Online marketing in China is different from any other place in the world. Cost-per-click or CPM ads play a smaller parts in the advertising mix. Instead, influencers are an essential marketing tool in China. Small influencers (Key Opinion Customers or KOCs) are particularly essential. Let’s learn how to leverage KOCs to boost your business in China.

Livestreaming campaigns

Live-streaming campaigns are the most direct approach to work with Red influencers to generate sales.

Requirements

• Your brand must have an official Red account and access to the PGY platform
• The influencer you are working with must have at least 1,000 followers
• For sales in livestream, your brand must also have an in-App Red Store

How much do they cost ?

Livestreaming campaigns are charged based on a commission on revenue (ranging from 5% to 25%)

Commission Fee = (GMV- Refund) x Commission rate

• 80% of the commission is charged by the influencer
• 20% of the commission is charged by the platform (Red)

How to launch a Red Live-streaming campaign

1. Log in
   Use your brand’s Xiaohongshu account to access the PGY platform. (https://pgy.xiaohongshu.com/)
   
2. Choose a KOL
   Browse and select the right influencer based on their profile and performance data.

3. Send Invitation
   Initiate a collaboration by sending an invite directly through the platform.
   
4. Set Livestream Commission
   Define and input the commission amount or fee for the KOL. Normally, the brand will set up 5% – 25% commission for KOLs
   
5. Place Order & Collaborate
   Confirm the collaboration and complete the order for the livestream session.
   
6. Track Campaign Data
   Monitor performance and sales metrics in real time through the platform’s dashboard.

A case study of Red Livestreaming : Ralph Lauren

Ralph Lauren cooperated with Top KOL Darrrrcy. The campaign generated 80+ orders with 36k+ RMB GMV. The estimated refund rate was around 30%, and estimated commission rate was 25%. Then,

• Net Sales = 36,000*(1-30%) = 25,200 RMB
• Commission Fee = 25,200*25% = 6,300 RMB
• Revenue = 25,200 – 6,300 = 18,900 RMB

Unfortunately, this case study highlights the high refund-rate for Red campaigns. However, as the commission is not applied to these refunds, they don’t impact campaign cost besides potential logistics costs (though many of these refunds might happen before the products are sent out).

Key Opinion Customers

Key Opinion Customers are small influencers with less than 1,000 followers. They can be essential in building an impression of consensus for your brand through repeated exposure. There are two main tools to leverage KOC’s content via Xiaohongshu: KoubeiTong and Collaboration Codes.

KoubeiTong (口碑通)

KoubeiTong (口碑通) is a tool that amplifies high-quality UGC posts officially recognized by the platform. Red tends to consider posts as high-quality if they feature major brands, so this tool might be harder to use for smaller brands.

• Pros:
  • Easily check the KOC content related to brands 
  • Amplifies top-performing, platform-approved content. Ideal for quick reach and strong engagement in short timeframes.
• Cons
  • You need to contact RED Sales to apply for this tool. Requires larger budgets and more brand experience on Xiaohongshu. Best suited for established players.
  • Focuses on UGC posts pre-selected by the platform. This limits the pool of available posts for promotion 

Xiaomi: a KoubeiTong case study

The electronics brand Xiaomi used KoubeiTong to promote their products. They reported impressive improvements in metrics compared to their regular ads/online marketing:

• -50% decrease in CPC (Cost per Click)
• -60% decrease in CPE (Cost per Engagement)

Collaboration Codes (合作码)

Collaboration Codes (合作码) are a low-barrier solution that empowers small-scale creators (under 1,000 followers) to participate in brand campaigns through verified original posts. Here brands have to proactively contact Key Opinion Customers to get a collaboration code.

Once the code is obtained, it will enable the brand to run an “official” campaign with the KOC, which will make sure the post gets maximal exposure and can be boosted via ads budget.

• Pros:
  • Low-cost, easy-entry tool especially beneficial for SMEs and emerging brands. Though still in beta, it’s poised for broad adoption.
  • Covers a wider creator base, allowing brands to reach the suitable content directly
• Cons:
  • Need to wait for the KOC’s replies and get the code. High Labor cost.

Conclusion

In China, working with influencers is not as easy as just contacting an influencer and running a campaign. Campaigns need to be whitelisted by Red to get exposure and so they can be boosted with ads. Depending on the size of influencers and the type of campaigns you want to run, it is important to pick the appropriate tool in Red’s toolbox to get maximal exposure.