China’s crazy influencer industry: A German stands out amidst clone factories and billion-dollar revenues

Thomas Derksen Chinese Youtube star from the Fatherland
Thomas Derksen Chinese Youtube star from the Fatherland

Approximately EUR 15.8 billion in market volume, influencer training camps and virtual influencers. The Chinese influencer-marketing sector is an eclectic mix of the bizarre and the massive. The industry not only dwarfs the next three largest markets combined, but has also been in existence much longer. Today we are taking a closer look at the Middle Kingdom, its influencer market and how one typical German made an atypical splash on the Chinese influencer marketing scene.

In China, Silicon Valley pales in importance to Beijing’s tech hub, Zhongguancun. With active internet users (802 million) exceeding the combined populations of the United States, Brazil and Indonesia, China has the world’s largest social media market, so there is simply no need to look west. And in China, the influencer industry is exploding. Whereas the industry in Europe’s DACH region (Germany, Austria and Switzerland) is estimated to have generated approximately EUR 506 million, the revenue generated on the Chinese influencer market is a whopping EUR 15.8 billion—i.e. 30 times more. The revenue volume is said to be larger than that of the entire Chinese movie industry.

100 cars in 240 seconds—the KOLossal sales the norm

Influencers in China aren’t called influencers but Key Opinion Leaders (KOLs for short) or Wanghongs (“Online successes”). If you want to read up on the Wanghong economy, there is a “Wikipedia page on the subject.” There are several hundreds of thousands of Wanghongs who post, promote, pose, explain and recommend their hearts out—several times a day—on dozens of platforms for all manner of verticals imaginable.

With a seemingly never-ending stream of new platforms and new mega apps popping up, it is hard to say for certain, which KOLs are the most successful. In contrast to Europe and the US, the mega KOL superstars are not measured by followers or influencer analytics, but in sales per minute. It’s here where fashion Wanghong Becky Li made a massive splash on July 21, 2017 as she sold 100 turquoise MINI Coopers at EUR 36,000 each in four minutes. According to this Business of Fashion article, 54 percent of all college-age Chinese persons want to be influencers professionally.

Influencer clone factories and conglomerate sized agencies

The marketing machine beneath the surface has also long-since been massive. Influencer agencies are typically the size of massive international conglomerates, with some having as many as 30,000 influencers under contract. Fully-automated influencer marketplace startups, comparable to AspireIQ, began searching for investors in Beijing as early as a decade ago.

According to reports there are more than 200 influencer incubators, also called KOL-clone factories, that exist solely to transform young girls into Wanghongs, including training camps and cosmetic surgery. Many end up specializing on specific platforms, such as direct sales channels on Alibaba or live-streaming platforms, where they sell their own product lines. To stand out among the mass of the similarly styled glut of white-skinned, big-eyed, small mouthed and pointy-chinned beauty queens, luxury brands, like Gucci have begun turning to virtual influencers, who digitally don their latest collections.

Major reach, but marginal “brand-fit”

Luxury brand marketing pros and followers have very publicly vied for the brand engagement of a-list KOLs and their coveted reach: Papi Jiang and Angelababy. Papi Jiang, a Chinese comedian who this 2016 New Times Article called “China’s Viral Idol”, is known for her vlogs, where she rants and raves about life in the Chinese metropolis. In her messy office, she sits in front of a camera, no make-up, frazzled hair, rocking jeans, a t-shirt or a hoodie and pushes luxury brands, like Swiss watchmaker Jaeger LeCoultre. Critics don’t see a “brandfit,” just a partnership based on reach.

Angelababy, perhaps best described as the Chinese Kim Kardashian, got her start by being at the heart of a very bizarre, very public scandal, where the matter of contention was whether or not she had had cosmetic surgery. Soon after, she was brand ambassador for French luxury brand Dior, alongside Natalie Portman. Chinese Dior fans thought she was too “common.”

China’s tonic hawking Kraut

One person who is anything but ordinary for the Chinese market is Thomas Derksen. The 28-year-old German is originally from the Cologne-area, now resides in Shanghai, where he is a bonafide celebrity thanks to his insanely popular sketch clips that he and his Chinese wife produce and edit together. In fluent, accent-free Mandarin, he gained fame through parodies of stereotypical Chinese archetypes like grandkid-crazy step mothers, chain-smoking step fathers and shop-a-holic spouses. Derksen now says he has six million followers on more than 15 platforms. While it would probably be good enough for the top-10 in Germany among male influencers, it’s a niche position in China as a funny, authentic German.

That niche position seems to be a very attractive one for advertisers as brands have begun employing him as a brand spokesman. In a video for his client Dr. Kurt Wolff GmbH & Co. KG (manufacturers of Alpecin and Plantur hair growth tonics) Derksen takes his fans on a tour of the company factory in Bielefeld. The 11-minute clip features him showing his wife all the crazy products that German supermarkets have, including Alpecin’s caffeinated shampoo, which claims to prevent hereditary hair loss—a hot topic among males everywhere, including China. After his wife is blown away by the product, Derksen takes his wife on a tour of the factory, telling the brand story and even gets his hair washed with the shampoo. His wife can hardly contain her excitement at German ingenuity and quality. The clip has been seen over 5.2 million times, generated 18,000 likes, 5000 comments and 4000 reposts.

Sketch clip generates more sales than TV spots

In the comments beneath Derksen’s Alpecin video, several followers posted what appears to be tracking codes to their Dr. Wolff products that they immediately purchased on Alibaba’s T-Mall platform. And Derksen also promises to reward the 20 best comments by sending them shampoo samples.

Derksen’s advertising clients have taken notice of the performance: “For our marketing campaigns, there is only one KPI we care about: sales,” says Fabian Schneider, general manager at Dr. Wolff in Shanghai. This past summer, his team compared sales at three different times: one without any marketing campaigns, one during an eCommerce event with TV ads and one with Derksen’s video. “Usually, sales level off the week after a campaign ends, because customers have just purchased the product. After the eCommerce event and the TV ads, we ran Derksen’s video. Sales held steady, above levels during times without any active campaigns. We had more sales a week after than normal and it ended up generating even more sales than the TV spot,” says Schneider.

Influencers the antidote to adfraud

There were several factors on the Chinese market that led the Dr. Wolff marketing team to collaborate with Derksen. “While China is very digital, we were unable to generate any significant sales revenue through programmatic buying,” says Fabian Schneider. He also views “OTV,” i.e. Online TV, critically. “Every media agency here will tell you that you have to be on platforms like Youku, Le TV and others. But the scatter loss here is incredibly high and you aren’t paying peanuts in China for OTV—it’s not a minor investment. And to top it all off, there are numerous intransparent grey areas here, so many click bots, making it very difficult to know in the end how many people our ads reached.”

What sets Derksen apart is his authentic, creative and educative art of storytelling and the way he emotionally conveys brand experiences with homemade explanatory videos. “Dr. Wolff is known for its “outside-the-box” thinking when it comes to its marketing. We didn’t want any Chinese celebs or stars to generate awareness—we have always strove to be different.” And that’s how they ended up deciding on Thomas Derksen.

From bank intern to content creator

Prior to studying Chinese and moving to Shanghai, Derksen worked as a banker in Cologne. And it’s this salt-of-the-earth style that he exudes in his clips—the contrast to Angelababy, Becky Li and Papi Jiang could hardly be greater. He posts videos, of varying length, twice a week on Weibo, Wechat, Kuaipai, Miaopai, TencentVideo, Youku, iQiyi, Bilibili, Acfun, Toutiao, Yidianzixun, Facebook, Youtube, HimalayaFM, Xiaoying, Ixigua, Sina, Meipai, Renren, Baidu Baijia Hao, PearVideo, QQ, Dianping, Tiktok, Netease and Quduopai.

In addition to Dr. Wolff, Derksen has also worked with other German household names like underwear makers Triumph and Schiesser, Bayern Munich, coffee producer Tchibo and the Rossmann drugstore chain. “Germans tend to be annoyed with ads and are very sensitive. The Chinese, in contrast, applaud and welcome them and would more likely say: ‘You really did a fantastic job presenting that product again’ or they congratulate me and tell me what an honor it is to have worked with that brand. In China, entertaining, creative advertising is rewarded,” says Derksen.

Do you want to learn how to get the most out of your marketing activities in China? Don’t miss our special OMR Deep Dive on Strategic China Marketing taking place in Hamburg, Germany on November 11th. Space is limited—get your ticket today!

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