The Live-Stream “Incident” that Rocked China's KOL Market

Li Jiaqi is well-known to millions of Chinese women — from young, working professionals to high-profile Chinese actresses like Qi Wei and Lin Yun — but he’s not a movie star or in a boy band. He’s famous for his unparalleled live-stream sales records of makeup products, especially lipsticks, which has earned him the title of “the number 1 seller of lipstick” (口红一哥). “Buy it! Buy it! Buy it!” is Li’s catchy line, and it seems to work. Going from a beauty advisor at L’Oréal to a national internet celebrity with over nine million followers on Weibo in only two years, Li now earns an annual income of more than 1.4 million (CNY 10 million). His record of selling 15,000 lipsticks within five minutes on last year’s Singles’ Day remains unbroken. Since this year’s presale Singles’ Day launch, Li has gone viral online over the past few weeks. Li's success is a good example of how luxury brands are increasingly turning to collaborations with popular internet celebrities in China for results. However, a recent video of Li advertising for a non-stick pan, which is now being called the “rollover incident,” is making consumers question his credibility. In the video, Li called on viewers to purchase the pan, produced by Cooker King, by emphasizing how eggs would not stick to the pan and having his assistant demonstrate. But, sadly, the pan failed the test miserably, as eggs stuck to the pan’s entire surface. The incident, which seems to have weakened Li’s credibility, has sparked questions among Chinese netizens about the nature of KOLs and the live-stream medium. Brands cooperating with popular livestreaming hosts to get a share of the Chinese market has indeed been trending as it has certain advantages. “Live-streaming hosts have far better promotion skills than mainstream celebrities,” says Xintong Liu, a young female professional working in Shanghai who watches Li’s live-streams regularly to purchase beauty products and clothing. “I followed Li’s livestreaming because he could better explain the ingredients used in a powder or which situation each of the lipstick colors would be best in,” she explains. KOLs also have more time to interact with their viewers than celebrities, and their live-streaming practice usually takes around six or seven hours daily, which creates a sense of intimacy between KOL and viewers. And consumers are more likely to purchase a product once some trust is built. Though it seems to be extremely profitable working with these internet celebrities, brands need to keep a few things in mind. First of all, you would want to choose a KOL whose image, personality, and temperament fits your brand. “Choosing a KOL indirectly states that the brand affirms his or her style,” says Shuman Li, a Dior employee, who also said that Dior would tend to work with well-known KOLs with serious reputations rather than more humorous ones. Additionally, in working with KOLs, marketers also need to identify if a KOL is as popular as they claim. One anonymous former employee of a well-known beauty brand expressed her frustration at working with an internet celebrity, saying that 50 percent of their purchased products were returned after a livestreaming sale. This was attributed to many of the KOL’s viewers and consumers being “shui jun” (paid viewers). Finding a trustworthy KOL that also fits your brand name is the first step to success, but it’s not easy to find one as there are a limited amount of top KOLs available and they also need to be familiar with your product. A few companies have already started to train their own salespeople to become live-streaming hosts, as they know the products well already. Some Korean brands even invited Chinese KOLs to learn about their products on-site, so they could better represent their products. In addition to marketers looking for sales growth in China, other internet celebrities and consumers can also learn a thing or two from Li’s “rollover” incident. KOLs should obviously test their products first before live-streaming with them, but most importantly, not cheating viewers in any way for a higher commission from merchants is a no-no. Without the consumers’ trust, it’s very hard to sell anything. And for consumers, it wouldn’t hurt to be more critical of what KOLs say online and do further research, so they can make their own judgments.

The Live-Stream “Incident” that Rocked China's KOL Market

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Published November 26, 2019

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The Live-Stream “Incident” that Rocked China's KOL Market