As social media plays a more important role in web marketing, Shanghai-based YeDao Tech Inc., a fashion shopping app operator that focuses on the U.S. market, says it is working with U.S. social media stars to develop private-label fashion products.
“For Chinese influencers, e-commerce has become one of the major channels for making money.” Yedao’s founder and CEO Daniel Ma tells Internet Retailer. “However, U.S. social stars earn incomes mainly from advertising fees, and only a very small number of them land endorsement deals with top brands. Even for influencers with 10 million followers, their average annual advertising income is only about $100,000.”
By contrast, social media and e-commerce are much more closely tied in China. For example, Chinese influencers broadcasting live often utilize a push feature on livestreaming sites to send product information to followers’ screens. Their fans can purchase the products directly online while chatting with the social media personality.
Social media stars in China generated 58 billion yuan ($8.7 billion) in online sales last years, more than China’s 2016 movie box-office receipts of 44 billion yuan ($6.6 billion), according to a Chinese research firm CBNData.
Ma’s plan is to enable U.S. influencers to develop products with Chinese factories and sell them online to U.S. consumers via the Mode shopping app in a way that already is popular in China.
First, our designers and influencers will design the products together,” he says. “Then the influencer will promote the private-label products through her followers on social media platforms like Facebook, YouTube and Instagram and direct followers to shop on the Mode app. We will split the profit from the sales with the influencers.”
Mode says it has about 500,000 users for its English-language shopping app.
Cloe Breena, a 20-year-old fashion blogger who has more than 3 million followers of her CloeCouture channel on YouTube, is an example of a U.S. social media personality working with Mode. The Chinese company helped her develop her own brand of apparel and accessories for school, and U.S. consumers have purchased 7,000 of her bags on Mode in a month, according to Ma. Breena did not immediately respond to a request for comment.
To minimize risk, Mode takes orders in advance for products and only produces those that generate enough demand to make them profitable, Ma says. “We also provide some exciting products for influencers to select,” he says. “Bloggers do not need to pay anything and our design and production team supports them through the whole process.”
Ma didn’t break out Mode’s monthly sales, but he says the average ticket on Mode is about $40 and usually each presale generates about 4 million yuan ($600,000) in orders. 500 U.S. social media influencers and 30 Chinese factories work with Mode today, and Ma says he hopes to attract another 100 social celebrities this year.