How These 10 New KOL 'Rules' on Weibo Could Affect Luxury Brands in China

The Purported Rules If you're a KOL with a Weibo account, don't even think of linking your post to any e-commerce website other than to one of Alibaba's properties. So says one of the 10 alleged new rules that Sina Weibo has recently implemented to regulate its gigantic KOL ecosystem, according to ParkLu, a digital advertising platform that connects China's online influencers and brands. Without further ado, here are the rules ParkLu posits: 1. Link blocking to all e-commerce sites, except Alibaba properties. 2. KOL accounts need to seek permission before promoting more than one brand in a single post. 3. All posts with external links will receive a 20% media exposure penalty. 4. Posts containing plagiarized content will receive a 50% page weight penalty. 5. Posts containing long form images will receive a page weight penalty. 6. Accounts that only repost will receive a page weight penalty. 7. Posts containing a QR code will receive a page weight penalty. 8. Posts that mention WeChat will receive max page weight penalty, limited to 10% total visibility. 9. Accounts that mention a marketing, sales, or advertising businesses could receive a page weight penalty. 10. Lucky draw campaigns must use Weibo's official lucky draw function or receive a page weight penalty. ParkLu contends that these 10 new rules, though not officially announced by Sina Weibo, have been uncovered by the agency based on talks with their insider sources, KOL surveys, and independent testing. If they're true, they could have a huge impact on luxury brands' businesses in China, as brands and KOLs have formed a symbiotic relationship in recent years. Sina Weibo have not responded to our request for comment. "It just matters to KOLs and brands because their livelihood or sales depend on successful posting," Elijah Whaley, the Chief Marketing Officer of ParkLu, told Jing Daily over WeChat. Some well established online fashion bloggers including gogoboi, Mr. Bags and Miss Shopping Li all fall into the targeted group of the new rules. Luxury Brands Now Have to Consider the Cost of the Gatekeeper: Weibo For the past several years, many luxury labels have benefitted from the promotion by online influencers of their products and services, especially those influencers with large followings. Brands also frequently use them as a bridge to better understand the interests and preferences of Chinese consumers. Sometimes they'll even collaborate with bloggers to launch events and release new collections because a carefully selected KOL can generate much more engagement than any one brand's official social media account can. However, if the new rules have indeed come into force, KOL accounts now have to seek Weibo's permission if they hope to promote more than one brand in a single post (Rule #2—as per ParkLu's list), and pay to mention any marketing, sales and advertising businesses (Rule #9). "Luxury brands need to take these new regulations into account when working with KOLs," said Kim Leitzes, the CEO of ParkLu, when explaining the underlying implication of the new rules on luxury businesses. "There is the cost of content creation, distribution and then the gatekeeper (Weibo)." Leitzes also pointed out that the rule about "the blocked links to non-Tmall sites" (Rule #1) is going to pose some huge challenges to the operation of the luxury and fashion e-commerce sites such as Farfetch and Yoox Net-A-Porter in China. "Their investment in Weibo for traffic is jeopardized," she said. The Rules Are Related to China's Heightened Regulation and Competition of Alibaba and Tencent However, the new purported Weibo rules did not come as a total surprise. Whaley viewed the action as resulting from a combination of the recent heightening of online regulation by the Chinese government as well as the growing competition between China's two internet giants Alibaba and Tencent. "Some of these rules are believed to be related to new Cyber Laws, others are protections against zombie style accounts," said Whaley, "and some are believed to be directed at companies like Tencent." Therefore, Whaley contends, luxury brands in China have to embrace the new reality, which is that they "need to start promoting their e-commerce stories in natively accepted social platforms, namely, JD.com for WeChat and Taobao and Tmall for Weibo."

How These 10 New KOL 'Rules' on Weibo Could Affect Luxury Brands in China

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Published June 14, 2017

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How These 10 New KOL 'Rules' on Weibo Could Affect Luxury Brands in China