With the trend of social e-commerce, has KOL marketing become a new traffic entry point?

Why do Chinese companies choose KOLs as their first choice for cross-border marketing?

Urgent need for traffic entrance

For Chinese merchants to go overseas and market through traditional channels, the process is very cumbersome and requires going through many steps before the products can be displayed to end consumers. There are no good marketing channels and traffic entrances. But through cross-border KOL marketing, consumers can achieve what they see is what they get, and KOLs help companies sell their products better around the world.

KOL influence as endorsement

If your company needs to compete through branding and needs to go overseas, then you must choose overseas KOL marketing as the best way of marketing. Just like Chinese brands in the country, they also look for core media and corresponding KOLs to do publicity. If Chinese companies want to conduct cross-border marketing overseas, they need local KOLs to use their influence in the local area to endorse them. For companies to acquire users overseas: the core is the trust mechanism, and KOLs understand local people better than we do.

Urgent need for brand premium

The biggest pain point of China's manufacturing industry is that it has no premium rights. The production technology in the clothing, shoes and hats industries has been well developed. Many of them are OEM manufacturers that can process for NIKE and other brands, and their production and supply chains are fully up to standard. However, since there is no brand effect like NIKE, the unit price of the goods is very low. Therefore, the overseas expansion of China’s manufacturing industry now urgently needs to export its brands and generate brand premium. The real competition between manufacturing industries and between enterprises will return to brand competition, not just quality competition.

KOL marketing is so effective, why are there no big companies in this industry?

There are none in China at present, but there are relatively leading companies abroad, such as FameBit.

FameBit was acquired by Google for $200 million in 2016. It mainly produces exquisite YouTube videos and has 900 North American bloggers. The core users are doing marketing in North America.

1) Consulting services

15% commission. There is a fee for connecting merchants and internet celebrities.

2) Solution implementation service

30-50% commission. Responsible for the formulation of the overall marketing plan and its execution in conjunction with influencers.

Socialbook

The core is influencer marketing, owning independent influencers and resources on YouTube and Instagram, allowing users to understand and connect with influencers through the platform.

Fragmentation of information and resources

Overseas MCNs are not able to connect with Chinese cross-border e-commerce customers smoothly. The pain point is the high communication costs. There is information asymmetry between overseas Internet celebrity MCNs and Chinese merchants, and MCN's information and resources are fragmented.

Lack of standardization and regularization

KOL marketing has not yet been standardized and regularized, so there are no cross-border KOL marketing giants emerging in China. The old MCN is mainly responsible for content, consulting and services. This will result in merchants not seeing marketing results and having no ROI to evaluate. It can only do brand promotion, such as Jiaduobao sponsoring a TV station, but it cannot evaluate ROI.

High barriers to start-up and operation

If a merchant sets up an independent department to conduct overseas marketing, the cost will be too high, and it will also require multilingual personnel and foreign employees. It is difficult to set up an independent department in a startup or early-stage e-commerce company. Therefore, most businesses outsource their overseas marketing to third parties.

Internet celebrity marketing is actually about matching social resources. It truly helps domestic merchants display their products more intuitively to global consumers, and helps overseas Internet celebrities realize traffic monetization and achieve the matching of global social resources.

Lack of data foundation and market awareness

At present, the penetration rate and awareness of the entire market are still insufficient. When brands invest more and more, have done enough trial and error, and have accumulated enough data, the whole KOL marketing thing will have great development potential and imagination.

The market is transparent. What do you think is the most important barrier to influencer marketing services?

Data barriers: blogger tags

The visual data we can see, such as the number of views and the number of fans, are not useful business data. The real business data of influencer marketing is the blogger tag. What brands has the blogger promoted, the likes and feedback each promotion received, the attention and purchases it brought, and the number of reposts and shares that promoted the popularity of the brand. The blogger’s tag includes the age group of fans, distribution of fans and preferences. Only when the labels come out can the business attributes of bloggers become clearer, and businesses can choose targeted bloggers for KOL marketing. All of this requires data accumulation.

Marketing case accumulation

Whether a product sells well or not depends on the early marketing before users use it. For example, hunger marketing, bloggers spreading information to each other, and generating fan interaction. The core position of marketing is understanding the products and audiences. Therefore, sufficient trial and error and case accumulation are needed.

Time window leading

If other companies want to copy, there is still a time window issue. Whether it is signing internet celebrities, accumulating data, or being able to design marketing content, it all takes time to settle and polish.

Putting aside KOLs, analyzing from the perspective of cross-border e-commerce, where do you think the best entrepreneurial opportunities lie and what are the most difficult problems to solve in the industry?

1. Logistics

Pain points: poor delivery time, long turnover, frequent lost items, high freight costs

The customs clearance in the destination country and the Last Mile delivery in the local country are slow, and it can take up to 180 days for the product to arrive in Brazil.

Opportunity: Last Mile Delivery

Whoever can solve the problems of poor delivery timeliness and safety of Last Mile delivery will have a chance to succeed in cross-border logistics.

Cross-border e-commerce pre-sale model reduces logistics costs

At this level, the pre-sale model is a strong opportunity. The pre-sale model shortens the payment period and reduces freight costs through consolidated shipping. It can enable the company to operate with very good cash flow.

2. Payment

Pain point: insufficient penetration

Multi-currency settlement, foreign exchange control, etc. bring payment pain points.

Opportunities: Small and medium-sized countries have new opportunities in online payments

The online payment capabilities of small and medium-sized countries are relatively weak, and Chinese companies lack the ability to collect and settle payments overseas. However, it is difficult for small merchants and enterprises to expand online payments. Expanding payment is a relatively heavy task and still requires more innovative companies to support and develop it.

3. Traffic

Pain point: Traffic dividend has a window period, and there is a lack of new methods to attract traffic

As many businesses flock to the new market to share the traffic, the cost of acquiring customers will gradually increase. The commonly used method is to increase the platform interface of traffic, but there is a lack of innovation in the methods and means of attracting traffic.

Opportunity: Competition for deep interactive traffic in vertical fields

1+1>2 of Internet traffic, content dissemination, and user fission interactive traffic reduce marginal costs. The transmission between social media has strong stickiness, high cost-effectiveness, and precise users, which will form a barrier to traffic. The best interactive traffic is in-depth exploration of vertical fields rather than comprehensive platforms. The more vertical and professional it is, the more it combines local market conditions and user needs.

Under the current economic conditions, from the perspective of starting a business overseas, based on your field, what opportunities are there to start a business and make money?

Emerging markets + targeted users + new services, products and experiences

Source: Overseas Q&A