Has COVID-19 Has Hurt China’s KOLs? The answer is No.

The COVID-19 has had a massive negative impact on the KOLs marketing industry from a monetization standpoint. Income sources are gone, and most brand deals have been canceled or delayed several months. For those KOLs who run their own brands, manufacturing and logistics have been shut down or are moving very slowly.

But this is all temporary, and it’s highly likely that the industry will experience a massive rebound in late Q2 or early Q3. KOLs that don’t solely rely on their career as an KOLs or are large enough to have savings or investments will come out on top. MCNs that rely heavily on advertising income will struggle.

Monetization is dramatically down, but from a content standpoint, this is a boom period for many KOLs. Online traffic has increased dramatically, and consumers are bored and eager to explore and engage. KOLs focusing on fitness,cooking, and comedy are experiencing the most growth.

Below are some detailed reasons why the industry is hurting —along with some reasons why it’s thriving — during this tense time.

Brand deals canceled or postponed

KOLs in China primarily monetize their work through brand campaigns or selling their own branded products, but both of those are difficult right now.

Several KOLs have shared that their Q1 brand campaigns have all been postponed — many until as late as May. While this is a big blow to their earnings, they will likely make it all back later in the year if they can hold out until then. But the top KOLs aren’t too concerned. The popular WeChat account “GQ实验室” says that there are even some positive aspects to this unfortunate moment. For instance, publishing fewer commercial articles gives KOLs a much-needed opportunity to create more and better editorial content.

According to several Chinese marketing media outlets, the advertising industry is expected to begin recovering in late Q2, but it likely won’t be back to normal until June’s 618 shopping festival. Therefore, experts are predicting that Q3 will be a boom period for marketing companies. With those businesses wanting to make up for lost time, top accounts might even find it hard to schedule all their ads.

Live-stream Viewership is booming, but issues exist

With consumers confined to their homes, commercial live-streaming has been booming. Top Taobao live-streamer Li Jaiqi (李佳琪) took a break from streaming over the Spring Festival period, but his first stream upon his return on February 10 drew over 16 million viewers. Items were selling out before he could even finish. Followers complained that they couldn’t purchase items fast enough, and even one of China’s most famous actresses Zhang Ziyi (章子怡) watched the stream and left a comment under Li’s Weibo post asking how to buy the products since they sold out so quickly.

However, while live-streaming viewership is booming and consumer purchasing power is still strong, streamers are facing two massive issues: a lack of stock and delayed logistics. They’re selling whatever they can get their hands on, and even new or in-stock items are being sold as pre-sale with the caveat that they’ll be shipped as soon as possible.

Increased viewership/followers and high levels of engagement

Although many KOLs are currently losing money, many are simultaneously experiencing huge gains in viewership and engagement. Chinese New Year is typically a peak season for video apps as people have more free time to kill, but this year, viewership was magnified with people confined to their homes for weeks on end because of the virus.

One report found that 574 accounts on the popular video platforms Douyin and Kuaishou each gained between 100k-500k new followers between January 20 and February 2. The report shared that governmental organization and state-run media accounts experienced the most growth on both platforms because people were using these accounts to follow the latest virus updates.Following those were comedy, gaming, food, and celebrity videos.

This year’s follower growth is even crazier — partly because people are staying at home and have more time to learn how to cook but also because Douyin itself is now supporting cooking-related content. On February 9, Douyin started a challenge called “Tasty Food Challenge” (美食趣味计划), and as of the end of February, the Challenge had over 10.3 billion views, with most participants between the ages of 24 and 30.

Since it’s highly likely that the KOL industry will experience a massive rebound in late Q2 or early Q3, brands should consider preparing in advance.

Contact us, a professional China Marketing Agency for Chinese KOL Marketing Strategies.