The Rise of the Idol Economies in China

The rise of the “idol economies” in China is directly related to a digital transformation in the country as well as the emergence of a new, younger consumer base, which bonds differently with brands compared to older demographics.

Growing up in a world where consumers are always connected via their mobile devices, these Gen Zers choose “to consume shows, movies and other digital content on their phones, tablets, and laptops.” CNBC highlights how Gen Zers end up spending “about 3.4 hours a day online watching videos.” Consequently, engaging video content and livestreaming are the core of their social media habits.

Consequently, this live-streaming frenzy has boosted the KOL and idol industries in China, and despite the new regulations introduced by China’s Ministry of Culture (MOC) and the State Administration of Radio Film and Television (SARFT), the live-streaming market is still growing. The South China Morning Post and iResearch report that “sales revenue in China’s live-streaming market grew by 180 percent in 2016 and was worth 21 billion yuan (U.S. $3 billion).” Considering the potential of the market, it is not surprising that various platforms, content creators, live-streamers, talent managers, and influencers have emerged. But taking into account the size of the ecosystem, fans find it challenging to keep up with various KOLs and idols.

“There are very few people who can reach the top,” says Han Lin, who manages Weibo’s gaming content. Most of the live-streaming wannabes struggle to make ends meet, and in an already competitive environment, live-streamers have to go against idols who already come with large, hardcore fan bases. Indeed, at its outset, live-streaming was promoted by influencers and KOLs, but when the industry took off, celebrities and idols jumped in to take an important share of the market. Having said that, it’s important to note the subtle differences between idol 爱豆 and celebrity 明星. According to Pandaily, a celebrity is an actor, singer, entertainer or television host, while the idol is “a subgroup within celebrities that originally referred to good-looking and personable celebrities from outside of China, most often Japan or Korea.”

Why should brands partner with idols instead of influencers and live-streamers?

  1. Idols are lucrative

Pandaily quotes a recent report showing that nearly one-third of “Gen Z respondents said that they’d be willing to buy products that their idols endorsed, or the same products that their idols used, and a fifth would be willing to attend their idol’s livestream and buy virtual gifts.” Six percent even said they are willing “to spend money on their idol, every, single, day.” Additionally, a report by Entgroup points out that China’s idol market will be worth $14 billion (¥100bn) by 2020 “with fans contributing about half the total through consumption of products and services related to the stars.”

Young Chinese fans worship their idols, and they are more than willing to go the extra mile for their celebrity crushes. While in the West, “the pinnacle of fandom is watching the star perform live,” in China, fans use all means to protect their idols and make them more successful.

Recommended ReadingAre Virtual Influencers the Future of Luxury Retail?By Adina-Laura Achim
thumbnail
  1. China’s culture of celebrity worship

As mentioned above, in a fame-obsessed society like modern China, Gen Zers fawn over their celebs and idols and do the craziest things to display their commitment to them, from attempting to dethrone international stars in the ratings (which Kris Wu’s fans did in securing “the No 1 spot on the iTunes’ singles chart but also seven of the top 10 songs”) to buying out the entire run (120,000 copies) of a fashion magazine featuring a favorite member of the boy band TFBoys.

Idols represent an opportunity to connect with the affluent Gen Z consumer. “Young as they are, for now, the post-90s generation will soon play a key role, not only in the workplace and society but in consumption as well, in the next five to ten years,” says Liu Xiaobin, vice president of Nielsen China. In fact, analysts and marketers believe that Gen Zers are the future of luxury consumption. “While they work hard, they also enjoy the feeling of indulgence as a reward, even at a cost of drawing on the future, if the product is what they desire,” Liu adds.

  1. Chinese idols don’t have marketing phobias

Western celebrities generally run from sponsorship contracts because they feel that too much exposure could destroy their reputation. That, however, isn’t the case with Chinese idols.

Domestic celebrities in China are easily engaged in marketing and brand endorsement campaigns to sell products on various platforms. According to Pandaily, this is, in part, because of censorship. Projects in China get easily hindered or repealed, so idols need to make sure they find extra income sources.

  1. Fan culture in China is a group effort

Tom Doctoroff, Chief Cultural Insight Officer at the brand and marketing consultancy Prophet, told eMarketer that “Confucian culture is a combination of rules and regimentation, and [the idea] that the individual does not exist independent of his obligations and responsibilities to others.” This brand of collectivism that China’s known for implies that fans influence each other during the buying process, and studies show that “the more collectivist the person’s orientation, the more susceptible the person will be to social influence in the purchase decision.” Consequently, if Western brands conquer the heart of one diehard idol fan, they might have conquered the entire fan group.

The idol economy has value for marketers and retailers, but few international players have yet to monetize the fame of Chinese idols. This is mainly because Western brands still don’t understand the development of the Chinese fan economy and the young, hot-headed consumer group that supports these idols. We anticipate that the fan economy will continue to expand, and Western retailers who want to outpace their competition should seek out closer ties with Chinese idols.

Categories

Influencers, Trending in China