The Rise of the Wanghong Economy in China

The Rise of the Wanghong Economy in China

The Wanghong economy in China is on the rise. If you are an active user on social media in China, you have probably heard of this type of influencers.

In this article by China Gravy, the digital marketing agency of your choice, discover the world of Wanghong. Find out who they are, how they work, and how to boost your business with influencer marketing.

What are Wanghong?

Wanghong or 网红 means “internet celebrity” in Chinese. It refers to professionals who use their popularity to get their fans to purchase goods or services that they endorse. They publish stylish photos, videos, and other content online for their fans. Wanghong typically has eye-catching appearances, with which they present fashion, accessories, and cosmetics.

Other types of influencers are KOLs (Key Opinion Leaders) and KOCs (Key Opinion Consumers). While Wanghong are professional influencers, KOLs often have other jobs, which adds to their credibility. Recently, working with KOCs is trending. They are real consumers, who provide their honest opinion and recommendations.

In today’s world, an abundance of information and entertainment is available with a simple swipe or click. That’s why Chinese consumers value the relatability and trustworthiness of influencers, and KOCs in particular, whom they see as their peers.

The Wanghong Ecosystem

This part of the Chinese e-commerce economy is on a steep rise. In fact, the Wanghong economy is estimated to reach 15 billion USD by 2022. These online celebrities reflect an image of a life of beauty, class, and perfection on the internet. With one single post, they can earn thousands of dollars.

The most important tools for them are Chinese social media platforms. Wanghong present themselves on WeChat, Sina Weibo, Tik Tok, and Co. Their large number of loyal followers and fans are ready to buy any product their influencers recommend. Because their idols put real faces on products instead of generic company logos.

By posting pictures or video streaming themselves using or wearing a product, Wanghong get their followers to buy these products. The fans trust their idols. Moreover, they hope that by using these products they will be closer to them and their lifestyles.

Wanghong also appears on websites and partner with online shops, converting their fans into loyal customers of the business. The social media platform Xiao Hong Shu (RED) is a great example of this. It became popular in China by providing trustworthy quality reviews for an engaged community.

On video streaming sites like TikTok, Wanghong post tutorials, or reaction videos of themselves. They may be using a product, listening to music or singing a song, or simply sharing their views on trending topics and pop culture matters. These tactics increase interest and exposure to brands and products in the long run.

Business Models of the Wanghong Economy

To give you an idea, Papi Jiang, a famous Wanghong, charges over 20 million RMB (2.8 million USD) for an advertising video. Another example is Zhang Dayi. She is a fashion influencer who dominates the Weibo platform. But how is it that they are seemingly able to convince their fan base to take action so effortlessly?

Wanghong, and influencer in general, primarily strive to increase their number of monthly active users. They then convert them into fans and loyal customers. To achieve this goal, there are two kinds of business models used in the Wanghong economy:

  1. Online retailing
  2. Social media marketing

Let’s take a closer look at these models.

1. Online Retailing Model

Influencers sell their own products by posting pictures and videos or live streams. Alternatively, they also can post content about their own products they have created. Sometimes they work in collaboration with a brand or manufacturer to create a product that they have designed. They post them on their social media and e commerce pages for their fan base to see and purchase.

They greatly influence their customers’ decision to buy. This is because their fans feel as if they can relate more to products created by regular people like themselves.

The consumers also influence the kind of products their favorite Wanghong create as they have a strong relationship with their fan base and interact with them often. They learn what their fans like and dislike and incorporate this feedback into the creation of their own products.

2. Social Media Advertising Model

In this scenario, Wanghong work with established brands to advertise a brand’s products and services to their fanbase. They charge the company per post. In exchange, they create engaging content that inspires their large follower base to buy these products or services.

Many fashion influencers work this way. They partner with clothing and make-up brands and post pictures of themselves in outfits of the brand on their social media pages along with purchasing details. Since their fanbase is loyal to them and may have a desire to dress in similar makeup, shoes, or bags, they rush to purchase the brand items.

Companies must choose a Wanghong with a similar style to the products they sell and work with them to promote their brand. For instance, a beauty brand will more likely work with a makeup influencer than with an influencer whose target audience is graphic art or comic-con fans. Even though both might deal with makeup and dress choices.

Brand pages can also become Wanghong in their own way by utilizing these methods to adopt a more personalized tone, encourage discussions, and interact with their followers and target audience.

The Flourishing Wanghong Economy in China

China, as the most populated nation in the world, has a high buying power. In addition, as standards of living continue to rise, influencers and Wanghong set realistic images of potential lifestyle.

Moreover, China’s middle class is emerging. By 2022, 76% of China’s urban population will be part of the middle class. This allows for many specific target audiences for various niches – from tech junkies to fashion/beauty, and fitness enthusiasts. Today, everyone can digitally follow the life of their favorite online celebrity. This helps young people in particular to find their own identity and interests.

To sum it up, in Chinese culture, people are more likely to purchase products based on the recommendation of others. This is due to the fact that fans have a close relationship with their online celebrities and friends on social media. Therefore, they are more likely to buy what they recommend instead of generic mass targeted advertising campaigns.

Wanghong Economy – The Takeaway

The Wanghong economy is flourishing. In today’s world, consumers know exactly what they want to get out of advertisements. Wanghong have a large potential as brand ambassadors as long as they are authentic and fit the brand.

Collaborate with these influencers to promote your brand on Chinese social media platforms. Influencer marketing is a great alternative to paid ads and other marketing campaigns.

Have we sparked your interest? If you want to work with Wanghong in China, we at China Gravy can help you to get started. Contact us today to skyrocket your business in the Middle Kingdom!

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