Why Bigger Isn't Always Better for China’s Overcrowded KOL Market

    A recent report by digital intelligence company L2 explores the booming KOL economy in China and offers tips for luxury brands.
    Screenshots from the Instagram accounts of some of China's most widely-known KOLs (Clockwise from upper left: Kris Wu, Gogoboi, Boy Nam, Boy Nam, Mr. Bags, Gogoboi.)
    Yiling PanAuthor
      Published   in Retail

    Touting their massive number of online followers, fashion influencers and key opinion leaders (KOLs) in China have marketed themselves to luxury brands by offering the possibility to boost brand awareness through leveraging their popularity. Nonetheless, luxury brands of late have become increasingly accustomed to offering high compensation in exchange for KOL endorsement without knowing whether or not their expectations will be met.

    A recent report by digital intelligence firm L2 has good news for luxury brands, though. The study finds that WeChat posts by fashion bloggers focusing on luxury brands usually generate higher engagement compared to that of accessible brands. However, there are also a certain number of principles that luxury companies have to understand in order to find the right match and make their partnership truly succeed.

    The report first suggests that the level of engagement that KOLs generate on social media is a better way to measure their potential effectiveness for a campaign than traditional metrics like following and viewership. When measuring the success of a partnership, L2 advises brands to look at the ability of the KOLs they collaborate with to direct followers into their customer relationship management (CRM) and commerce channels.

    “Engagement can lead to call to action," said Danielle Bailey, the author of the report and the head of Asia Pacific Research at L2. “Consumers are willing to follow [KOLs’] call to action, for example, providing their personal information to receive free samples, or go to the stores to redeem a promotion.”

    Not all KOLs are created equal. There is minimal correlation between a KOL’s account views and their engagement.
    Not all KOLs are created equal. There is minimal correlation between a KOL’s account views and their engagement.

    The report goes further to offer a closer look at the performance of major KOLs on WeChat and concludes that it is not always the case that KOLs with a larger following can generate better engagement. For instance, posts by Gogoboi, arguably the top fashion blogger in China, are not met with the highest level of engagement. Mr. Bags, another well-known influencer, likewise has a below-average number of likes under his posts. On the other hand, there's a lot more audience interaction with luxury posts by some lesser-known bloggers, including Yao Jing Bian’er and Mr. Kira.

    Therefore, L2 recommends luxury brands look beyond the top-tier fashion bloggers, who typically charge a lot for their endorsements, to target small and emerging ones. The conclusion coincides with what Louis Houdart, founder and CEO of branding agency Creative Capital, has experienced with his clients.

    ”My experience is that smaller KOLs/wang hong, with less followers, but highly qualitative ones, are usually better investment,” he said.

    Another dimension that luxury brands should be aware of is the emerging competition between Chinese celebrities and top-level KOLs such as Gogoboi, Mr. Bags and Li Bei Ka (Becky Li). Despite the fact that many prestige labels still prefer celebrities to bloggers when deciding who will represent their brands, the recent collaboration between Mr. Bags and Givenchy in January, and Burberry in May, as well as Li Bei Ka’s handbag collection with Rebecca Minkoff, both show that brands are enthusiastic about working with Chinese KOLs.

    “At the end of day, it is all going to be about who can generate the movements,” said L2’s Bailey. “Chinese celebrities definitely have an advantage over KOLs. Their audience is probably more in line with the traditional luxury customers, older with more money.”

    Looking forward, Bailey said she thinks Chinese fashion bloggers, even the ones on the top of the pyramid, are likely to experience hardship with their businesses amid the current overheated environment.

    “With more and more brands starting to [establish partnerships]," she said, "it gets sort of repetitive and could have diminishing returns and less impact."

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