The economy behind influencer brands in China

By Daniel Ma

Since the end of 2014, online influencers have become an important economic driver in Chinese society. These are the people who create their own fame online, or on social media: they build up a following, and then leverage their fame and influence into a fortune. Not only are individual people talking about it, but also all companies want to be part of it, no matter which industry they are focused on.

Once they have enough subscribers, the influencers creating their own unique brands is no doubt the most direct and profitable option for Chinese online stars to choose. This is distinct from the online influencer simply being paid to endorse a third party’s products.

The influence of influencers

Influencer brands are directly registered by the influencers themselves, who use their social power to sell products. The products will be designed or in some way branded by the influencers, and are then sold on online platforms like Taobao.

It looks boringly simple, right? Everyone can register a brand, in any country you like. But no one can sell millions of dollars worth of products with a name that has just been put to market. Those brands you are familiar with used decades build up their fame, before they started earning big money. Online influencer brands sidestep this problem: their name is already prominent on account of their social media activities.

Zhang Dayi, a former model who sold personalized fashion packages to hundreds of thousands of Chinese is one of the top influencers. She reportedly grabbed more than RMB 300 million (USD 46 million) in revenue through her brand in 2015. Aside from herself, there are about twenty top social media influencers in China; “top” usually is defined in this case as the ability to sell more than ten million RMB worth of product each month.

Why have influencer brands shown such an unbelievable performance? Are there some tricks that others don’t know? The answer is yes.

Sponsorship is a double-edged sword

If a social media personality promotes another company’s product on their page, everyone knows that they must get some benefit in return.

But people are not stupid: if they think a web celeb is introducing too many sponsored products to them, they feel insulted, and leave bad comments under those posts.

Introducing an influencer’s own brand to subscribers is different. Usually they just need be honest, and tell their fans why they want to do it. If they treat it seriously, their subscribers will show their support, and even their congratulations.

Influencer brands and celebrity brands are not the same thing

Some people would be wondering: is it the case that with enough followers, everyone can launch their own brand and make huge money? Some celebrities have more than ten million followers on social media, will they succeed if they start to sell products?

These questions lead us to thoughts on a deeper level: why do people want to subscribe to someone on social media, and make purchases under their advice?

Only if people really enjoy the content that the influencer produces, including how she dresses, how she does makeup, where she goes, and so on, will the influencer brand be successful. If they enjoy the content, online fans will think, “This is the life that I want! If I follow what she does, I can also have that life.”

Not everyone dreams to become a celebrity, it is an idea too far removed from normal life. But these online social influencers, the online stars, are just normal people. Many of them are in their twenties, or even still at university. This makes young spenders in particular feel close.

Listening to their audience and letting them feel close to the brand: that may be the key reason why influencer brands are so successful.

(Top photo: Zhang Dayi. From Baidu Images)

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