Everyone Is Talking About "Blogger Commerce." What Kind of Business Is It, Really?

"When you run a WeChat official account, readers are clicks. Once you move into e-commerce, readers become ATMs" — is that really how it works?

"Jianjiao" — "Scissors" — is in South Korea. She is one of the hottest beauty streamers on Mogujie, the livestream e-commerce platform, and the "72-hour, 1,000-streamer battle" around Double 11 is the most lucrative stretch of her year. On the morning of November 10 she started broadcasting without a break, telling the "babies" in front of her camera which toner-and-lotion set suited dry skin and which one carried the steepest discount.

At midnight on November 12, Mogujie's "Selected Women's Wear Festival" closed, and the company immediately sent reporters a string of numbers: the 1,000-streamer battle Jianjiao took part in ran 18,309 hours of total broadcast time and drew 76.668 million minutes of viewing; sales from her room alone came to nearly 20 million yuan, and total sales were up 2,818% on the previous year's Double 11.

November is also the busiest month for Rebecca, when Double 11 and Black Friday land on top of each other. In the words of her manager, Tristan, from the National Day holiday in early October until now they have been "writing WeChat posts and doing customer service from the moment we open our eyes to the moment we close them."

Rebecca was an entertainment reporter at Southern Metropolis Daily. In October 2014 she started a WeChat official account, "Rebecca's Wonderland," writing about outfits and shopping. On January 11 this year the luxury division of BNP Paribas published a list called "Shopping Guide: Chinese Bloggers," and named Rebecca one of the ten top fashion bloggers. During Double 11 she got promotion requests from at least 17 brands. To show what Rebecca's promotion is worth, Tristan supplied a list that looked a lot like Mogujie's: a co-branded Shiseido gift box sold more than 8,000 units in five days; a Waterpik water flosser at just over 1,000 yuan apiece sold more than 1,500 units in a single day; more than 500 Bobbi Brown lipsticks went; conversion on SANDRO coupon recommendations ran as high as 30%; more than 700 Redline pieces sold at an average order value above 3,000 yuan, for sales of more than 2.5 million yuan.

Viewers, followers, conversion rate, average order value, sales. In fashion, these numbers have replaced the old, vague word "tone" as the measure of what a key opinion leader is worth.

One possible result: for a moment you cannot tell whether the content is the point, or the buying is.

1. Bloggers as a Source of Information, and as a Sales Channel

Talk about bloggers in this industry now and you will also hear about "the end of the traffic dividend," "the fragmentation of attention," and who counts as "top-tier." The first two are background noise familiar to anyone in investment and startup circles; the last is, as ever, an odd way of naming the people who matter most. Put plainly: the thinner attention gets spread, the harder people grab at whoever is most worth grabbing.

Hu Yue, 24, is one of Rebecca's readers, and has bought lipsticks, skincare, and other small things on her recommendations. She forwarded us a Rebecca post from WeChat, "A Walk-In Closet, a Corner Bathtub… My Dream Home Has Finally Come True," and said what draws her most is Rebecca's attitude to life: "I got up this morning, read her post about redoing her place, and decided to be someone who's upbeat and loves life."

Young, after a sense of authenticity, insistent on shared values — and all of it amplified on mobile social media because it sits within arm's reach. Brands and KOLs alike believe this is the ground on which young consumers are won.

That last point above all. According to Reuters Communications figures, the number of online shoppers in China grew from 240 million to 500 million over the past five years; 95% of millennials had not bought a print publication in the past year, but 72% had a "favorite KOL."

The scramble for the H&M x Erdem collection on November 2 is a good example. Erdem is not well known in China, but when Jane and Bridget opened the official site at 8 a.m. sharp to grab pieces, they found it had gone into "under maintenance" mode from the crush. When they got back on around 9 a.m., most styles were out of stock, and what was left came in odd sizes only.

Jane is 30, with an annual income between 250,000 and 300,000 yuan. Bridget is 26 and still a law master's student in the United States. The only thing they have in common is that both had seen posts from Gogoboi and Shiliupo Report the day before, which is where the idea of buying came from.

2. E-Commerce Built on Fashion Bloggers' Pull: More Noise Than Sales?

Marketing channels and sales channels do not always sit together. Rebecca's posts talk Hu Yue into wanting all sorts of things, and then she goes to Taobao to find a personal shopper reselling them. Liu Xiaoying, two years older, does the same — she reads a recommendation for Biotherm face cream or Estée Lauder eye cream, then turns around and searches Kaola, NetEase's cross-border shopping platform.

Putting together things that were never together: Yan Ming, founder of the startup LOOK, and Bai Ya, founder of Youzan, both see an opportunity there. LOOK and Youzan are technology platforms built for distribution. Sitting between merchants and suppliers, they handle e-commerce operations, supply-chain integration, and after-sales service.

The model has existed abroad for years. RewardStyle, founded in 2011, has tied up with more than 16,000 bloggers, over 4,000 e-commerce sites, and a million brands. A blogger posts a video or an article on a social platform and attaches a RewardStyle purchase link; when a shopper clicks through to a partner e-commerce page and buys, the blogger takes a commission.

RewardStyle makes its money from links across many social platforms. LOOK and Youzan have put their weight on WeChat instead. LOOK has shipped two products. The first is the LOOK app, which pulls together more than a hundred cross-border e-commerce sites plus recommendations written by bloggers and by its own team — what Yan Ming calls a "centralized product." The second is the Blogger Store, which opens a mini program storefront for a blogger inside WeChat. The blogger picks the goods; LOOK does the rest — engineering, supply-chain integration, logistics, and customer service.

The company now has exclusive deals with 40 fashion bloggers and large accounts, from "top-tier bloggers" such as Gogoboi, Shiliupo Report, and Freshboy to lifestyle media such as IDEAT China. Some of the stock comes from the 200-plus brands already on LOOK's platform, but a bigger share comes for now from cross-border e-commerce sites — Farfetch, Net-A-Porter, Revolve, W Concept — which work with LOOK to supply its contracted bloggers with 5,000 brands and 1.7 million products.

Gogoboi was the first blogger to sign with LOOK, and opened a mini program store, "Not-So-Big Picks," on his own WeChat account in June this year. Yan Ming says that since launch the blogger stores have grown more than 200% month over month, with total Double 11 online sales of 6 million yuan.

But "Lengmian" — "Cold Face," a pseudonym used at his request — an assistant to Youzan's CEO, thinks that in social-media commerce "fashion is still at the introductory stage. It will take time before sales reach any scale, however lively things look right now." At Youzan, the categories tagged as first-tier and top-performing are food, parenting, beauty, and autos; fashion is not among them. He offers an example: Rebecca has worked twice with the Palace Museum jewelry WeChat store, which runs on Youzan. By the store's own public figures, the 2018 planner sold 48,000 units for 3.168 million yuan; one bracelet from the collaboration sold 2,612 units for 1.56 million yuan.

In other words, fashion bloggers have only just started trying out WeChat stores, and have yet to put up sales numbers striking enough to matter. An industry figure who asked not to be named told QDaily, "Look at transaction volume across the whole internet — if you're not doing 500,000 orders and 20 million yuan a day, it doesn't even register."

Lengmian thinks the word-of-mouth nature of social commerce is exactly what keeps women's wear from taking off there. "Would you tell your best friend to buy the same outfit and risk turning up in it together? And with women's clothes, what people care about is the style, so they compare across many options, which takes an enormous base of merchandise. Taobao and Tmall are the right places for that."

3. Can the Blogger Business Scale?

"Fashion bloggers don't yet run themselves much like companies… How corporatized you are decides how well your team can fight together. If fashion bloggers want to speed up commercialization, they have to take the company route," Lengmian told QDaily. He thinks the bloggers now moving into e-commerce recommendations are genuinely torn. "How will followers take it? Will they buy? And if all you're doing is sending traffic somewhere else, how do you capture more of the profit?"

Leave aside groupings like LOOK — in fact some of the bloggers working with LOOK have visibly pulled back — and blogger e-commerce looks more like "a hobby that happens to pay."

This may be the common problem of every business model that hopes to turn content into sales. Chase profit and the content maker has to get bigger; even setting production capacity aside, getting bigger means widening the audience. The risk in widening the audience is whether the original core audience gets hurt, and whether there are even enough target buyers out there to widen into.

Amy follows Yu Xiaoge and has bought all kinds of skincare and hair products on her recommendations. Late last year Yu Xiaoge began "corporatizing": she built a standalone e-commerce app, "iDS Big Eyes," added a mini program in May, and published a post on her account recounting her road to commercialization — "My Blood-and-Tears Story: How a Dying Little Company Turned Itself Around and Made Ten Million Yuan a Month in Two Months."

Amy was not moved by the blood and tears. She does not like where Yu Xiaoge is now: "The posts feel like she's phoning it in, all they care about is pushing traffic to the app. When a blogger is selling a way of living, the scene is vivid, you can put yourself in it, and you want to buy. Once you can feel that an account's content is tied to its own financial interest, you stop wanting to."

Freshboy, whose name is Gao Bo, opened his WeChat official account in 2014. His contact with e-commerce began on Weibo: he signed with RewardStyle and posted commission-bearing purchase links there as photo-and-text recommendations. Then Weibo started policing outbound e-commerce links, and he cut back on that kind of sharing.

In September this year Freshboy worked with LOOK to open a mini program store, "Fresh Picks," inside his WeChat account SOFRESHTOWEAR. He had talked earlier with distribution-technology platforms such as Youzan and SEE, but felt none of them fit. "For a platform, all that matters is that the numbers move. What's being sold, who's on board — none of that matters, only the data does. Our numbers, the few of us at the top of fashion, may not even be as good as the beauty bloggers'."

"Not every blogger has to move product. The industry should be diverse, but right now the whole thing has been turned surreal. Bloggers are gods; if you want to sell something you go find a blogger, and that blogger has to sell. What really happens with ads that come with sales targets attached — go ask around. Some brands won't tell you the truth, of course. If their goods don't sell, that's embarrassing for the brand too, so it's better for both sides to cook up a big story: 'selling like crazy,' 'sold out in seconds.' Most people would rather not puncture that bubble." Some things in this market, Freshboy thinks, get exaggerated because the exaggeration is wanted.

On the night of November 15, Freshboy photographed the Fresh Picks back end and sent it to us. Two months after launch, the store had 1,549 orders in total, cumulative sales of 2.35 million yuan, 1,094 buyers, and an average order value of 1,518 yuan.

"When I sold my first 1 million yuan, the average order was a little over 1,000. Now it's 1,500, and I'm satisfied with that. I feel good about the brands and the audience I serve now — I just want to grow within the same category, not go down-market to get big. I wouldn't do that well anyway."

For now he is turning down investment. "To raise money you have to have found something that can't be done without burning cash — a real e-commerce operation that has to hold its own inventory, say. And a self-media account is still media; capital controlling media is a great evil. There's nothing wrong with a self-media account becoming a company. The real problem is that nobody cares where control sits. Your hands or someone else's, it makes no difference to them, as long as it gets bigger and makes more money. When you run a WeChat official account, readers are clicks. Once you move into e-commerce, readers become ATMs — something you use every trick you have to make click, comment, and buy."

4. Blogger Commerce Is Built on Trust, and Trust Is More Fragile Than You Think

Li Yang, general manager of RewardStyle's Asia office, believes the essence of content marketing is trust.

"One of the biggest marketing companies in China came to me and asked flat out: if I give you this much budget, how much money can you bring me? But they have one thing wrong. What makes people willing to pay for a blogger's recommendation is trust. A celebrity can endorse ten or twenty products; a blogger is genuinely helping me choose. If a blogger pushes something they think is no good, will their followers go on trusting them?"

Freshboy also raised the balance between an account's media side and its sales side. "Making content, posting frequency and clicks don't come first — only the quality of the content does. Taking ads, I only take brands and products I believe in, and only ads I can write something meaningful about. Doing e-commerce, I only think about the buyer's interest and experience."

In August this year he promoted Sunspel, a small British base-layer brand almost nobody in China had heard of, at around 500 yuan a piece; it sold 200 in the first two days. A Maison Margiela art wall decal at 3,625 yuan, introduced in September, sold ten or twenty pieces. "The newly rich won't buy something like this, because once you have it nobody can tell what brand it is. We also don't need a white-sneaker feature, because what our readers want to upgrade to is past the whole idea of white sneakers."

Li Yang finds that a lot of people misread the blogger business. Friends at brand companies ask him why bloggers doing e-commerce don't livestream, and whether livestreaming brings in a lot of money in the end. "That money looks far too easy to make, and much of it is fake data. Fake doesn't count. Consumers are very sharp, and opportunism only works in the short run."

Even setting opportunism aside, as more and more people write fashion blogs, standards will vary. And next to the big fashion-media groups, bloggers, as individuals on their own, may simply be more fragile. Before now they turned into models, editors, designers, brand spokespeople. On top of all that, they have now turned into salespeople.

To borrow a line from the fashion critic Robin Givhan, writing in New York magazine: "In fashion, the once-glittering disruptors keep moving closer to the vested interests. The distance between them was never great, because this is how the industry has always worked — it devours exactly what it loves and chases."

(Hu Yue, Jane, Bridget, Amy, and Liu Xiaoying are pseudonyms.)

The cover images show the Chinese blogger Gogoboi and the Italian blogger Chiara Ferragni, respectively.