China - State of Influencers 2023.pdf

China - State of Influencers 2023.pdf

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  THE STATE OF THE INFLUENCERS CHINA2023 The Present and Future: An overview of China’s influencer marketing industry featuring insights from brands, agencies, KOLs, KOCs and more
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  Foreword Influencer marketing haslong been a crucial tool for product promotion and facilitating sales conversions, so brands are increasingly focusing on KOLCs to promote their products on social media. At the same time, we are seeing a trend of convergence and integration among social media platforms in China, combined with a decentralisation of e-commerce platforms as social commerce gradually solidifies its presence in the marketplace. There are several key factors that are important for brands engaging in influencer marketing in China. These include selecting the right influencers to partner with, developing effective and engaging content and using data and analytics to track and optimise campaign performance. Additionally, it is important for brands to be aware of and comply with industry regulations and guidelines, and to have a thorough understanding of the cultural and social context in which they are operating. As costs continue to rise, it is more important than ever that brands find reliable, transparent ways to measure the impact of their influencer marketing investments. In particular, it is vital that brand marketing teams have a trusted platform at their disposal that enables them to visualise in real-time which strategies are working and which need modification to maximise return on investment (ROI). . Furthermore, informed, data-driven allocation of influencer marketing budgets is crucial to maintaining cost effective operations and effective brand building operations in China’s vast market. As platforms develop and debut new proprietary promotion mechanisms, conversion models and content formats, brands are also trying to expand beyond current marketing patterns and reach new audiences by partnering with cross-industry and multi-category influencers. 2022 has been a challenging year for brands. In this complex and changing environment marked by anaemic economic cycles, fragmented consumer attention, increasing industry regulation and tighter budgets, how can brands maximise the impact of their KOL marketing campaigns at scale? In this comprehensive report, we present the results of surveys conducted with 951 influencers across the KOL and KOC tiers, and 103 brands and agencies. These surveys were conducted from 19 October to 21 November 2022. Respondents were asked to evaluate changes in their influencer marketing practices from October 2021 to September 2022. All respondents were based in mainland China. This report highlights key findings from the surveys, and some statistics may be presented across multiple pages and include multiple-choice responses, which may not add up to 100% in all cases. The State of the Influencers - China 2023 PJDAREN INSIGHTS
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  04 Introduction The Stateof the Influencers - China 2023 06 Insights From Brands 17 Insights From Agencies 23 Insights From Influencers 28 Market Observations & Best Practices 42 Key Takeaways 3 PJDAREN INSIGHTS Pain points, strategies and reflections from brands managing China influencer campaigns The year in influencer marketing from the agency perspective A view of China’s influencer marketing industry from the influencers themselves Creating measurable, impactful KOL and KOC campaigns with proven solutions from PJdaren
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  China’s influencer marketingindustry is well ahead of the rest of the world. The advanced functionality and integration of social media, e-commerce and mobile payments has enabled the Chinese KOL and KOC economy to grow at a pace not seen anywhere else in the world. This growth has been accelerated by the Covid-19 pandemic and the consequent prevention measures that included closing physical stores, dining in, in-person events and sporadic district lockdowns. These measures have led to a significant increase in the amount of time Chinese consumers spend on the internet. In fact, the average Chinese consumer today spends over seven hours a day on the internet . About two-thirds of those seven hours is spent using social or content apps, as users increasingly seek information about the world around them through social media, influencers and friends to help make purchase decisions. PJdaren’s preliminary estimates suggest that from September 2021 to October 2022 there were more than 10.1 million KOLs and KOCs across China’s social media ecosystem with a fan base of over 10,000 followers – a figure larger than anything seen elsewhere in the world. China’s influencers published an average of 38.3 million posts on a daily basis. 4 PJDAREN INSIGHTS CHINA’S INFLUENCER MARKETING INDUSTRY Introduction According to the National Bureau of Statistics, China’s influencer economy grew from CN¥241.9 billion (US$ 38.5 billion) in 2018 to CN¥1.3 trillion (US$210 billion) in 2020. It is estimated that by the year 2025, the total market size of China’s influencer economy will reach CN¥6.7 trillion (US$1.035 trillion). 786 2419 6188 13572 19944 28598 39593 52144 67567 2017 2018 2019 2020 2021E 2022E 2023E 2024E 2025E 0 10000 20000 30000 40000 50000 60000 70000 80000 ¥100 million Chart: The Market Size of China’s New Influencer Economy The market size of China’s new influencer economy (Current USD to RMB conversion rate: US$1 = CN¥6.95) Source: China National Bureau of Statistics The State of the Influencers - China 2023 1 1. McKinsey & Company [China consumer report 2021]
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  China Influencer IndustryEcosystem - Advertising product promotion - product seeding - IP co-branding ROI Conversion Increase the impact User Segmentation Combined with cross-platform content co-construction to strengthen product seeding capabilities Generate Content MCN Service Support Influencers (KOLCs) Content distribution and e-commerce channels Advertisers And Advertising Agencies Users represents platforms with proprietary, in-house e-commerce ecosystems Tools & Technical Support Marketing Services Data Monitoring Marketing tools provided by the platform OEM factory / Warehouse & Logistics Empowering support for content production, distribution, and commercialisation Generate trust & traffic retention Algorithm recommendation Content Distribution Multi-resource integration support Resource Matching and Service Guarantee Traffic Purchase Encourage the output of more content to attract users Content Delivery More diversified marketing methods A robust and dynamic ecosystem supporting brand growth, social commerce, creative content, IP development and innovation. 5 PJDAREN INSIGHTS The State of the Influencers - China 2023
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  PJDAREN INSIGHTS Insights from Brands TheState of the Influencers - in China 2023
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  ABOUT THE SURVEY RespondentDemographics: Brands & Agencies In order to gain a deeper understanding of the influencer marekting landscape in China, we sought expertise from 103 Brands and Agencies, including local emerging brands, foreign organisations operating in China via cross-border commerce, mature enterprises, as well as local and foreing marketing agencies. DATA ORGANISATION TYPE Brands Agencies BRAND OWNERSHIP Independent Corporate RESPONDENTS (BRANDS) Executive Mid-level manager RESPONDENTS (AGENCIES) Associate Executive Mid-level manager Associate 69% 31% 72% 28% 18% 49% 34% 24% 39% 36% MOST REPRESENTED VERTICALS Beauty & Skincare 31% Fashion 7% Fragrance 9% Personal Care 15% Food & Beverage 12% Mom & baby 8% Lifestyle 9% Fitness & Wellness 8% 7 PJDAREN INSIGHTS The State of the Influencers - China 2023 Insights from Brands
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  Despite challenging macroeconomicconditions and the constrictive effects of China’s zero Covid policy, influencer marketing remains the core marketing investment for most brands in China. 58% of brands surveyed claimed to spend more on influencer marketing from October 2021 to September 2022 than they did during the same period the previous year. Brand investments in influencer (KOL and KOC) marketing continue to rise. INFLUENCER MARKETING INVESTMENTS 22% CN¥500k - 1M (US$70k - 140k) 43% CN¥1.1M - 3M (US$150k - 420k) 35% CN¥3M+ (US$420k+) of brands reported that the headcount of influencer marketing teams at their organisations grew. In addition, of brands reported having more than 5 dedicated team members for executing influencer marketing campaigns. Dedicated Influencer Marketing Team (Headcount) 3-5 members 26% 6-9 members Over 9 members 34% 18% 8 PJDAREN INSIGHTS The State of the Influencers - China 2023 Insights from Brands
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  While the influencereconomy continues to expand, brands in China still struggle to measure the overall impact of their influencer marketing investments. In addition, the surveyed brands indicated that it is becoming increasingly difficult to discover new KOLs and KOCs that match their brand DNA. Most brands recognise the importance of measuring and reporting the long-term impact of their influencer marketing programmes, with 53% of respondents stating that measuring and reporting the impact of their Influencer marketing program as the most important aspect. Despite this, measurement is often complicated, with some brands reporting that they find it very challenging. Platforms may also obfuscate assessments, with each using a non-standard, non-universal metric to provide data. Measuring influencer marketing impact and recruiting new influencers are the top two priorities for brands in China Influencer Marketing Priorities Influencer recruitment 57% Seleced as primary or secondary priority Measuring and reporting 61% Seleced as primary or secondary priority Minimise brand risk & fraud 46% Seleced as primary or secondary priority More effective influencer marketing strategy 31% Seleced as primary or secondary priority MOST USEFUL PERFORMANCE METRIC Engagement Rate Seleced as most or second most useful 31% Reach Seleced as most or second most useful 28% Conversions Seleced as most or second most useful 46% CPE (Cost Per Engagement) Seleced as most or second most useful 39% 9 PJDAREN INSIGHTS The State of the Influencers - China 2023 Insights from Brands
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  Brands in Chinafound that scaling their influencer marketing programme was their primary challenge. ● 37% Of brands used 1-3 influencer marketing platfoms or tools. ● 69% outsourced the execution of their influencer marketing program (Fully or Partially). ● 47% of brands would like to receive more detailed report about the performnce of their influencer marketing campaigns. moderation as well as managing brand relationships with influencers are other major roadblocks they face. More specifically, most brands found content moderation to be resource consuming and most challenging when requesting content modifications from KOLs. While brands leverage influencer marketing greatly, most brands indicated that lack of knowledge, processes or budget continues to hinder the scope and reach of their influencer marketing initiatives. Additionally, 45% of brands responded that content . MOST CHALLENGING ASPECTS OF INFLUENCER MARKETING Selected as primary or secondary priority Influencer Relationship Management Scalability Content Moderation Rising Costs PLATFORMS AND TOOLS USAGE 10 PJDAREN INSIGHTS The State of the Influencers - China 2023 Insights from Brands
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  Despite, limited budgetbeing one of the major roadblocks for most brands, the most common form of influencer activations was sponsored posts. Brands also incorporated product seeding/ gifting to creators into their strategy. For most brands sponsored post was also the most effective Influencer marketing strategy during 2022, as it provided more flexibility and control over the quality and direction of the content generated by KOLs and KOCs. Sponsored posts are the most popular and effective forms of KOL and KOC activations MOST POPULAR INFLUENCER MARKETING ACTIVATION Seleced as primary or secondary form of activation MOST EFFECTIVE INFLUENCER MARKETING STRATEGIES Sponsored Influencer Activations Product Seeding/ Gifting Product Giveaways 81% 46% 35% Sponsored Influencer Activations 54% Product Seeding / Gifting 21% Product Giveaways 17% PJDAREN INSIGHTS The State of the Influencers - China 2023 Insights from Brands 11
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  When it comesto branding and awareness, Xiaohongshu delivers the best results. 59% of brands selected Xiaohongshu as the platforms on which they have seen greater impact in terms of brand building. Meanwhile, 37% of brands selected weibo as the second best platform for branding activities. MOST EFFECTIVE PLATFORM FOR BRANDING PURPOSES VIA INFLUENCER MARKETING Douyin Kuaishou Xiaohongshu Weibo WeChat 29% 21% 59% 37% 26% MOST EFFECTIVE PLATFORM FOR SOCIAL COMMERCE Douyin Kuaishou Xiaohongshu Weibo WeChat 35% 26% 42% 18% 15% In terms of social commerce, Xiaohongshu remains at the top of the list for most brands, in particular smaller, emerging brands with limited budgets. Xiaohongshu offers brands an unique blend of product discovery, post-purchase experience sharing and social shopping coupled with affordable influencers, this combination makes Xiaohongshu a premier source of traffic to other e-commerce platforms and a must have for many brands. With its rapidly evolving e-commerce ecosystem and enormous user’s base, Douyin comes in second place. The increasing cost of Douyin campaigns has proven to be an entry barrier for many brands; however, its ROI remains feasible and appealing to more mature brands with the necessary budget. PJDAREN INSIGHTS The State of the Influencers - China 2023 Insights from Brands 12
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  How Do YouPlan To Adjust Total Influencer Investments by Channel in 2023? Xiaohongshu, Douyin and Kuaishou lead the way for potential new influencer campaigns by brands in 2023. As China’s e-commerce continues to decentralise, brands are now more confident to explore less traditional platforms. On the other hand, mature platforms like Tmall Live, Weibo and WeChat are expected to face a challenging 2023. Suprisingly, 51% of the surveyed brands plan to increase their investment in Zhihu, making this a platform to watch closely in 2023. Xiaohongshu Increase Decrease Douyin 69% 31% 63% 37% Kuaishou Bilibili 52% 48% 47% 53% Tmall Live Weibo 39% 61% 41% 59% WeChat Zhihu 46% 54% 51% 49% PJDAREN INSIGHTS The State of the Influencers - China 2023 Insights from Brands 13
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  Brands are relyingon KOCs more than ever before. Attracted by their relatabilty, affordabilty and performance, most brands increased the proportion of influencer marketing programs featuring KOCs in 2022. The Role of KOCs Q: How has your percentage of campaigns leveraging KOCs (5k-50k followers) and Micro KOLs (50k-200k followers) changed? Significantly Increased (28%) Q: How has your percentage of campaigns leveraging mid-tier KOLs (200k-500k followers) changed? Q: How has your percentage of campaigns leveraging top-tier KOLs (500k-1M followers) changed? Somewhat Increased (42%) No change (18%) Somewhat Decreased (5%) Significantly Decreased (7%) Significantly Increased (19%) Somewhat Increased (26%) No change (35%) Somewhat Decreased (11%) Significantly Decreased (9%) Significantly Increased (9%) Somewhat Increased (15%) No change (24%) Somewhat Decreased (30%) Significantly Decreased (22%) PJDAREN INSIGHTS The State of the Influencers - China 2023 Insights from Brands 14
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  While most brandsleverage past collaborations with KOLs for new activations, 94% of brands responded that they actively seek to work with new KOLs. When it comes to KOCs, 71% of surveyed brands responded that they integrate new KOCs with each campaign. When selecting influencers to work with, most brands indicated a heavy reliance on brand affinity and audience engagement rates to assess influencer compatibility. Brands rely on Brand Affinity and Engagement Rates to determine which influencers to work with. MOST POPULAR INFLUENCER DISCOVERY TACTICS MOST IMPORTANT CONSIDERATIONS WHEN SELECTING AN INFLUENCER Audience Engagement Brand Affinity Aesthetic aligment with your brand Cost AGENCIES RECOMMENDATION MCN RECOMMENDATION MANUAL DISCOVERY PLATFORM OR SOFTWARE 57% 38% 55% 41% PJDAREN INSIGHTS The State of the Influencers - China 2023 Insights from Brands 15
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  Of the surveyedbrands, 78% claimed to have paid for over eighty-five percent (85%) of their KOL and KOC collaborations in 2022. Fifty-two per-cent of brands paid higher fees for influencer activations this year than last. Additionally, 71% of brands reported that the majority of their influencer marketing budgets went towards paying KOL and platform fees. Brands struggle to keep up with rising costs AVERAGE COST FOR A SINGLE XIAOHONGSHU POST Over 1M Followers 500k - 1M Followers 300k - 500k Followers 100k - 300k Followers Under 100k Followers CN¥125k (US$17k) - CN¥380k (US$53k) CN¥60k (US$8.5k) - CN¥190k (US$26k) CN¥35k (US$4.5k) - CN¥120k (US$17k) CN¥15k (US$2k) - CN¥35k (US$4.5k) CN¥3500 (US$500) - CN¥15k (US$2.5k) BRANDS PAID FOR A SINGLE DOUYIN POST Over 10M Followers 5M - 10M Followers 1M - 5M Followers 500k - 1M Followers 100k - 500k Followers Under 100k Followers CN¥360k (US$50k) - CN¥800k (US$110k) CN¥200k (US$28k) - CN¥700k (US$97k) CN¥140k (US$20k) - CN¥650k (US$90k) CN¥100k (US$13.5k) - CN¥450k (US$62.5k) CN¥25k (US$3.5k) - CN¥280k (US$39k) CN¥4500 (US$625) - CN¥20k (US$2.7k) PJDAREN INSIGHTS The State of the Influencers - China 2023 Insights from Brands 16
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  Insights from Agencies The Stateof the Influencers - in China 2023
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  Agency Demographics Agencies playa central role in China's influencer marketing industry. KOL and KOC marketing trends for agencies are complementary to trends among brands, who comprise the majority of these agencies' clients. However, there are distinctive aspects on the perspectives and priorities of agencies towards influencer marketing in China. Agencies mostly serve brand clients 91% of agencies serve a clientele of which >75% are brands 64% have 0 creator (celebrity) clients 8% have < 25% creator (celebrity) clients Number of verticals represented 82% of agencies represent 4 verticals or more 61% of agencies receive >25% of total revenue from influencer marketing PJDAREN INSIGHTS The State of the Influencers - China 2023 Insights from Agencies 18
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  When evaluating agencyperceptions towards working with KOLs and KOCs, 58% of agencies found managing relation with KOLs to be somewhat or very challenging, whereas 63% of agencies considered "time spent" to be a major drawback when implementing influencer marketing campaigns with KOCs. In terms of influencer marketing, streamlining workflow remained a primary priority for most agencies. of agencies found streamlining workflow when implementing influencer marketing campaigns to be somewhat or very challenging. Additionally, agencies also struggled to build robust influencer campaigns due to limited budgets. Other Key Challenges Limited budgets Difficulty finding new influencers 73% 61% PJDAREN INSIGHTS The State of the Influencers - China 2023 Insights from Agencies 19
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  Targeted product seeding/giftingranked as the second-most common form of influencer outreach whereas product giveaways through brand-owned media ranked as the second-most effective strategy for agencies. Only 58% of brands considered affiliate collaborations to be an effective activation strategy. INSIGHTS As was the case for brands, Sponsored posts were the most common and effective form of influencer activations for agencies. MOST POPULAR INFLUENCER MARKETING ACTIVATIONS Selected as Top 1 or Top 2 MOST EFFECTIVE INFLUENCER MARKETING STRATEGIES Selected as Top 1 or Top 2 Sponsored Posts Targeted Product Seeding/ Gifting Content Collaboration 94% 72% 58% Sponsored Posts 76% Product Giveaways Targeted Product Seeding/Gifting 49% of agencies considered incorporating UGC on brand-owned media as an effective strategy. 52% 39% The State of the Influencers - China 2023 Insights from Agencies 20
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  Unlike brands, mostagencies guide their influencer discovery process primarily by the aesthetic aligment between the influencers and the brand. Futhermore, agencies also tend to prioritise influencers with greater audience engagement rates. For agencies, Aesthetic Aligment is the core criteria when identifying KOLs and KOCs to partner with. PJDAREN INSIGHTS of agencies indicated to have paid higher fees to KOLs and KOCS in 2022 than in 2021. In addition, of agencies incorporated more KOCs in their influencer marketing campaigns in 2022 than the previous year. HOW HAS THE PERCENTAGE OF INFLUENCER CAMPAIGNS LEVERAGING KOCS CHANGED? HOW HAS THE PERCENTAGE OF AGENCY CAMPAIGNS LEVERAGING MEGA KOLS (1M+) CHANGED? Significantly increased (36%) Slightly increased (55%) Remained constant (9%) Significantly increased (12%) Remained constant (27%) Slightly decreased (33%) Significantly decreased (28%) The State of the Influencers - China 2023 Insights from Agencies 21
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  PJDAREN INSIGHTS Insights from Influencers TheState of the Influencers - China 2023
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  ABOUT THE SURVEY DATA AGEDISTRIBUTION Over 1M Followers GENDER DISTRIBUTION CITY TIER DISTRIBUTION T1 31% T2 41% T3 18% T4 & below 10% PJDAREN INSIGHTS RESPONDENTS FOLLOWERS COUNT (MAIN ACCOUNT): 32% MALE 68% FEMALE 17-24 25-34 35-45 Over 45 29% 47% 16% 8% 500k - 1M Followers 300k - 500k Followers 100k - 300k Followers 50k - 100k Followers 10k - 50k Followers Fewer than 10k Followers 3% 8% 16% 11% 23% 15% 24% Influencer Demographics: The view of KOLs and KOCs towards the state of their industry is fundamental for any attempt to understand where the influencer industry stand at present and where it will go in the near future. With influencer posts outperforming traditional and even digital advertising, we surveyed 951 KOLs and KOCs from our network and compiled the following findings. The State of the Influencers - China 2023 Insights from Influencers 23
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  The majority of influencersworked independently Work alone (54%) Most influencers pursued content creation on a part-time basis Work with a team 2 + part-time freelancers (15%) Work with a team 2 + full-time employees (10%) I work for an MCN (21%) Part-time influencer (64%) Full-time influencer (36%) PJDAREN INSIGHTS MOST POPULAR VERTICALS Skincare & Cosmetics 27% Fashion 25% Food & Beverage 16% Mom & Baby 11% Lifestyle 22% Fitness & Wellness 16% Makeup 20% Daily Necessities 9% Pets 14% Travelling - Glamping 10% Others 19% The State of the Influencers - China 2023 Insights from Influencers 24
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  Despite the recentregulations and strict content surveillance implemented by Xiaohongshu over the last couple of years, it has remained the main destination for most influencers. However, over half of those KOLs and KOCs regularly posting in Xiaohongshu indicated that they also share/create content in Douyin and Weibo. The vast majority of influencers regularly create content on Xiaohongshu PJDAREN INSIGHTS Influencers mostly posted on… Xiaohongshu (91%) Kuaishou (43%) Douyin (68%) Bilibili (23%) Weibo (64%) Tmall Live (12%) WeChat (29%) Zhihu (20%) Primary Platform for KOLs and KOCs While Xiaohongshu stood as the most popular platform amongst influencers, Douyin, Kuaishou and BiliBili were selected as the most profitable platforms, with 32%, 21% and 18% of influencers selecting them as most lucrative, respectively. 67% of influencers selected Xiaohongshu as their primary platform 43% used Xiaohongshu more frequently than the previous year 22% of influencers selected Douyin as their primary platform 56% used Douyin more frequently than the previous year The State of the Influencers - China 2023 Insights from Influencers 25
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  PJDAREN INSIGHTS Brand PopularityDetermines Whether Influencers Will Work With Brands – But Compensation is Also a Key Driver When deciding which brands to work with, influencers prioritise both brand popularity and compensation. However, another important determining factor of whether an influencer will work with a brand is the popularity of the brand, either in China or abroad. For most influencers, the popularity of a brand is defined by the number of posts the brand accumulated across major social platforms along with the sentiment and number of reviews a brand has in its flagship store(s). Posting about a brand on their social media profiles not only reflects on the brand itself, but also on the influencer's stature and personal style. Most important factors when considering whether to work with a brand Biggest Contributors to Satisfaction When Working with a Brand Top Reasons KOLs and KOCs Stop Collaborating with a Brand 96% Poor or no compensation from the brand 71% Brand has been in the middle of a recent scandal 56% The reputation of the product is poor Compensation Product Quality Brand Region of Origin Guochao 68% Brand Popularity 55% 34% 16% 11% Compensation 71% Clarity of the Brief 53% Content and Creative Flexibility Brand Reputation 64% 42% 15% Growth Opportunity The State of the Influencers - China 2023 Insights from Influencers 26
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  PJDAREN INSIGHTS While receivinga fair compensation for their content is very important for most influencers, a proportion of our respondents indicated willingness to post unpaid content under certain circumstances. The most common reasons given for posting unpaid content included brand authority and product price. INFLUENCER COMPENSATION BRAND AUTHORITY INSPIRES KOLs & KOCs TO POST UNPAID (ORGANIC) CONTENT 57% posted organic content about well-known brands, specially luxury brands. 16% posted organic content about “expensive” products SPONSORED POSTS 41% of influencers reported that paid content accounts for > 25% of their total output 33% of influencers reported that paid content accounts for > 50% of their total output GREATEST AMOUNT OF COMPENSATION FOR A SINGLE POST UNDER CN¥3k (US$415) CN¥3k (US$415) – CN¥15k (US$2k) CN¥15k (US$2k) – CN¥60k (US$8.3k) CN¥60k (US$8.3k) – CN¥300k (US$42k) CN¥300k (US$42k) – CN¥700k (US$100k) 24% 51% 22% 2% 1% The State of the Influencers - China 2023 Insights from Influencers 27
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  Market Observations & BestPractices The State of the Influencers - in China 2023
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  Weak economic growthand lockdowns in 2022 has shifted most consumer activity online Growth of advertising spending relative to the service sector is expected to slow down from 19.1% in 2021 to 3.2% in 2022 due to the impact of the zero-Covid policy, frequent lockdowns and other restrictions, which have severely impacted economic rehabilitation. The epidemic has accelerated consumers' shifting from offline consumption and entertainment to online, but their attention is more dispersed. Consumption perceptions and expectations have become more restrained, with consumers being more likely to seek out content out of their own interests, while having higher expectations towards the quality of content. Furthermore, social commerce is growing rapidly, leading to a new trend of decentralisation among China’s e-commerce platforms. This year’s Double Eleven shopping festival serves as a prime example of this, with social commerce platforms showing an 146.1% increase over last year, accounting for CN¥181 billion of the total GMV for Double Eleven 2022, compared to CN¥73.76 billion for the same period in 2021. This demonstrates the importance and efficacy of social commerce and KOC marketing. Chinese consumers are making more mature and rational consumption choices, most clearly seen in their increasing demand for product quality. Consumers tend to make purchase decisions after a thorough review of product evaluations on social media, carefully assessing the experience and value that the product or service provides, as well as how the product will improve their quality of life. Consumers no longer gain product information through e-commerce pages, instead seeking live-streams, videos and overviews from influencers. Unlike traditional e-commerce, social commerce is centred about professional, interesting and authentic content, transforming passive browsing into active consumption. The State of the Influencers - China 2023 PJDAREN INSIGHTS Market Observations 29
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  2022 brought abouta new wave of influencers, with brands shifting their focus towards KOCs, Micro and Mid-tier KOLs. Observing industry trends, we can see that brand investments in China influencer marketing tend to be more refined and efficient than before, with brands primarily concerned with maximising the efficacy of influencer communications and accurately measuring the impact of influencer marketing campaigns. Furthermore, in an effort to de-risk and optimise their influencer marketing investments, brands and agencies are shifting their focus away from celebrities and top-tier KOLs to authentic, high quality mid-tier KOLs and KOCs. In response to this trend, platforms are strengthening their content management capabilities and are providing more resources to emerging KOLs and KOCs in a move to meet the increasing demand for high quality and diverse content. MARKET OBSERVATION 1 PJDAREN INSIGHTS The State of the Influencers - China 2023 Market Observations 30
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  Influencer Marketing: DrivingTrust, Loyalty and Conversion for Brands KOL and KOC marketing function as a crucial link for brand activations, driving impact on both exposure and conversion. On the exposure side, KOL and KOC marketing help to generate brand awareness and brand authority, while also driving traffic and conversions, boosting sales volume. Activation Exposure Conversion KEY FUNCTION MARKETING TACTIC PRIMARY GOALS Display advertising feed KOL & KOC Marketing Livestream e-commerce/ off-line store Raise awareness - Drive interest - Generate Social engagement - Product comparison Branding, Entertainment & Conversion MARKET OBSERVATION 2 PJDAREN INSIGHTS The State of the Influencers - China 2023 Market Observations 31
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  From the consumerspoint of view, influencer marketing functions as a medium for sparking interest and building trust The Importance of Influencer Marketing in the Eight Communication Types by Key Categories Communication Roles: Forming perceptions - Deepening connections - Expanding understanding - Driving interest - Fostering loyalty - Generating social engagement - Comparing prices and selecting the most reasonable - Building trust 50 100 150 200 250 Beauty Category Luxury Category 3C Category Building Trust Driving Interest Index Average: 112 -other roles- Note: This is an indexed ranking of the importance of various media roles of consumers who learn about information through KOLs/KOCs/Celebrities/Expert recommendations Fostering Loyalty Building Trust Driving Interest 140 197 Building Trust 227 205 140 124 Driving Interest 121 -other roles- -other roles- MARKET OBSERVATION 3 PJDAREN INSIGHTS The State of the Influencers - China 2023 Market Observations 32
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  Different industries havetheir respective preferences and goals when developing influencer marketing campaigns Industry Primary Marketing Goals Common Activations Automobile, Luxury, Parenting Beauty & Personal care, , F&B, 3C, Home Appliances Games, apps, finance Strengthening brand Image on consumer‘s top-of-mind Build trust, drive awareness, increase SOV, generate sales conversion Generate conversion New products launch Regular content seeding, new products launch, sales events, offline events promotion Product promotion MARKET OBSERVATION 4 MARKET OBSERVATION 5 Different influencer tiers serve different functions PJDAREN INSIGHTS Mega and top-tier KOLs are more suitable for enhancing exposure, top- and mid-tier KOLs are more suitable for short-term sales conversion, while micro KOLs and KOCs are ideal for building cross-platfom awareness, tapping into new consumer groups (“breaking the circle”) and building sustainable brand growth. *The size of the circle represents the efficiency of different influencer tiers per function; it does not represent a specific value Drive brand authority, specialised in a few categories, drive uni-platform presence Generate social engagements, specialised in no more than two categories, contribute to share of voice (SOV). Reach new consumer groups, cross-platform seeding. Word-of-mouth at scale, increase multi-platform SOV and market penetration. Branding Conversion Exposure Conversion Tier Features T1 Mega T2 Top-tier T3 Mid-tier T4 Micro T5 KOC Quick viral effect, wide range of categories, short-term exposure Market Cross-Platform Presence - Trust & Market Penetration The State of the Influencers - China 2023 Market Observations 33
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  Each Influencer Tieris More Effiicient at a Different Range of Functions Across Different Platforms… MARKET PENETRATION (SOV) Weibo Xiaohongshu Douyin WeChat *The size of the circle only represents the ranking of the engagement/conversion efficiency of the platform, and does not represent a specific value Successful brand campaigns everaging the effectiveness of different influencer tiers in terms of branding, market development and conversion, all of which are critical in order to achieve a given campaign goal. MARKET OBSERVATION 6 CONVERSION Weibo Xiaohongshu Douyin WeChat T1 Mega KOL T2 Top KOL T3 Middle KOL T4 Micro KOL T5 KOC T1 Mega KOL T2 Top KOL T3 Middle KOL T4 Micro KOL T5 KOC PJDAREN INSIGHTS Influencer Efficiency by Function & Platform The State of the Influencers - China 2023 BRANDING Weibo Xiaohongshu Douyin WeChat T1 Mega KOL T2 Top KOL T3 Middle KOL T4 Micro KOL T5 KOC Market Observations 34
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  Implement a systematic influencerevaluation approach Every year, global brands spend hundreds of millions on word-of-mouth marketing and content seeding campaigns. Similarly, mid-size and emerging brands also utilise influencer strategies to connect with target consumers, investing tens of millions on average. According to the "2022 China Marketing & Media Review" by TOTEM Media, 75% of advertisers planned to increase or maintain their influencer marketing investments in 2022. However, for most brands, it remains a challenge to accurately assess the value that their influencer marketing investments add to their overall brand and business growth. PJDAREN INSIGHTS The State of the Influencers - China 2023 Best Practices 35
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  Our approach revolvesaround a multi-dimensional social ROI attribution framework for KOL and KOC selection. To help brands visualise campaign and brand performance, our platform focuses on providing a holistic understanding of any given influencer marketing program at both the micro and macro levels. It identifies the best-performing angles, influencer subgroups and levels, among other things. Additionally, it measures the value derived from influencer campaigns through the lens of paid social media costs. PJDAREN INSIGHTS The State of the Influencers - China 2023 Best Practices Media Performance Value™ (MPV®) is PJdaren’s proprietary metric that represents the monetary value of the performance of Word-of-Mouth (WOM) campaigns based on native advertising cost per social platform. MPV® eliminates biases towards social accounts with larger followings and focuses on the popularity and resonance of every social media post. This universal metric is aligned with the standard algorithms employed by social media in China which are designed to drive greater exposure (user traffic) to content that scores greater engagements. By taking into account the hierarchy of social media interactions, MPV® empowers brands to evaluate the returns on all influencer marketing investments with transparency. To help brands address the current challenges related to recruiting, selecting, and measuring the performance of KOLs and KOCs, PJdaren has been committed to developing a set of instructive metrics and tools to evaluate the overall impact of influencer marketing investments and to optimise the influencer selection process. 36
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  The optimal influencermatrix takes into account the communication, resonance and seeding power of each subject Brand collaboration outreach Collaboration performance (exposure, engagements and seeding) Communication Indicators The Matrix of Influencer Evaluations Communication Power Product Seeding Power Resonance Power Follower Indicators Content Indicators Business Indicators Resonance Indicators Reads/views Engagements: shares, comments and likes Follower Volume / follower Growth Rate Follower Demographics Follower Activity Follower Affinity Number of posts User sentiment, comment keywords (positive or negative) Most liked comments, relevance of comments PJDAREN INSIGHTS % of hot posts % reach (reads/views) /followers The State of the Influencers - China 2023 Best Practices 37
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  Content Segmentation As the socialmedia ecosystem becomes more fragmented and consumer attention more dispersed, content segmentation is becoming a must for brands. To maximise the performance of influencer marketing, content created by KOLs and KOCs needs to be vertically segmented. Through content segmentation, brands can optimise their influencer pool and increase resonance among targeted consumer groups. Influencer Pre-investment Planning Content Segmentation Strategy ● Dry skin ● Oily skin ● Combination skin ● Sensitive skin ... ● Salicylic acid ● Niacinamide ● Astaxanthin ● Hexapeptide ● Arbutin ... ● Work ● School ● Dating ● Travelling ● Meeting with parents ● ... ● Chinese makeup style ● Western makeup style ● Japanese makeup style ● Cover makeup ● “Rich girl style” ● ... ● Beginner tutorials ● New produt unboxings ● Multiple product collections ● Multiple product usage ● Product recommendations ● ... Budget Goal KPI An Example of Content Segmentation in the Beauty and Skincare Sector: By skin type By ingredient By scenario By style By content type PJDAREN INSIGHTS The State of the Influencers - China 2023 Best Practices Optimal Output = 38
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  Different platforms havedistinctive focuses, user characteristics, content format and commercialisation support. Therefore, comprehensive consideration is needed when defining influencer marketing goals and building an influencer pool. DOUYIN — The centre stage for all people User Volume: 700 million+ MAU User characteristics: Key Industries: Gaming, F&B, Sports, Fashion WHAT’S NEW Jointly launched "Middle Video Partner Program" with Watermelon Video and Today's Headline; “Douyin and Sohu reached cooperation on second creation copyright” ● More male users ● Younger users ● More users in lower-tier cities KUAISHOU — The hinterland of the "he economy" User Volume: 500 million+ MAU User characteristics: Key Industries: F&B, Daily Necesities WHAT’S NEW Kuaishou's influencer marketing platform launched the Star Ocean Plan, giving bonus traffic to select creators and agencies ● More male users ● Younger users ● Most users in lower tier cities PJDAREN INSIGHTS The State of the Influencers - China 2023 Best Practices XIAOHONGSHU — The meeting spot for urban females User Volume: 200 million+ MAU User characteristics: Key Industries: Beauty, Fashion, Lifestyle, Parenting, Personal Care WHAT’S NEW Launched the Dandelion Platform (a business service platform for high-quality creators), released the Community Business Convention to guide merchants through regulating transactions and marketing. ● Significant "her" attributes ● Young users account for a significant proportion ● Most users are located in upper-tier cities 39
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  BILIBILI — Thelong-form video community for young people User Volume: 200 million+ MAU User characteristics: Key Insustries: 3C, Lifestyle, Gaming & Anime. WHAT’S NEW Launched one-stop advertising management platform Sanlian Promotion; launched a new content creator support project ● More male users ● The highest percentage of young users ● Most users in upper tier cities ZHIHU — The largest Q&A platform User Volume: 80 million+ MAU User characteristics: Industry characteristics: Professional services, Parenting, 3C. WHAT’S NEW Launched the “Product Recommendation" component to help draw traffic to Jingdong e-commerce; launched "Zhihu Livestream" to build a livestream platform featuring knowledge and Q&A WECHAT VIDEO CHANNELS — The video arm of the super app User Volume: 400 million+ DAU User characteristics: Key Industries: Automobiles, Education WHAT’S NEW Launched the "Creators Incentive Programme" to boost traffic to original content ● More male users ● More users in lower tier cities ● More male users ● More mature users PJDAREN INSIGHTS The State of the Influencers - China 2023 Best Practices WEIBO — The national social platform User Volume: 500 million+ MAU User characteristics: Key Industries: Beauty, F&B and Daily Necesities WHAT’S NEW Recently launched the "Gradually to the Future" programme to motivate business partners and improve Weibo's overall ecosystem ● More female users ● Younger users ● Most users in upper tier cities 40
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  TOP- & MID-TIERKOLs —— 10% ~ 20% Focus on maximising reach and establishing brand authority to Successful Brand Marketing Influencer Strategies PRODUCT Exposure and Awareness Key Target Low CPM & CPE PJDAREN INSIGHTS The State of the Influencers - China 2023 Best Practices A QUICK GUIDE Recommended KOL and KOC Combination: MICRO KOLs —— 15% ~ 25% Focus on product awareness and USP dissemination. KOCs —— 75% ~ 55% Focus on authentic word-of-mouth, market penetration, enheasing consumers’ interest and purchase intent. EFFECT Activation and Seeding Key Target SEM & SEO - Long-term search ranking optimisation. Recommended KOL and KOC Combination: MID-TIER & MICRO KOLs —— 30% ~ 50% Focus on targeting different segments of the addressable market. KOCs —— 50% ~ 70% Focus on deepening seeding on sub-segments of target consumers while ensuring sustainable ROI. TOP-TIER KOLs —— 10% ~ 25% Focus on building momentum during warm-up periods, drive traffic to e-commerce for pre-payment and boosting search ranking. SALES Sales Conversion Key Target Net GMV Recommended KOL and KOC Combination: MID-TIER KOLs —— 40% ~ 60% Focus on spreading promotion information across sub-segments of your target consumer’s group. KOCs —— 15% ~ 30% Focus amplifying promotion information + product USP while securing relatability and authenticity. Explosive Push Cooperate with livestreamers to promote products on e-commerce. 41
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  As Douyin's ecommerce ecosystemmatures and consumers become more accustome Influencers' pay rates are on the rise, as marketers gain a better understanding of how to Brands will continue to use KOCs, Micro and Mid-tier KOLs in their influencer market Key Takeaways PJDAREN INSIGHTS In order to counteract the effects of the current economic downturn, marketers in China make China's influencer economy is expanding rapidly and gaining momentum, evolving into a dynam China's social media landscape has undergone significant changes in recent years, and adinfluen influencers have adapted accordingly. Many influencers now primarily use Xiaohongshu and Douyin for sharing content and collaborating with brands. In 2023, it is expected that the influencer economy in China will be largely concentrated on these two platforms. marketing campaigns. This will allow for the creation of hyper-targeted content and more effective use of marketing budgets. By leveraging the expertise and influence of these individuals, brands can develop more concrete influencer marketing strategies that maximise their impact. accustomed to making purchases on the platform, Douyin is expected to become an increasingly important channel for brands. However, the rising cost of activating campaigns on the platform may prevent smaller brands from participating in its ecosystem. In 2023, it is likely that well-established, financially robust brands will allocate more resources to Douyin. will need to make the most of potentially limited influencer marketing budgets. This will require the implementation of more systematic evaluation approaches and the use of more comprehensive metrics to measure influencer marketing performance and inform future investment decisions. By adopting these strategies, marketers in China can continue to make effective use of influencer marketing despite financial constraints. to forecast the cost and measure the effectiveness of influencer marketing campaigns. This increased knowledge is expected to lead to the standardisation of pay rates by level and vertical, allowing for more consistent and fair compensation for influencers. dynamic ecosystem centred on influencer marketing. This form of marketing is a crucial tool for generating consumer interest, trust, and loyalty in brands, as well as promoting brand exposure and sales. Despite weak economic growth and the ongoing COVID-19 pandemic, the development of the influencer market has not been slowed, and brands continue to invest more financial and human resources into influencer marketing. 42
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  The majority ofinfluencers operate independent accounts and create content part-timeon a Xiaohongshu is known for its authentic user-generated content, which provides brands with valuable insights In recent years, many brands and marketing agencies have shifted their focus to small and medium-sized Chinese consumers are becoming increasingly sophisticated in their consumption habits, paying closer attention on a part-time basis. This makes it difficult for brands and agencies to effectively communicate with these influencers, raise requests, review and modify content, and maintain relationships. To facilitate smooth cooperation between brands and influencers, it may be beneficial for a third party to act as a mediator. This can help to streamline the process and make it easier for brands and influencers to work together. 43 PJDAREN INSIGHTS agencies are also increasing their demand for KOCs, incorporating new candidates in each campaign. Platforms are responding to this trend by providing more resources to support emerging KOLs and KOCs. This shift towards smaller influencers reflects the growing recognition of their value and influence. Choosing the right influencer candidates and evaluating their performance are two fma Key Takeaways attention to product quality and brand image. They are accustomed to using social media platforms to search for product introductions and evaluations from influencers to help them make more informed purchasing decisions. Additionally, consumers have higher demands for the professionalism, entertainment value, and authenticity of influencers and their content. As a result, the use of influencer marketing and social e-commerce on social media platforms is essential for the success of brands in China. valuable insights into the market. Many influencers have chosen to use Xiaohongshu as their primary platform, making it a rich source of high-quality influencer resources for influencer marketing campaigns. Due to its strong promotion capabilities, Xiaohongshu is often selected as the most effective platform for these campaigns, and it is an integral part of brands' social e-commerce strategies. medium-sized content creators, increasing their investment in KOCs and micro KOLs and reducing their investment in mega and top KOLs. Additionally, brands and infor key considerations for brands when planning and executing influencer marketing campaigns. The attribution model of PJdaren can help brands to select influencers in a scientific way and evaluate the results of their campaigns, providing detailed reports on each activation. This can help brands to make more informed decisions and ensure that their influencer marketing efforts are successful.
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  The Largest KOL+ KOC Network in China for Any Industry Providing your brand the tools & services to establish brand authority, build trust and drive sales We Know China. PJdaren is a data and influencer platform that believes in the evolution of the marketplace through technology, creative content and inspirational campaigns. In a time when digital has transformed the pace, expectations and capabilities of the market, we develop tailored solutions to empower global brands, helping them to increase their market penetration and eliminate redundancies in the process. More than 1,000 brands in 100+ countries use PJdaren’s end-to-end solutions every day. Here’s how we do it: Unique Voices: An influencer community with over 4 million KOLs and KOCs in every consumer industry to help brands get their message across to the consumers that matter most. Real-Time Brand Performance Data: Our platforms provide brand and campaign performance data capable of detecting microscopic changes in market trends, enabling you and your team to make the right decisions to maximise the success of your campaigns. Valuable Industry Insights: From market research to campaign data, our platforms and specialists deliver fresh insights to inform your campaign and product launch strategies, analyse market sentiment towards your brand and products, and optimise your marketing output to improve decision-making and increase ROI. Find out how our KOLC platform can help you LEARN MORE Follow us on WeChat Let’s talk
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  If you haveany questions about this study or influencer solutions at PJdaren, please reach out to us. Emma Zhang Business Development Director ezhang@pjdaren.com Vela Song Head of Operations vsong@pjdaren.com Ray Veras Managing Director rveras@pjdaren.com Contact Us CONTRIBUTORS 45 PJDAREN INSIGHTS JUNSHENG WONG GLORIA ZHONG NADYA ANNJEANETTE MOLLY ZHOU ANNIE GAO ELVA LUO
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  world.pjdaren.com