Influencer marketing is booming in China. The country’s influencer economy this year is estimated to be equivalent to $17.16 billion, double its size in 2016, according to big data firm CBNData.

It’s hard not to be awestruck by the size of that market. For young consumers, it's inspirational. A recent survey conducted by internet giant Tencent found that 54% of college-age respondents in the country chose “online celebrity” (a synonym of “influencer”) as their first career choice. It’s not difficult to see why, given the potentially lucrative financial returns, fans and free products—all in exchange for what seems like easy work.

The word “influencer” as it is used in China is broad and applies to people who are bloggers, online content creators, vloggers and live streamers, as well as traditional celebrities. China has its own terminology to refer to an influencer marketing practitioner: key opinion leader (KOL) or “wanghong,” which is the romanization of the Mandarin pronunciation for “online celebrity.”

An industry of “wanghong incubators” or “KOL academies” is thriving to meet the flood of KOL aspirants. Some incubators span the entire supply chain, handling people’s careers much like a talent agency would. Incubators start with talent discovery and development, and then move that talent into content creation and beyond, including production of products and logistics. Top-notch KOLs may get a full production team devoted to them.

It’s difficult to get an exact count of how many of these academies are operating, but Kim Leitzes, founder and CEO of Parklu, told The Business of Fashion in June 2018 that at least 200 KOL incubators have popped up in the country.

eMarketer’s latest report, “Influencer Marketing in China: What You Need to Know About KOLs, Wanghongs and the Platforms They Use,” looks at how this marketing tactic has become so prevalent and how marketers have deployed influencer campaigns.

Some marketers deploying influencer campaigns use KOL and wanghong interchangeably. It’s not always clear-cut which they mean, but there are some important distinctions. KOLs have developed expertise on a topic and have created relationships with their audience over an extended period. Wanghongs became famous because of an internet presence, but their opinions may not necessarily be trusted as expert in relation to the products being hawked. That leads some KOLs to take offense when they are referred to as wanghongs.

“It’s worth noting that celebrities aren’t always KOLs—they may be very well-known, but what they say may not hold a huge amount of clout with the target market, particularly when dealing with specific niches or more sophisticated consumers,” said Mark Tanner, founder and managing director of consultancy China Skinny.

And the opinions of these social media stars are swaying where today’s consumers in China shop and what they buy. According to a study released in May 2018 by consulting firm A.T. Kearney, receptiveness to brand recommendations by celebrities (78%) and online celebrities (63%) among social media users in China ranked higher than in any country surveyed.

A number of factors, including the popularity of digital media (social media, online shopping and digital video) among young people and a mobile-first populace, have helped facilitate the rise of the influencer economy.

On the demand side, a fast-growing economy transitioning into a consumption-based economy coupled with a rapidly rising middle class have helped increase the demand for a way to discern quality products and services.

In China, the millennial and Gen Z generations are driving consumption, and their free-spending habits are well-documented. These groups were raised under China’s one-child policy, and frequently their financial support is provided by parents and often two sets of grandparents. They tend to value self-expression and individuality. These new consumers seemingly have an endless appetite for branded experience and look to social media for inspiration. Marketers have come to believe that influencers are conduits to them.

On the supply side, China’s huge manufacturing base is churning out countless homegrown products. No longer satisfied with just making products for other markets, domestic players in the thousands are eager to build their own brands. And influencers are helping them get their messages out in a crowded marketplace.

Not sure if your company subscribes? Find out more.