With the finishing line in sight for 2020, brands are preparing for a new year and trying to forecast what the 2021 KOL marketing in China landscape will look like. Of course, COVID-19 made this year unlike any other, but some of the fallout from the pandemic merely reflected an acceleration of trends that were already in motion – consolidating the centrality of e-commerce, the rise of live-streaming, hybrid “phygital” events, and so on. The pandemic also forced some improvisations that will likely become permanent – in-store staff doubling as online sales concierges and live-streamers, for example.
So, what’s in store for 2021? In terms of the broad themes, expect to see a high degree of continuity with the trends of the past year. Live-streaming will continue to reign, though the battle for eyeballs between platforms is intensifying, and 2021 KOL marketing in China will have winners and losers. The next logical step for the KOL industry is the rise of the KOL-as-entrepreneur, and the coming 12 months may be a watershed year in that evolution. And with 5G rolled out across China over the past year, 2021 will give us a closer look at the practical ways the technology is transforming e-commerce. We’ll also get clearer confirmation of which platforms and businesses will be the early champions of the 5G era.
These are our predictions for 2021 KOL marketing in China:
Welcome to “V-commerce”: Douyin and Kuaishou will steal market share from Taobao, and video will be the gateway to generating sales.
Another potential game-changer for 2021 will be an explosion in “v-commerce”, as video comes to the forefront as a gateway to conversions. The arrival of 5G, allowing for faster streaming, has paved the way for v-commerce to mature as a format. Douyin has already tested in-video search on selected accounts, which could be transformative in terms of the ability to embed links to e-commerce within video content. As platforms ready themselves to do battle in the v-commerce realm, Kuaishou and especially Douyin appear to have an advantage over the competition. In contrast, e-commerce giants like Taobao and Tmall are less well-positioned to exploit the opportunities offered by 5G.
Live-streaming will continue to dominate the budget for 2021 KOL Marketing in China.
Douyin, Bilibili, and many other platforms had already established live-streaming as a dynamic force in social commerce going into 2020. However, China’s relatively brief encounter with COVID-19 gave live-streamers a boost, as millions across the country switched to live-streams both for entertainment and e-commerce. Under lockdown, the intimacy of live-streams provided at least a partial, if imperfect, substitute for in-person interaction. Many viewers have since retained the habit of viewing – and shopping – their favorite and most trusted KOL live-streamers.
Simply put, there’s nothing on the horizon that captures the imagination of either brands or content consumers quite like live-streaming. According to a report by EqualOcean, the live-streaming market is tipped to be worth more than RMB 80 billion in 2021, breaking the RMB 100 billion barrier by 2023. Even before COVID, live-streaming was turbocharging consumer excitement around e-commerce events like Singles’ Day. Headline live-streams featuring star KOLs teaming up with iconic entrepreneurs and Chinese and international celebrities have created viral talking points and driven one record-shattering sales feat after another. During the pandemic, live-streaming – along with innovative uses of VR and AR – was one of the key technologies that made fashion shows and other conferences viable in 2020, with some stunning results that could change the future shape of events.
We’re also going to see live-streaming formats take a new direction, with creators and MCNs forging a hybrid approach that will blend entertainment, promotions, and e-commerce. 2021 will likely be a transformative year for content creation in the live-streaming space. These reinventions will debunk any suggestion that the industry is running out of ideas. In fact, all these developments mean that if anything, brands will be committing a higher proportion of their marketing budgets to KOL collaborations and to live-streaming in particular. In fact, as e-commerce, social media marketing, and offline commerce become more tightly bound up, KOLs play an increasingly central role in the entire ecosystem. EqualOcean’s analysis forecast Gross Merchandise Volume (GMV) driven by KOL e-commerce to increase by 35 per-cent from 2019 to 2020, reaching RMB 107 billion for this year. They expect that impressive growth rate to persist through 2021 for a GMV of RMB 144 billion.
Bilibili will continue to gain popularity, truly becoming China’s YouTube.
Bilibili is building momentum to have a blockbuster year ahead, which is forecast to have a significant impact on 2021 KOL marketing in China. The past few years have seen the platform break out of its original anime and gaming niche to establish itself as a social network with mass appeal and content covering a broad range of content categories. In Q1 of 2020, it reported it had 172 million monthly active users – a 70 per-cent increase year on year – outranking competitors in the video space like Tencent Video and iQiyi. Although the platform isn’t yet turning a profit, it recently announced Q3 earnings of $466 million, up from $260 million one year ago. That success in generating revenue is just one-factor driving Bilibili towards a breakout year in 2021.
Bilibili’s focus on user-generated content has drawn comparisons with YouTube, in contrast to Tencent Video and iQiyi’s more conventional Netflix-style streaming services. Bilibili’s kaleidoscopic approach to content gives it a dynamic, broad appeal, and that’s part of what engages that huge Gen Z audience.
Another factor in capturing that young audience is Bilibili’s success at building an engaging community. The platform is known for the “stickiness” of its users, and the deep bonds they form with the influencers they follow. The platform’s famed 100-question test, which all users must pass before they’re allowed to upload content and post comments, helps create a sense of exclusivity as well as filtering out trolls and less committed users. Passing the test gives the user the right to contribute to the platform’s dynamic “bullet chat” feature, which deepens user engagement with the content and keeps them glued to the screen for longer. Bilibili has also evolved to become a major player in the live-streaming space, and we’re likely to see that continue to be an important part of the platform’s evolution.
We have entered the decade of China brands, and a major KOL will launch a brand with significant investment backing.
One of the most noticeable trends in Chinese marketing and branding over the past few years is the emergence of a fresh crop of homegrown brands across a range of sectors. Some have the ambition – and perhaps also the credentials – to compete on the world stage. But arguably more important for marketers is that many new brands are actively trading on a growing sense of pride in Chinese identity. Millennials and particularly Gen Zs are hungry for Chinese success stories and for brands that speak directly to their shared cultural background and lived experiences. Brands like Perfect Diary and Hedone are speaking a language that resonates with them, from product design to packaging and marketing messages.
VC money is lining up to invest in this incipient trend, and investors may be attracted by the promise of a brand fronted by a popular, recognizable, and marketable face. China’s KOLs are celebrities in their own right, at least among the younger millennials and Gen Zs who are going to define the next decade of marketing, starting with 2021 KOL marketing in China. Better still, the position KOLs occupy at the intersection of digital content, marketing and e-commerce means the biggest names in the influencer industry are perfectly suited to head up their own brands. It’s only a matter of time before one of the big names comes out with a game-changing venture – and 2021 may well be the year that it happens.