New Marketing Strategies in China: The Digital Fan Economy

The ‘fan economy’ refers to a business model in which economic and social benefits are generated based on the relationship between fans and the people they follow. In the past, those being followed were mainly movie stars and industry celebrities, but today, as the internet develops in leaps and bounds, network celebrities or key opinion leaders (KOLs) in various sectors have emerged on social media.

The fan economy is now ubiquitous in the cultural and entertainment industries, as well as in product sales, and the service sector. Industry players make use of social media platforms to attract large followings of fans by offering a wide range of personalised products and services appealing to them, eventually leading to sales conversion and profits.

ifensi.com, established in 2005, founded Beijing Fensi Network Technology Co Ltd in 2014 after acquiring venture capital funding. In an interview with HKTDC, Tenson Lin, Operations Manager of Fensi, explained how the company conducts social media marketing and provides online and offline promotion and advertising services for brand owners.

The Private & Public Traffic Marketing Strategy

Lin explained that ifensi.com uses platforms that generate private traffic (i.e. social media followers’ visits to the official or personal accounts of stars, network celebrities or KOLs) to attract a massive number of fans. The greater the number of fans, the higher the number of views a brand owner’s products/services get. These followers in turn help promote and sell the products/services via multiple channels.

Criteria for Matching Brands with Social Media Influencers

Before Fensi starts working with a client, the company conducts in-depth exchanges with the brand owner to gain a good understanding of its brand positioning, style and target customers. Then a plan will be devised according to the client’s actual conditions and demands. After the overall plan framework has been formulated, proper communication and exchanges with the client with regard to execution details are a must.

Lin said: “For instance, when choosing a KOL that matches the brand, careful consideration and assessment will have to be made on the KOL’s age, gender, style and social media traffic. Besides, the specific promotional direction and social media content to be published must be examined and approved by the brand owner.

“Timely creation of content and suitable choice of promotion channels should also be made for ad hoc marketing activities, such as new product launch, repackaging and promotional offers.”

Fensi usually signs two-year contracts with brand owners, setting out KPIs (key performance indicators) and stipulating that data collection is conducted once every half year. Under this model, the company would, based on the requirements of the client, formulate a social media promotion and advertising plan, create social media advertising content, and help the client’s brand and product reach target audiences. Lin said: “On the part of the brand owners, they would assess content quality, account maintenance, fans compatibility, and influencer performance in addition to market awareness.”

Lin saw understanding each client’s perspective, needs and objectives as vital to conducting successful activity, saying: “As we are in direct contact with clients, we can fully understand their demands. From the very beginning when we start to create the advertising content, we put ourselves in the client’s shoes and give thought to: what should be done to link the audiences with the content, product and brand; what form of links should be used; and which platforms should be chosen to build the linkage?”

Lin pointed out that Fensi has long-term co-operation ties with various leading MCN (multi-channel network) companies, public relations agencies and social media platforms, and as such is able to help brand owners choose the most suitable third-party resources. He said: “Fensi has focused on advertising for many years and has developed its business from offline to online. Currently the ratio of the company’s offline business to online business is one-to-four, with the share of online business growing bigger and bigger.”

Live-Streaming Sales Promotion is No Sure Win

Different social media platforms attract different audiences. In terms of coverage, WeChat is the most extensive, attracting viewers of various age groups and registering the highest daily traffic. Trailing WeChat are short-video platforms such as Douyin and Kuaishou, which mainly attract people under the age of 40. Although the coverage of these short-video platforms is not as broad as WeChat, they are better for product sales.

Hong Kong Companies Advised to Build Brand Awareness First

Fensi has worked with a number of Hong Kong companies. In Lin’s views, Hong Kong companies attach importance to contract terms and conditions and are highly co-operative, yet they must continue improving their understanding of the mainland market, including knowledge about consumers as well as social media operations. He said: “Hong Kong companies should strengthen communication with mainland marketing and advertising agencies in a bid to understand the market more quickly.”

According to Lin, the approaches to advertising and promotion in Hong Kong and the mainland are different, with great variance in rules and regulations, cultural background, consumption power and education level. Also, the difference in financial clout between big companies and small to medium-sized enterprises (SMEs) is not comparable and their promotion and advertising strategies also differ.

For SMEs in Hong Kong, defining their market positioning and target consumers is of prime importance, as it can help them invest in precisely the right place. Lin said: “For instance, Big Vs¹ with high traffic volume normally demand high charges, so Hong Kong companies should look for accounts which have lower traffic volume but are a better match with their brand. Also, since live-streaming sales incur high cost, they should focus on brand building in live streaming. Promotion by using multiple channels and diverse forms, such as mini-program interactions and WeChat survey tools, requires relatively low resource input but is effective in gradually increasing consumer awareness and enhancing brand exposure.”

¹ Big Vs refer to influencers who have been verified by social media platforms and have a large following of fans. For example, Big Vs on Weibo are those with over 500,000 followers.