AUTHOR: FINTECH CIRCLE
Word of mouth and recommendations from family and friends factor highly in the Chinese consumer market. The digital transformation of this traditional sales network has been greatly enhanced in recent years with influencer digital marketing as one of the primary models for companies to create awareness around their brands. In an environment where trust is everything new fintech services will also have to gain endorsements from Key Opinion Leaders (KOL).
China’s middle class continues to create a huge consumer demand with millennials showing themselves to be early adopters of technologies and customer trends. According to a recent PwC report 86% of Chinese respondents said they use mobile payment services in comparison with an average of 43% in other countries surveyed.
For overseas fintechs trying to enter China’s consumer market an advanced social media and decline of search needs to be accounted for with Chinese millennials now becoming an influential demographic. According to a BCG report Chinese consumers under the age of 35 account for 65% of consumption growth and is growing at 11% a year, double of that of consumers over the age of 35.
China has the world’s largest social media market. The number of internet users in China grew to 854 million in the first half of 2019 with 819.9 million of them social media users. In 2019, 76% of consumers in China say their consumer choices are influenced by social media. According to a 2019 influencer marketing report by iResearch 60% of brands in China prefer KOL marketing to other digital marketing. KOLs in China can often be found on Chinese platforms such as Weibo, WeChat, Youku, Meipai and Duoying.
Fintech influencers in Europe and the US can be found in many different guises, from celebrities to industry thought leaders, and advertising companies are still finding if western fintech consumers will respond to influencers in the same way as they do when endorsing other industry products.
Snoop Dogg became the new face of Klarna, Swedish online payments solutions provider, adding to the growing list of celebrity fintech influencers including the likes of Will.I.Am, Shaquille O’Neal and Akon. In China influencers or key opinion leaders are being scaled in influencer incubators. The largest influencer incubator in China is Ruhan backed by Alibaba and Lenovo and filed to IPO on the NASDAQ in 2019.
Influencers helped drive $4bn in sales in China in 2018 with one in three purchases influenced by social media, a significantly higher figure than in any other country. The advanced functionality of social media and digital payments in China has enabled business models that are yet to be developed in other countries with social channels used as influencer tools to ask consumers what they want rather than telling them.
Chinese social media platforms are starting to charge brands a fee to run sponsored posts with an influencer. Other influencer marketing platforms are emerging where brands, influencers and agencies can negotiate and publish content. Connecting with the Chinese influencer ecosystem should be one of the first steps for overseas fintechs when trying to enter the market.
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