Shenzhen Styke: Mini Case Study Memo

I would like to focus on the emergence of Shanghai culture and its effect on KOL (Key Opinion Leader) / celebrity-based e-commerce. Shanzhai culture has made it vastly easier for people to create products of their own, and social media platforms like WeChat and Weibo have made it vastly easier for people to sell those products. Combine those two things with a loyal, socially-engaged fanbase and you have the potential to cash out!

Ever since the emergence of e-commerce, the intern that been the world’s favorite place to buy things. We all remember the epidemic of ‘pop-up’s’, annoying spam-like advertisements that flooded the internet around its inception. Now, in 2017, we have companies like Facebook which snoop on our browsing history and use the information gathered to advertise products (that we either want or don’t want). The issue with these advertisements is that they aren’t always warranted, and it’s difficult to pinpoint and directly penetrate certain demographics.

It is no secret that celebrities and media personalities have a profound impact on the buying habits of their fans. Merchandising has always been a great revenue stream for these people, but the internet has taken things to the next level. Influencer marketing is the next big thing, and it is starting to make billboards and even online advertisements obsolete. You can most likely your favorite celebrity or media personality making ‘sponsored posts’ with the hashtag ‘#ad’ that not-so-subtly advertise a brand or company’s product. Many influencers are taking things to the next level by using their influence to create their own merchandising market. Music artists are creating clothing lines, tech brands, and even apps, knowing that their (many) loyal fans will be quick to stuff items in their shopping carts like Americans when a natural disaster is on the horizon.

Influencers and celebrities in China are at a great advantage because social media platforms like WeChat allow you to create & post media, interact with fans, promote products, and sell products, all under the same roof.

In the Western world, most apps are still limited to just posting and interacting, with no monetization asides the ability to publicize “paid partnerships” with existing brands. But they’re starting to catch on. Facebook launched its integrated marketplace las October,  with 550 million + monthly buy-and-sell group users, 18 million + new items posted for sale in the marketplace in the US in May 2017 alone, 77% positive growth between buyers and sellers in the marketplace (in the US). The most popular categories in the US were furniture, babies & kids, and women’s clothing.

Twitter also recently launched a new feature called ‘Media Studio’, where every user can view detailed analytics on their content, including specific follower and audience demographics. Among the demographic categories include location, gender, music interests, news interest, consumer buying styles, household income, and even wireless carrier usage. This information makes it incredibly easy to detect patterns in follower and viewer demographics, and even easier to create products and content that is tailored to their liking.

Companies in China like PARKLU, specifically focus on Influencer marketing for brands and KOL’s. Gone are the days when companies paid millions of dollars for limited ad-space on billboards or on the street. They are beginning to catch on to the power of using social media to reach customers. Companies are giant ad-agencies of tomorrow, curating successful campaigns with KOL’s and brands, and providing detailed case studies on the reach, customer acquisition costs, and more.

Memo Case

Below I would like to focus on a very popular mobile game “王者荣耀“ ( mobile version lol ). The game is made by Timi Studio which is belong to Tencent, to some of the people, the game is originally made in China, but actually the concept is from League of Legends. Definitely Tencent is a company which has a long-term plan: they got the permission of running lol in China and saw the market of mobile game, then they changed it to a local version. The game has already launched two years, from a unknown game to a well-known game, they are really successful and might be defined as the most successful mobile game ever in history. Currently there are still a huge numbers of active online users, so they kept updating the game quality. Also, Tencent is working on exploring the oversea market on mobile game, they launched similar game in America and Europe. With the rich economic base, Tencent cooperated with marvel and other popular animation company to satisfy people with new heros.

Wechat and QQ might be one thing that every Chinese knows, throw this product line, they successfully sell lots of products. And because Chinese cannot live without wechat, we can imagine Tencent already took all the market of this area. From my personal observation, Every mobile game tencent launched is successful, since the users are kept always. There are some similar lol style mobile games competed with 王者荣耀 but the reality is that they were all failed— they cannot beat Tencent at all. So who is the real competitor? The answer is, the competitor is themselves… the next popular game in China is PUBG (Playerunknown Battleground), Tencent is negotiating with Bluehole about taking the right of running this game in China ( like lol several years ago) and they already start working on creating mobile version PUBG. The fact is that Tencent is starting to move the center from 王者荣耀 to PUBG.

I think Tencent is really smart and sensitive to the market. As a huge, wealthy company, they owned enough resources to successfully run a project and they always the first one to smell the chance and earn the first bucket of gold.