At PARKLU, we often have startups and new brands come to us with a China market entry strategy that neglects the KOL marketing challenges for unknown brands.
They anticipate that KOLs will generate sales conversions and incredible ROI almost overnight.
We totally understand where this is coming from: Marketers have to get tangible results – the faster, the better. However, an expectation of immediate returns is unrealistic for brands that have not laid the groundwork in China. In other words, they need to focus on awareness generation before they can expect KOLs to deliver dramatic results.
KOLs are not a one-stop-shop that will solve all your marketing needs, and KOL campaigns are not an excuse to slack off in other areas. KOLs are just one touchpoint (albeit a powerful one) along the consumer journey, and they need to be integrated into your overall China market entry strategy.
KOL Marketing Challenges:
Sales Results Typically Lag 1-3 Months
Immediate, direct sales from KOL campaigns in China are really only possible for well established and trusted brands. New brands and products need time to establish awareness and trust with consumers.
PARKLU has been conducting independent research with a well known US-based e-commerce data company and Hong Kong-based investment firm to better understand KOL marketing challenges and opportunities. We found that sales for start-ups and new businesses selling in China typically come 1-to-3 months after a spike in awareness generated from a KOL marketing campaign, an increased index ranking, or an increase in brand and product search activity.
Many customers might be interested in a product but are not in buying mode when first exposed to it. Consumers usually need to see a product numerous times before they will take action, and Chinese consumers are no exceptions. They tend to shop around and do research prior to purchasing the item from their preferred retailer, meaning that a campaign with a WeChat KOL might end up with an increase in sales on an entirely unrelated platform such as Tmall. This means tracking and calculating the total impact of a KOL campaign is difficult.
In general, a good KOL campaign for a new brand will drive 1-2% total clicks to your website, e-commerce shop or mini program, and 1-2% of those will convert to immediate sales.
KOLs Pull Consumers into the Sales Funnel
While KOLs can drive direct sales for well-known, established brands, they usually excel at generating top-of-the-funnel awareness for new brands. They pull target customers into the sales funnel, which activates the engagement, research, and decision-making stages of the buyer’s journey.
When this first touchpoint is followed up with consistent messaging – for example, with your brand’s own content, other KOLs’ promotions, ads, SEO, and experiential marketing events – you can really start to build a brand that people know and trust.
Startups and brands new to China often have little-to-no organic mentions across social media networks, WeChat Index, or Baidu Index, making it very difficult for KOLs to convert impressions into sales.
We recommend that brands consider investing in SEO and SSO (Social Search Optimisation) to maximise the results of their KOL campaigns. A KOL’s social media post is like an adrenaline shot in the arm, but SEO across the internet, social networks, and e-commerce platforms is critical for long-term marketing that reaches customers when they start looking for answers.
It is important to rank high on social platforms, e-commerce sites, and search engines. After a potential customer hears about your brand from a KOL, they will look to validate it. In addition Baidu searches, Chinese consumers frequently turn to reviews. Therefore, it is essential to build-up positive reviews on e-commerce sites and social commerce platforms like Xiaohongshu.
KOLs Can’t Drive New Followers if Your Social Accounts Are Boring
You cannot count on KOLs to drive new followers to your brands’ social media accounts. The only reason people will follow a new account is if that account presents value. A KOL might talk about your brand and drive their followers to visit your account, but it is your responsibility to provide incentives for them to stick around.
One of the best tactics brands can use to attract new followers is to hire KOLs to create posts for the brand’s account. KOLs have mastered the art of creating interesting, engaging content. And in some cases, having a KOL create content is cheaper than working with a creative agency or hiring in-house staff.
Your China Market Entry Strategy Needs to Be Holistic and Long-Term
If startups and new brands approach KOL marketing with a focus on individual campaign ROI, they may be underwhelmed by the results. Of course, there should be scrutiny, KPIs, and a focus on ROI. However, they must fit together in a much more holistic manner for your China market entry strategy to work properly.
Working with KOLs, creating highly educational or entertaining brand-owned content, and community-building should be core competencies of your organization’s marketing department. Just like content marketing and community-building, brands need to be playing the long-game when it comes to KOL marketing. Results will increase exponentially with time and consistency. Now judo flip those KOL marketing challenges by developing a customer journey that makes people love your brand.