New trends of Chinese social media: Mini-apps, KOL e-commerce, and live streaming

The Chinese social media landscape is unique, fragmented, and the most dynamic of the world. It requires a lot of attention to keep informed of the latest innovations that pop up.With the rise of Tencent’s WeChat that gathers Facebook and Whatsapp functions and Weibo, the Chinese equivalent of Twitter, social media in China is booming. At the same time, mobile internet is growing. According to the China Internet Network Information Center (CNNIC), the number of mobile internet users hit 656 million in June 2016, making up 92.5% of the 709.58 million internet users. Among all mobile internet users, 91.7% of them have 3G and 4G networks. This high mobile Internet penetration adds a new dimension to the developmentof social media. Here are three new trends of Chinese social media that brands and companies should take into account for their digital strategy to reach the Chinese consumers.

WeChat Mini-apps: the accelerating decline of mobile apps

The most popular instant messaging app in China, Tencent’s WeChat, is booming at 806 million monthly active users (MAU). According to Kantar’s China Social Media Impact Report (2016 April), WeChat is the most widely used instant messaging or chat app in China, with 75.9% reach among internet users at the end of 2015 (compared to 68.6% in July 2015).     In September 2016, WeChat launched a new function called Mini-apps.Mini-apps allow users to use apps directly in WeChat without installing anything. Users simply have to scan a QR code or to search the name to open an app. Apps will be everywhere, ready to use at any time without occupying too much storage memory. This new function is still in private beta, and a large number of WeChat users are looking forward to trying it.   Currently, WeChat users open the app 14.5 times and spend 48 minutes per day on average. It is foreseeable that Mini-apps will attract users to use WeChat more frequently and to spend even more time using it. This new function may accelerate the disappearance of mobile apps with a small user group, and contributes towards consolidating social media apps market. According to Gartner, 20% of brands will abandon their mobile APPs by 2019 because APPs are not paying off.

SinaWeibo KOL economy: a new e-commerce real-m

SinaWeibo is the biggest Chinese microblogging website, with 282 million monthly active users. Microblogs allow users to follow famous celebrities and enable the emergence of key opinion leaders (KOLs), who mainly earn money from advertising and cooperation with third parties. However, some fashion KOLs on Weibo successfully created a new e-commerce modelthat quickly pays for itself. These KOLs usually own their fashion shops on Taobao, the biggest e-commerce platform in China. They accumulate a large number of followers on SinaWeibo and bring the traffic to their Taobao stores by a simple link. For instance, the most famous fashion KOL Zhang Dayi has 450 million followers on SinaWeibo. Baidureported that Zhang Dayi’sTaobao shop achieved 300 million RMB sales (44.53 million USD) in 2015.   The cost of KOL e-commerce model is much lower than traditional fashion companies. These KOLs are known for their good tastes in clothing, and they succeed in getting a lot of followers with similar fashion style. KOLs post pictures wearing new clothes on SinaWeibo and can receive instant feedback from followers. They can then produce these clothes within seven days and bring new arrival on Taobao shops. Precise targeting and immediate feedback bring high conversion rate for Taobao shops. SinaWeibo platform also helps KOLs to save marketing spending, and just-in-time production limits storage costs.

Live streaming flourishes in China

The live streaming market is booming in China. The current market value of this industry is estimated at 9 billion RMB (1.33 billion USD). Chinese main internet media Sina reported that in 2016, China has at least 200 live streaming platforms on which are connected 325 million active users. More than the half of them are millennials. The huge number of mobile usersbase and high popularity of 3G and 4G mobile networks facilitate the development of the live streaming industry, which grows increasingly attractive. Therefore, even internet giants want a piece of the action: Tencent introduced its live streaming platform in 2010 that focuses on game live. SinaWeibo and Taobao also have developed live streaming functions in their apps to enhance traffic.   Live streaming succeeded in grabbing the netizens’ attention. They spend much of their idle time watching live streams, on average 387 thousand hours on SinaWeibo live streaming platform every day. However, SinaWeibo does not offer the fastest live streaming service. Inke was established in May 2015 and became the biggest live streaming app within one year. Users who watch live streams can buy virtual gifts with real money and send these gifts to their favorite hosts. Regarding hosts, beyond advertisement income from third parties, live stream platforms typically share income with hosts. For instance, Inke usually collects 70% and leave 30% of revenues to hosts. Furthermore, Chinese users are also developing payment habits for these platforms. For instance, for the second largest live streaming App YY, the number of monthly paid users has grown 63.7% in three years.   Live streaming is now perceived as one of most potential industries in e-commerce. Once these hosts have accumulated a large number of followers on live platforms, it is possible for them to monetize traffic through different ways. They could even think about setting up business models similar to KOL e-commerce ones.

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