the future. Macro KOL will have 1M + of followers and can cost anywhere from 15,000 to 150,000 RMB. Fees vary greatly depending on the industry the KOL is in, how often they engage in paid campaigns, and if they have been paid high premium in the past. Talent influencers, who are an actor, a singer or similar, will charge much higher fees as well.

If your brand has an existing presence in China, you might take a slightly different approach. It would be worth investing your funds into mid and macro KOL from the beginning of your influencer marketing efforts. Authentic content and genuine posts will assert your presence and grow your credibility. Consider live streaming and video content to show more on features of the product, focusing on the value the product can bring.

 

Strategy for Large International Brands

An intentional well-established brand, like Nike, Gucci, Bobbi Brown etc., would benefit from engaging macro-KOL. Think someone with a following of over 5 million. It can even be a celebrity, like an actor, singer or an athlete. This is more of an endorsement of a product and can create buzz around your brand. In this case, you are looking at 250,000 RMB + for a post on Weibo. It is difficult to assess direct ROI from such endorsements, and should be seen as a brand awareness and brand image investment. Engaging mid-range KOLs is still very important for best campaign results.

 

Key Takeaways

Influencer marketing in China is a very tricky business, and having the right partner by your side is crucial. Remember to constantly revisit and update your social media strategy to stay relevant. Engage influencers as often as you can, and engage with your fans online.

Experiment and test. There is no magic formula to online success. After a couple campaigns, you will get a feeling for what works well for your brand. You will also find the best influencers who are natural fit for you, who will consistently deliver great results.

At iconKOL, we work with each client to understand your goals for influencer marketing in China. We craft a tailored strategy for each campaign, and pick the best KOLs for your brand. With our long-standing and trusting relationship with KOLs in our talent base, your brand can get the benefits of a long-term relationship from the very beginning.

Offering UnionPay May Entice Chinese Travelers

November 12, 2017

When UnionPay arrived on the scene in 2002, merchants and consumers around the world likely had no idea how explosively it would grow. Moreover, some merchants in North America and other locations are now discovering how essential it is for them to offer this payment option if they want to entice global Chinese travelers.

In fact, UnionPay, which is sometimes simply called U, was developed in the People’s Republic of China with the backing of the government. The company was meant to provide payment processing for four of the main banks in the nation. Now, it is the third largest payment processing organization in the world, coming in just behind Visa and MasterCard.

Chinese travelers tend to prefer having a familiar way to pay. The company’s services were first adopted by retailers of luxury goods. Now, they are accepted by retailers of all descriptions.

Trends show that the company may soon surpass well-known giants Visa and Mastercard. Chinese travelers increasingly are traveling abroad, and they show a preference for familiar payment methods. WeChat Pay and Alipay don’t have the global prominence that their competitor has achieved yet, but merchants who look into their payment processing abilities are likely to benefit.

Marketing material from the company boasts about 80 percent penetration in the United States and Canada. This means that global Chinese travelers are much more likely to find a convenient and familiar way to pay for goods, services, and experiences while exploring North America. ATMs in all 50 states may be used for withdrawals, and about 90 percent of Canadian ATMs permit the use of the card. If more players in the tourism industries in the United States and Canada get on board with offering this option for international travelers, they stand an excellent chance of expanding their customer base.

The appeal of adding UnionPay may grow if the company consents to make its mobile payments available in America. WeChat Pay and Alipay both have mobile payment capabilities in North America. While their main Chinese competitor has unveiled mobile payment options in Canada, they have yet to do so in the United States. Known as QuickPass, it gives consumers the ability to make payments via tapping of cards and with smartphones that are NFC enabled.

While Chinese companies seem to be making headway in other countries, the same cannot be said for world competitors Visa and Mastercard. Both companies have been unable to operate in China. The government is requiring them to form joint ventures with Chinese payment processors if they want to enter the market. Thus far, no progress has been made.

Nonetheless, there is little excuse for merchants in North America to not consider adding U to their range of options for accepting payment. Early adopters were considered forward-thinking, and Chinese travelers were delighted to find a familiar way to pay. Now, those same travelers expect the convenience of a familiar payment method wherever they go. Not providing this option may mean losing out on considerable revenue.

 

SINGLES DAY 101: What is 11.11 and why you will keep hearing about it

Tonight is the night all of China doesn’t sleep. Tonight is the night we’ve been waiting for the whole year. Tonight is the night we stay in the office until midnight to get faster internet. Tonight is the night. What am I talking about? The world’s biggest online shopping event is upon us, my friend, and no, it’s not Cyber Monday or even Black Friday. Unless you live in China, you probably don’t hear much about November 11th “Singles Day,” or “Double Eleven.” It is the largest so-called “shopping festival” of the year in China and the largest shopping event of the year in the world.

Originally started by Alibaba’s Taobao and Tmall as a social campaign, now it is a shopping frenzy that takes over the entire country, lasts almost a month and covers most e-commerce websites and even offline locations.

Even I myself may or may not have fallen victim of everyone’s excitement over Double Eleven and had my shopping carts filled with Korean skincare ready for checkout over three weeks ago. Who am I fooling, I totally had.

 

Origins of Double Eleven and different motivations for online shopping in China vs. the West

Double Eleven or Singles Day started off as a social media campaign for single people to treat themselves to something nice, a sweet gift for yourself beloved. Since you didn’t get spoiled by your non-existing lovey on the Valentine’s Day, Singles Day was your time to shine. The main motivation for shopping is an indulgence and treating yourself. Shopping holidays in China also aren’t tied to any particular social events, like Christmas or New Year. Double Eleven is a “made-up” stand-alone holiday, that now grew into a social phenomenon.

On the other hand, in the West sales seasons are closely tied to events like Christmas, New Year, and Easter. And the main motivation behind shopping is gift-giving and spoiling your loved ones rather than spoiling yourself.

 

How do shopping holidays like 11.11 shape consumer buying behavior?

Obviously, consumers love shopping festivals because they can get amazing deals. Following Alibaba’s success with Double Eleven, other shopping platforms have launched their annual shopping holidays. For instance, JD.com (largest e-commerce website in China after Tmall and Taobao) has “618” for June 18th, Suning.com has “818” for August 18th, VIPshop has “128” for December 18th and other smaller ones. So, now consumers are getting increasingly spoiled with the seemingly never-ending shopping holidays with discounted items in every category. Beyond annual shopping holidays, there are also shopping seasons around International Women’s’ Day and Valentine’s Day, where brands again fight for consumer’s wallet share with deep discounts.

Consumers are evolving

With an increasing online shopping frequency, Chinese consumers are very active and shop online almost on a daily basis. At the same time, shopping behaviors are evolving. Consumers from Tier 1 cities (think Beijing, Shanghai, Guangzhou) are becoming more and more rational about their spending and are less influenced by discounts, while consumers in Tier 2 cities (think Wuhan, Chongqing, Nanjing) and below are still very rash in their purchasing decisions.

Brands are evolving

Brands are also evolving their marketing strategies, as shopping holidays are becoming more and more widespread. Previously 11.11 was only about price promotions and discounts, however as more and more brands started to participate in the festival, discounts alone became not enough to capture attention during this madly competitive time. On top of that, brands don’t want to devalue themselves and give too deep of discounts. So, now we can see more sophisticated brand interactions and marketing strategies around the event.

As an example, Ctrip, a popular travel booking website, and app in China cannot afford very deep discounts in the already tough-to-be-in tourism industry. So instead of deepening discounts and cutting their bottom line, they attract consumers by providing additional value to the travelers. Throwing in add-ons like free airport pick-up, free hotel upgrades, free wifi on the plane and such does the trick.

Festival itself is evolving

Double Eleven itself has evolved from being just a simple and straightforward 24-hour long promotion over November 11th to an almost a month-long event. Consumers can interact with brands in a more meaningful way, and also shop over a longer period of time. Consumers even have an option of paying a small deposit to “secure” a deal almost a month in advance (see examples below). And brands build up the excitement with “sneak peek” sales on select items before the holiday itself.

 

How to Adapt Your Brand Strategy? 

E-commerce platforms see the problem with a purely price-driven promotion, so they are willing to try something new. Tmall is shifting 11.11 from a discount-centered event to more of an entertainment event focused on brand interactions. For instance, this year you could play an AR game, with a similar feel to Pokemon GO when you can walk around town picking up 红包 (hong bao or “Red Packets”) with store credits to shop at different brands.

Other cool features rolled out by Tmall include AR try-on lipstick and makeup, featuring brands like L’Oreal pioneering this initiative. These brand interactions are not directly related to the price of the product, however, they’re all launched during 11.11 in the name of the holiday.

Consumers in China are becoming more complex and sophisticated. They are looking for a brand that will surprise them, educate them, inspire them, not just give the lowest price. Shoppers also focus more on reading the reviews and finding the right product that will fit their needs rather than be sorting by price low-to-high and getting the first option.

Additionally, brands need to align all of their communication channels to have the same message. Even though 11.11 is an Alibaba (Tmall and Taobao) event, brand’s JD.com store cannot look like nothing is happening, brand’s official WeChat account should reflect the promotions. Consumers will get confused by inconsistent messaging, so make sure to speak same words across all platform during Double Eleven.

 

How to Attract People to Spend with the Brand Constantly?

Brands need to be working year-round to build a meaningful connection with the consumer and foster loyaltySo, when the next 11.11 comes around, consumers will come to your brand and spend with you rather than a competitor. Platforms like WeChat are ideal for cultivating a loyal following for your brand and your products, providing a more sustainable growth all year round.

Rewarding your loyal customers with deeper discounts over shopping festivals has proven effective for brands like Sephora. They have set up a loyalty program where depending on how much you’ve spent over the year and how many times you shopped at their locations, you’ll be awarded a different rank with a different discount.

Every brand offers about the same 20-30% off, so unless you can afford to give out a deeper discount, it is difficult to get attention from the consumer. So, engage with your followers, and during Double Eleven reward existing customers rather than try and get new ones. Keep in mind that Chinese consumers are also very smart and savvy account cross-checking prices across different platforms during different months, so any kind of price manipulation will not go unnoticed.

 

PC or mobile?

This is probably one of the most commonly asked questions: which devices are more popular when shopping online and how to adjust your marketing strategy accordingly?

We know that 82% of transactions for Tmall, Taobao, and JD happen on mobile, and people hit the “checkout” button on their smartphones more often than ever. To ride off this wave, Alibaba kick-started Double Eleven season this year with a “See now, Buy Now” fashion show. Consumers were encouraged to buy in the moment as soon as they the see the garment being shown on the catwalk, rather than adding it to the cart and then purchasing it later.

 

UNIQLO also hit the sweet spot of the “look at me” mentality of young Chinese consumers. The brand also understood that social interactions, especially on WeChat, are absolutely paramount to brand’s success. The Japanese brand created special fitting rooms, where you could be “teleported” to different scenic spots around the world while wearing a UNIQLO outfit and then take a photo of yourself and share it on WeChat Moments.

So, with all of these successful case studies about the usage of mobile for shopping, it’s easy to assume that we can abandon PC’s altogether and focus on mobile, right? But it’s not so simple. Because now consumers spend more time on picking the perfect product for themselves, reading comments and reviews, doing it on a larger screen is simply more convenient. Also, most of that browsing happens during the working hours, and you can’t be on your phone in front of your boss. So, even though the “checkout” moment happens on mobile in the evening when you’re back home relaxing, the picking and choosing part happens on the PC in the office.

On top of that, there is a generational difference between people born before the 80s and after 80s. For instance, when it comes to booking international travel, if you are born before 1980, chances are you’re shopping on your PC. If you’re born after 1980, you’re shopping on mobile.

 

Fun Stats for the Conclusion

  • Alibaba got $17.8 billion in revenues from last year’s Double Eleven
  • Cyber Monday brought in $3.4 billion
  • Black Friday made $3.3 billion

Cheers and happy shopping!

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Written and edited by Anna Khegay, co-founder and CEO of iconKOL, and influencer marketing agency based in Shanghai.

Uncorking a Wine Business in China

Wine is becoming a huge business in China. The boom is driven by numerous economic factors. While the market for wine in China is growing in leaps and bounds, it isn’t easy for western vintners and distributors to take advantage of these opportunities. Cultural and marketing obstacles are everywhere. We have studied the situation in depth to give our clients an insider’s view of the burgeoning Chinese market for wine.

 

Our findings are based on a recent campaign that we managed for a French wine distributor that’s housed in Beijing. What we learned can easily be applied to other distributors of western wines who are looking to break into the market in China.

 

Alcoholic drinks have been known and enjoyed in China for centuries. In fact, a traditional, grain-based drink known as baijiu has been used to commemorate special occasions for approximately 5,000 years and is widely considered the country’s national drink. However, baijiu is known as a “man’s drink” thanks to its 50 to 60 percent alcohol by volume content. That tradition has left a large segment of China’s population, namely women, unserved because it is not socially acceptable for women to consume beverages with such high alcohol content.

 

It is little surprise then that women are in many ways driving the increased demand for wine in China. They are seeking a drink that is more suited to their tastes and doesn’t have the alcohol content that is similar to that of baijiu. As China’s culture evolves, it similarly is becoming more acceptable for women to consume alcohol at social occasions. More women also are joining the workforce and accordingly are drinking more often in an effort to put themselves on the equal footing with male counterparts.

 

Men also are increasingly looking to wine as a complement to meals and various social occasions. The increased demand from men and women is coupled to an economic boom that has led to explosive growth in the Chinese middle class. As a growing number of people acquire disposable income, the interest in wine is increasing. That’s because they can now afford to buy an imported beverage rather than just the local baijiu.

 

Another factor that helps to explain the boom in imported wine sales in China is that people tend not to trust local brands. Consumers in China are convinced that foreign wines are inherently superior in quality to local alcoholic beverages. This perception comes after years of regulation of the local alcoholic beverage market by the Chinese government, which included several programs aimed at discouraging the consumption of alcohol. The truth is that the Chinese public is thirsty for imported wines, but they need access and a guiding hand to help them make wise choices regarding which vintages they buy.

 

When western wine firms first began marketing in China, they focused their efforts in large cities like Shanghai and Beijing. While these cities do have enormous populations, the reality is that China has a far larger population that lives in rural areas and smaller cities. This creates a dilemma. How do western firms market their wines to Chinese consumers who are eager to try their product?

 

With wine sales in China being expected to grow by nearly 40 percent by 2020, answering that question has become imperative. Unfortunately, traditional marketing methods that are successful in the west rarely make an impression in China. The cultural divide is too wide.

 

As with many western products that are looking to break into the market in China, the answer is to find social media influencers who can get the word out. People in China tend to trust the word of a social media celebrity far more than they do a traditional advertising campaign.

 

That is vital because experience tells us that the Chinese consumer likes a recognizable brand name. If someone they trust recommends a particular wine label, shoppers will seek it out the next time they are looking for a bottle. They are far more certain to do this after being introduced to a brand on social media than they are if they see a brand promoted through more traditional channels.

 

The fact that social media is deeply embedded in the Chinese culture cannot be overstated. Incredibly popular platforms like WeChat and Weibo are loaded with influential users who have thousands of followers. With a well-placed mention from just one or two key opinion leaders, a western wine distributor may discover a large new market for their product.

 

Many Chinese people are still in the early stages of educating themselves about wine. The difficulty of marketing to them is part of the reason why certain wines, like champagne, have been slow to catch on in the country. People just don’t know much about wines, which may make them reluctant to branch out to try new labels. However, if a vintner could connect with an influential person on Chinese social media, they would soon see a wave of interest in their product. A well-placed endorsement from someone with a devoted following is precisely what’s needed to become a familiar brand to Chinese shoppers.

 

Successful influencers are good at educating their followers who are eager to learn and experience new wines and champagnes. One blogger advised her followers to explore the sweeter range of champagnes – extra dry and demi-sec cuvees – in response to complaints that brute is too high in acidity.

 

Authentic content also helps to resolve multiple translation issues – from brand name to specific descriptions of wine nuances.

 

Of course, the difficulty is finding the right influencers to get the campaign started off on the right foot. That’s where iconKOL comes into the picture. We have the inside track when it comes to finding bloggers in China who are key opinion leaders. That means that we can help western companies forge effective connections with bloggers who can help them establish their brand in China.

 

 

 

 

Search Engines in China

Search Engines in China

When it comes to search engine marketing in the west, companies are on familiar ground. They know that Google dominates the landscape, and they know precisely which approaches yield great results.

Unfortunately, those approaches don’t translate well in China. Google left the country in 2010 over censorship issues, which means that Chinese companies have developed their own alternatives. They have done so successfully. It was an essential effort considering that China boasts over 700 million Internet users. That number is likely to grow in the future. This means that it is critical for western advertisers to make as much use as possible of search engine marketing in China.

The rate of Internet user growth in China surpasses the rate of growth in any other country. With search engine marketing, it’s possible for western companies to reach an incredibly vast audience that might not otherwise ever hear of their brand.
In December of 2015, the Chinese Internet Network Information Center, or CNNIC, released a number of interesting statistics. One of the most important of these numbers was the fact that 566 million people in China regularly use a search engine. This means that a full 82 percent of China’s Internet users are seeing search results on a near daily basis.

Another critical statistic cited by the CNNIC tracks growth of approximately 44 million users on a year-over-year basis. Compare that with numbers in the U.S., where there are 219 million users of search engine services in 2016, representing growth of just four million over the previous year’s estimate.

Google’s 2010 exit from China left something of a vacuum, but Chinese search engines have been quick to fill the void. Three contenders have emerged at the top of the heap. Baidu boasts a 54.3 percent share of the market, but Qihoo 360 is coming on strong with an estimated 29.24 percent share. Sogou, with its special focus on content marketing, currently holds an approximate 14.71 percent share.

In line with its dominant share of the market, Baidu also leads the way in advertising revenue with Qihoo 360 and Sogou trailing it. Statistics say that 2015 search engine advertising revenue reached 68.26 billion RMB, which is the equivalent of 10.55 billion in U.S. dollars. That number is expected to rise significantly in the coming years.

Understanding more about the strengths and capabilities of each of the three most successful search engines in China is key for companies that are hoping to gain a foothold in the country. A brief description of each follows. However, it is generally considered inadvisable for western companies to try to go it alone when it comes to starting a search engine marketing campaign in China. Instead, it makes a great deal of sense to forge a partnership with a company that has long-term expertise in the area.

1. Baidu (百度)

While Google has become noun, verb and a favorite search engine for Americans, Baidu has done the same for the Chinese. People in China who wonder aloud about anything are often told by others to “Ask Mother Du.”

Baidu was created in the year 2000, and it quickly became China’s leading search engine, a status it continues to hold today. Alexa.com has named it the fourth most visited website in the world. With an average six million searches being performed every day on the platform, it’s easy to see how it attained that rank. Baidu is also the revenue leader by a large margin over the other most used search engines in China. With an 54 percent share, Baidu plainly dominates the field.

It does so by offering some unique features that can’t be found on other Chinese search engines. For instance, the company claims to have a unique understanding of both the Chinese language and people that allows them to offer superior services. They use an example of the word “I,” which they say the Chinese people have nearly 40 different ways of saying. The software’s ability to distinguish between each of these uses makes it more capable of delivering relevant results.

Baidu also features a full menu of products that are designed to enhance the user’s experience. Ranging from articles and encylopedia-like entries to more informal options, these products often appear in the first several search results. That’s because Baidu places more weight on search result hits for its own products.

Baidu is an excellent platform for search engine marketing by western firms. With free analytics tools and a multitude of free products, any company may be able to thrive with Baidu as a partner. This search engine’s ongoing popularity makes it the standard of comparison against the other main competitors in the market. Baidu is also ahead of the curve when it comes to fraud protection and security.

2. Qihoo 360 (奇虎 360)

Developed by an Internet security company, Qihoo 360 was able to take a good share of the market when it first appeared by packaging its anti-virus software and other security products with its search engine capabilities. The company is also behind the 360 Internet browser, which has Qihoo 360 as its default search engine.

Although it only launched in 2012, Qihoo 360 quickly became Baidu’s closest competition. It has managed to do this by claiming to be the Internet’s most secure search engine. With the powerful security features of the parent company at its disposal, the search engine is easily able to block malicious or fake websites. This promises a much more reliable experience for users. Qihoo 360 has also managed to grab a larger share of advertisers by targeting its efforts to smaller and medium-sized firms that may not be able to afford Baidu’s advertising fees.

Western firms may appreciate that Qihoo 360’s search results pages don’t contain as much advertising as Baidu’s. This means less competition and more visibility all at a lower price point. Still, Qihoo 360’s share of the market is much smaller than Baidu’s, making it important for companies to consider using it as a secondary advertising channel while reserving larger efforts for the dominant search engine.

3. Sougou (搜狗)

This search engine is much smaller than the other two. Nonetheless, there may be important opportunities to explore here for an increasing number of western firms. First established in 2004, Sougou did not see widespread use in China until far more recently. That is due in part to the company’s development of an extremely popular input software, but mostly because of a substantial investment by Chinese Internet giant Tencent. Tencent is the world’s fourth largest Internet company in addition to being the proprietors of China’s incredibly popular WeChat social media platform.

Tencent’s investment came in 2013, with the result that Sougou became considerably more high profile. The search engine became the sole source of results from WeChat content, which means that WeChat fans, of which there are millions, may be more likely to use this search engine. This integration with WeChat worked so well for Tencent that the company forged another partnership with a well-known question and answer website called Zhihu. Continued growth for Sougou is expected, especially since the announcement of an upcoming partnership with Microsoft’s Bing search engine. Sogou has also launched English and Scholar search tools to broaden its appeal to niche markets.

Sougou is busily establishing itself as a content search provider. As such, it can prove to be a valuable partner for content marketing efforts.

With millions of Chinese using at least one of these search engines on a daily basis, western firms that hope to establish themselves in the country can’t afford to ignore this marketing channel. However, it’s also important to understand that search engine advertising in China requires a different approach than what may be useful and effective on western search engines like Google. Intimate, high-level knowledge of the peculiarities of Chinese search engines is required to succeed.
By Anna Khegay

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