E-Commerce Development In “Internet Celebrity” (Wanghong) Economy

Yiran Zhang
Nov 28, 2017 · 3 min read

Weibo, with similar function as Twitter, is one of the largest social media platform in China. In 2017, Weibo has 340 billion monthly active users, at a 30 percent increase comparing to last year. With the expansion of social media and mobile internet, a new term, “internet celebrity” has come out to describe fashion influencers who post their lifestyle, makeup tutorials etc. on social media like Weibo. Such celebs, with good appearance, nice taste and personalities gathers social attention in the platform and develop a huge number of fans and followers. From the year 2016 to 2017, there is a 57.4% increase in the number of celebrities that has more than 100k followers in Weibo, where the number of fans of these online celebrities raised from 390 million to 470 million.

In the recent 2 years, new type of economy that stems from online celebs, named “internet celebrity economy” has arisen. Online celebs are able to make money out of their fans by developing their own clothing and beauty brands and companies, using social media e.g. Weibo as a platform to advertise and sell their products. Such internet celebrities are now taking over the traditional e-commerce industry and innovating into a “celebrity driven” online retail business, with their fans and followers being their main targeting customers and make enormous profit based on their popularities.

How fashionistas in China build their fan bases:

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Zhang Dayi, the 29 years old who has 5.6 million of followers on Weibo, is a fashion entrepreneur and one of the most famous online celebrities in China. Zhang established her own online fashion brand in 2014, which the shop became one of 10 top selling shops in Taobao in 2016, with annual revenue of 46 million dollars.

The success of “internet celebrity” online retailing industry came with reasons. Celebrities are playing a role as key opinion leaders on online retailing. The multimedia platform allows celebrities to promote and advertise their product by posting pictures, videos or livestream. Fans get better customer experience as they can freely comment and express their opinions. Another reason behind would be the innovation in Supply Chain management. Unlike the normal supply chain for online retails, online celebs post pictures of their sample clothes on social media before actual production of the clothes. After interacting and asking for the willingness to buy from their customer, the celebrity would then pick the clothes with better feedback and put into large scale production. Both product cycle and fixed cost for stock are reduced, providing the business with sufficient cash flow.

Tough the industry is very young, it is seeking to transform. The social media platform, Weibo, are planning to provide professional data analysis service for these celebrities. By analysing data that generated by the online celebrities, Weibo aims to support them and provide strategic advice, such as maximisation of influence and expand customer base(followers). The service is still under preparation and we will look forward to see how data would help the development of the “internet celebrity” business in the future.

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