From Alibaba and Richemont’s investment in Farfetch, to VF Corp’s buying Supreme, the events of these last few weeks indicate that COVID-19 has not slowed down the signing of deals and partnerships in fashion. Today, brand performance cloud company, Launchmetrics, acquired China’s leading KOL analytics platform, PARKLU, for an undisclosed sum.
The two companies had been chatting for a while, but no doubt the deal has been accelerated by the digitization of things due to COVID-19. Since the outbreak, the China market has shown itself to be fairly immune to the devastating impact of the virus through its unique digital idiosyncrasies. Livestreaming flourished while e-commerce was used for luxuries, entertainment, and even the essentials.
Now more than pre-COVID-19, access to the China market is the primary concern facing brands and CEOS all over the world. The numbers from luxury leaders like Hermès, LVMH, Dior, Givenchy, and Celine already show the success of their localized e-commerce strategies. Yet, quantifying return on investment or how the impact of a KOL hired to promote a brand is tracked, and how to justify fees paid to influencers, can be difficult to gauge.
With this move into China, Launchmetrics hopes to clarify open-ended data and help brands looking to launch in China to get a head start. “For us, it’s been critical to understanding how we can help our customers, including companies like say, LVMH, to be in a better position in China when it comes to integrating data into global landscapes,” Michael Jais, CEO of Launchmetrics told Jing Daily.
“The logic behind this is to get all the data — in the West and in China — and work out how can we better understand the ROI from campaigns and manage budgets, which is even more important now than even two years ago.” In the past, Launchmetrics’s performance technology has aided Dior, Fendi, and Shiseido, as well as the CFDA and Net-A-Porter.
Given recent advancements in China, luxury brands, retailers, and federations must keep up to date with trends and market localization or risk becoming irrelevant. PARKLU’s 10-year history in the influencer sphere (and access to 100,000 KOLS on a variety of mediums from WeChat to Douyin) means this partnership should supply companies with the most effective tools in the region to calculate metrics. This new merger will allow companies a consistent view of a campaign’s impact at scale and across regions.
CEO of PARKLU, Kim Leitzes, explained that these analytics help brands to understand which voices are worth maximizing and, just as importantly, what percentage of budgets should be allocated to which social platform. “In the past, we’ve been able to make these choices on intuition. Now, in China, the options change so quickly —you need access to data to back up these choices.”
This is what PARKLU’s reputation is based upon: collecting insights and analytics behind KOLs’ collaboration with brands. And, not only does PARKLU’s acquisition provides a valuable route into the market for Launchmetrics, according to Tom Griffiths, Commercial Director of Verb China, this specific sector is typically more opaque than other traditional markets.
“The proliferation of KOLS over the years has left many brands without the means to simply and accurately predict their effectiveness before paying for a collaboration,” Griffiths said. “The fees some KOLs command mean that for brands and agencies, trialing one that doesn’t work could eat away a significant percentage of that year’s budgets.”
Platforms like PARKLU have filled this information gap by providing a 3rd party verification of their reach and effectiveness. As the importance of KOLS, influencers, and ambassadors only increases, the demand for better access to tools and analytics to maximize a brand’s spend on them will only grow too. Put simply, more tools help make better decisions and ensure budgets are best allocated.
However, amid the global emphasis on data, one note of caution comes with regard to the commodification of the KOL relationship. Griffiths pointed out that brands seek long-term creative partnerships; relying too heavily on the data for a selection of KOLs might risk missing out on ones that have a more genuine connection with a brand.
“The best partnerships I’ve seen often originate from organic interactions from an influencer, which then evolve into something more collaborative. These more complicated but meaningful relationships are difficult to judge based on analytics and impossible to manage through a platform,” he added.
For Launchmetrics, this new partnership with PARKLU extends its vertical from fashion to luxury, beauty and lifestyle more globally. Their two CEOs hinted to some colorful collaborative projects in the future but, for now, these remain under wraps. When pressed on future acquisitions, Jais was equally intriguing.
“It’s very important to understand what drives the emotional and cognitive connection that has been felt by the customer. How AI will help in that will become critical,” he suggested. This tie-up not only confirms the importance of China’s data for brands but also indicates the sophistication and breadth of digital innovation coming from the country.