Social media influencers are now a global phenomenon. Although they have been disrupting the norm of marketing communication from day one, the Covid-19 pandemic, shutting down physical stores and offline events while increasing people’s screen-time, has taken the trend to the next level. Influencers have now become pillars of brands’ marketing plans and key players of the new economy.
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This new influencer economy and ecosystem has created new business segments such as paid knowledge, livestreaming tipping and gifting, IP authorisation, professional influencer training, influencer content analysis and specialised supply chain. The new influencer economy forms a novel value chain at its dawn, interconnecting various business sectors while presenting a huge market potential.
China has been the global front-runner for influencer marketing and unsurprisingly, it is now taking the lead in building up the new influencer business ecology.
According to the National Bureau of Statistics of China, the direct market sizes of China’s new influencer economy from 2018 to 2020 were US$38.5 billion, US$96 billion and US$210 billion respectively, doubling each year. It is estimated that by the year 2025, the total market size of this new value chain will reach approximately US$1,035 billion.
The figures might seem astonishing to some, however, it does not come as a surprise once we look closely at China’s current influencer market landscape. According to media data agency TOPKLOUT, in 2020 there are more than 9 million influencers in China with a fan base of over 10,000 followers – this is more than anywhere else in the world and the number keeps climbing. Last year, the average number of daily posts published by these influencers was 37.5 million.
Influencers are also delivering strong sales results. During this year’s online shopping festival 618, eight influencers achieved a gross merchandising value (GMV) of over US$15.4 million individually through the Douyin (Chinese version of TikTok) livestreaming channel alone. The Chinese influencers are creating organic and brand-endorsed content that covers a wide range of sectors from beauty, fashion, food & beverage to education, technology and even finance.
The Chinese government is well aware of this influencer trend and has incorporated the new influencer economy as part of the country’s long-term development plans. In recent years, a series of fiscal and regulatory policies have been introduced by institutions from the state council to local governments to facilitate the continuous growth of this new business ecology.
In June 2020, the China Advertising Association issued the nation’s first code of conduct for livestreaming e-commerce, providing legal guidelines for the industry with a focus on protecting the interests of consumers. A number of regional governments including Shanghai, Guangzhou, Shenzhen and Hangzhou all followed up by setting specific goals for the new influencer sector.
Guangzhou, for example, is aiming to launch over 100 high-quality influencer marketing agencies and bring up 10,000 top-selling livestreaming influencers in the coming few years. Heilongjiang, a Northern province of China, has passed a three-year development plan for the influencer livestreaming sector as part of its economic revival strategies.
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Perhaps the most telltale sign of the government’s strong support for the influencer economy is Chairman Xi Jinping’s visit last year to Jinmei, a small village in Central China. There he set foot in a local e-commerce livestreaming booth where villagers were busy selling local agricultural goods online. Their hero product – a kind of black fungus – was sold out immediately after Xi’s visit.
By TicToc Ventures Team
TicToc Ventures builds fast-growing brands together with China’s most in-demand artists and influencers.
With an integrated solution that include product development, production, brand and e-commerce management, TicToc Ventures enable artists and influencers to engage their fan base in new ways and build long-lasting revenue streams.
TicToc Ventures aims to bring to market a steady stream of collections, marrying design that appeals to local consumer tastes with international production and performance standards.