What WeChat and Taobao teach us about the Asian internet market

The most important difference between Chinese services is deeper integration between social networks, influencers (the term “key opinion leader – KOL ” is used in China), trading platforms and payment services.

Basically, we have recently seen a trend on Instagram and TikTok where users can make online purchases by clicking a link on an influencer’s social network profile. Most likely, the movement in this direction will continue. We have also noticed creators in China, European countries and the US build monetization schemes differently. While the West focuses on integration with brands, in China, influencers earn fortunes on direct sales

WeChat and Taobao

WeChat acts as a messenger and service for online and offline commerce simultaneously. The project appeared in 2011, and by 2018, a billion people had already registered there. Both large online sellers and ordinary merchants in the markets can make a bill through the messenger. In addition, WeChat allows you to link a bank card to the service and then forget about it. Back in 2018, the WeChat wallet became the basic means of payment for 80% of Chinese users.

Started as an online auction marketplace like eBay, Taobao, owned by Alibaba Group, is the most popular online shopping and e-commerce platform in China with total annual transactions of over trillion yuan.

Now, Taobao Live collects 700 million active users every month. The number of views of one stream can reach 250 million.

The main feature of both services is creating a comfortable user environment, which allows monitoring influencers in one place and receiving recommendations about goods and payments for purchases.

https://www.instagram.com/taobao.official/?utm_source=ig_embed&ig_rid=9faf223f-eb46-4668-84e5-8a33b353e5e0

"Are you ready to buy, buy, buy?"

The main influencer marketing star in China is undoubtedly Li Jiaqi. Everyone who speaks about the sales industry through social networks mentions him. In October 2021, Li Jiaqi held a 12-hour stream, where he sold goods worth 10.7 billion yuan — $ 1.7 billion. According to Chinese media resources, the blogger earns $10 to 20 million on streams monthly, and he might reach $15 billion a year in income from sales in China by 2023.

Of course, the “Lipstick King” example, Li Jiaqi’s nickname, shows an incredible success story, which may be impossible to repeat. But it doesn’t mean that someone is not trying to compete with him. On the contrary, real influencer incubators have already been working for a long time in China. You can read a detailed BBC report about it here.

Another important Chinese-market feature is Wanghongs – influencer bloggers who recommend goods during streaming. And this happens to be their main content! By the way, local young people demand this. Influencer product recommendations vastly impact millennials and Gen Z in China.

More time online = more time shopping online

In China, the average internet user spends about five hours or more online, including about two hours on social media every day.

According to ChoZan’s marketing agency research, 79% of Chinese internet users buy goods online. From December 2019 to December 2020, the time Chinese spend in online stores increased by 20%.

This may be a pandemic effect, but many trends emerging from COVID-19 are expected to persist beyond the pandemic’s end. For example, employees who prefer to work remotely will continue to increase in the post-COVID world. Experts expect the same for the online commerce market.

In addition to increasing the hours Chinese internet users spend in online stores, ChoZan agency analysts predict an increase in expenses.

«China’s 400+ million millennials represent a huge and emerging consumer group and largely impact the economy. Most millennials own smartphones that are constantly in use and used in more versatile ways than their counterparts in the West. Millennials enjoy luxury brands. Forecasts expect them to make up 40% of global luxury goods sales by 2024, with around 58% aged 18 to 30. It’s key for brands to understand millennials’ consumer behaviors. »

Numbers support these forecasts. In 2020, the size of influencer marketing in China amounted to $10.5 billion, which means it more than doubled since 2018.

What else can we learn?

Internet penetration in China is just over 60%, and almost 99% of Chinese internet users go online from their mobile phones.

Perhaps while planning integration campaigns with creators, special attention should be paid to the question, how users of a particular region follow bloggers.

If the mobile traffic share is high, perhaps, it makes sense to discuss the issue of adapting content to mobile devices with the blog.

And finally, let’s talk fraud. You can often find news about click farms in China, which help to improve the rates of streams by cheating statistics. Many people create large group chats in WeChat to share blacklists of fraudulent streamers and agencies in China. There are other ways to verify the honesty of the influencer, including comparing the number of stream views and the sales conversion of goods or services that were advertised.

Considering the isolation of the local internet, the successful stories of Chinese influencers are especially impressive. However, this does not affect sales. On the contrary, the development of their services, aimed to integrate bloggers and marketplaces, shows that influencer marketing is a global trend where everyone, little by little, learns from each other.