Luxury brands in China shell out big bucks for key opinion leader marketing. Brands adopt key opinion leaders (or KOLs, as they’re colloquially known) to draw on their massive online popularity to raise awareness, shape public image and bring in sales from new consumers.

However, there are plenty of instances when collaborations between brands and KOLs have resulted in lesser-than-dazzling returns, whether because of low sales conversion rates generated by KOLs or negative social media buzz that the partnerships bring.

At the WWD Digital Forum: New York, Jing Daily spoke with Brian Buchwald, the co-founder and CEO of the marketing agency Bomoda, whose expertise is KOL management in China. In the following interview, Buchwald offers some tips for luxury brands looking to work with KOLs and some misperceptions about their power that brands would be advised to watch out for.

Image credit: Courtesy of Bomoda. Brian Buchwald.

Why is it so important for luxury brands to work with Chinese KOLs?

Brian Buchwald: It is a chain process. The first link of the chain will be the fact that the Chinese consumers have become so important for these big brands. So if you are looking to build a successful retail business [there], you need to build it with Chinese consumers. If you look at Chinese consumers, you have to understand their purchasing habits. To be specific, when looking at their discovery habits in terms of how they start to make decisions about what they want to buy, influencers play such a dominating role in that process.

Some luxury brands choose to work with celebrities, while others like fashion bloggers. What is the difference between them?

They are certainly different use cases. So if you think about the use of celebrities, [brands] want to be associated (more passively) with celebrities through both offline and online media. For instance, you choose a celebrity who becomes the face of your brand, they wear your products to offline events. There is a more expensive situation when [brands] make them your brand ambassador. That is a typical way to ensure a lot of images. Your brand image is proliferated along with the celebrity’s in a really meaningful way.

[The use of] bloggers is a little bit more directed. They usually have specific areas of expertise. What brands would do with bloggers is to give them products to build a relationship. Then the blogger will write about that brand or do a video tutorial with that brand, where it becomes a very specific use case of description and utility of the brands along with that bloggers. Also, bloggers have a much smaller but more directed fan base than that of the global celebrities.

Should luxury brands work with celebrities who have more than one partnership?

I think it is an even larger issue in the West, where consumers are less forgiving of celebrities and bloggers working with too many brands. They tend to lose authenticity. In China, we still see the same thing, but you do have celebrities, whether it is Angelababy or Yang Mi who work with a number of brands. There is typically one brand that they are best known for, whether it is Dior or Michael Kors. They are the face of that brand.

That being said, some of the most successful use cases are rising celebrities who are known for the first collaboration they made, or they are known for some partnership that becomes a breakthrough.

Can Angelababy still create value for Tag Heuer and UGG after being the face of Dior?

Yes. If you look at Dior, Tag Heuer, and UGG, these are three very different product bases. You are talking about luxury, affordable watch, and contemporary footwear brands. In that case, Angelababy is definitely walking the tightrope in a sense that she has to be careful and the brands who work with her, every extra brand that works with her, has to be aware of the fact that she has become so well-known by being associated with certain brands like Dior.

However, if you are UGG, and you start working with Angelababy, you also get the benefit of the brand association [that] she is creating with the brand Dior, which is tremendously positive. So the question to me, would almost be more for Dior: Do they want her to work with UGG? Does that actually dilute the value of their partnership?

What are some misconceptions that brands have when choosing KOLs?

First off, we noticed that global leadership is abdicating all the responsibilities to the local China team. There is definitely a belief on our part that the Chinese team is better than the global team in working with KOLs. But it is important for the global team to have some oversight of what the local team is doing, and understand whether it meets the brand promise and the trust they build with the global consumers over the years and decades.

As it relates to China specifically, this is not going to be revolutionary, but it really becomes more now about the quality of the interaction that the KOLs generate, rather than just the number of interactions. For instance, one of the things we see in the market right now is the concept of the “young [little] fresh meat“: all these very attractive young men that brands are increasingly adopting as KOLs, who drive tremendous reach and engagement. [However], typically what we look at is the product interaction and purchase intent. [Little fresh meat] drive very low product interaction and very low purchasing intent. Their followers may not be able to afford the products even if they wish they could.

What are some necessary steps for luxury brands to follow in order to find the right KOLs?

What we tend to focus on is [to understand] what was the quality of collaboration these KOLs have done previously with other brands. It is not just who they have worked with, but the effectiveness of those collaborations and brand equity that has been built along with that celebrity.

We also dive into the audience and fan bases of those celebrities. It is one thing for the celebrity to have the large fan base, but another thing for celebrities to drive high sentiment and purchase intent and high engagement. It is still another thing to understand whether that audience is in line with the brands.

[In addition], we also think it is important to understand where the KOL is with their professional life and where they are with their personal life. Then we think it is also important to really understand the audience that celebrities bring—demographically, psychographically and behaviorally.

Article originally published on Jing Daily. Republished with permission.

Cover image credit: TAG Heuer