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China: Navigating Influencers in 2019

In a recent breakfast briefing, The Luxury Conversation looks at how brands keep ahead of the curve in the world’s largest luxury market.

2019 is a pivotal year in luxury for China according to The Luxury Conversation, a platform powered by marketing agency Reuter Communications which aims to connect those shaping the luxury fashion industry in China. On the surface little has changed for international brands seeking success on the mainland: they still need to work with partners, collaborate with influencers, be digital and think Chinese. However, despite what the media refer to as challenging times for the market (trade wars, slowing growth and Apple’s recent scapegoating), there is still much to be excited about in the world of luxury. While the allure of the influencer shows no sign of waning, new types of collaborators are emerging which offer more variety and greater authenticity for brands.

Vanessa Wu, director at Reuter Communications, reminds us that while much has been said of working with Chinese KOL’s (key opinion leaders) in terms of expense and uncertainty around returns, they remain vital to brands operating in China. Her firm identifies four main areas where working with tastemakers is important; these include attracting the mass market, creating noise across social, building credibility and cultivating brand loyalty. Of course, caution is advised - but such necessities in brand communication on the mainland can no longer be ignored.

In the briefing, The Luxury Conversation identified various shifts in the landscape which have added to the complications of working with such ambassadors. “In 2019 we are seeing a shift from the big KOLs to LOLs or local opinion leaders,” Wu explains. “These LOLs may not have a huge presence on social media but are real life influencers and are leaders in their own industries.” In addition to these new LOLs, micro influencers and tastemakers will bring a more organic, vertical and loyal following to brands: companies should give special consideration to targeting the niche influencer, industry insiders or those who influence the influencers.

According to guest speaker Queennie Yang, Asia editor at Condé Nast, Chinese consumers or brand followers tend to read articles in a wider variety of formats than their Western counterparts. This has a direct impact on how influencers operate in China, with Yang suggesting that they have to work much harder than their global counterparts: “They operate more like a media company - rather than just taking selfies. Most of the big ones have their own teams and publish very long, written features, beautiful footage and videos, etc. For example, Gogoboi,” - one of China’s top influencers, Ye Si - “who created a fully functioning interactive game on his WeChat platform for the latest Louis Vuitton exhibition.”

“The bigger question to ask yourself is, why are you working with a KOL and what is that success looking like?”

Chloé Reuter
Courtesy WeChat

As well as finding a reliable partner, brands will also need to be able understand that partner’s data, as Chloé Reuter, founder and chief executive of Reuters Communications, argues: “KOL’s are endorsing many products on a daily basis - some of them cost €50,000 for a couple of posts - and when you track this, from content to commerce, maybe they aren’t actually delivering that much for your sales.” She points out that, in terms of the challenges around quantifying the value of employing ambassadors, China is no different from the rest of the world: “Tracking the success of KOL’s is quite difficult and they command huge premiums but the bigger question to ask yourself is, why are you working with a KOL and what is that success looking like?”

Another trend mentioned was the New Luxury phenomenon. A term driven by rising consumer expectations, it denotes a demand for a service experience which combines international quality with a local touch. The ability to adapt and tailor global narratives has recently become crucial, suggesting that brands should focus resources upon making user journeys more culturally specific and local-friendly. Similarly, with digital competence now an almost universal given, brands are advised to cultivate relationships and accrue data through WeChat’s functions of social scanning and loyalty rewards. Counter-intuitively in today’s globalised world, it is, in fact, better to be focused and bespoke: companies were encouraged to pick one city, such as, for example, Chengdu - and to ‘go deep’ in lower-tier cities which are nevertheless brimming with potential. The message is clear. By 2025, 45% of luxury consumers will come from China: miss this opportunity and miss out on almost half a world.

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