What Western Luxury Brands Risk When Partnering With Chinese Influencers

At 415 million hits, one of the most recently viewed topics on Weibo, China’s popular Twitter-like social media platform, was news that two of the country’s top livestream shopping hosts were ending their L’Oreal collaboration.

It all started when Li Jiaqi (a 29-year-old creator known for providing critical commentary on cosmetics to his 47 million Taobo livestream followers) and popular singing contest winner Viya (who has 92 million followers and rose to fame selling products from fashion apparel to houses) were tapped by L’Oreal to promote its products during Alibaba Group’s Singles’ Day shopping event.

The problem? Some followers brought to Li and Viya’s attention that the products they promoted could be purchased for less just a few days later on L’Oreal’s own platform. According to The Conversation, among the products they were each selling included specially priced batches of 50 L’Oreal masks for ¥429 ($67) though it came out after that the same deal was available to buy directly from L’Oreal for ¥258 ($40).

The influencers issued apologies but after L’Oréal didn’t immediately confirm it planned to compensate shoppers that felt misled, the influencers said they’d no longer showcase the company’s products and announced they were cutting ties with the company.

L’Oreal eventually apologized to customers, citing a “too complicated promotion mechanism.” At the suggestion of by Li and Viya, L’Oreal offered a coupon of ¥200 ($31) to consumers who spent more than ¥999 ($156) over the last 11 days in October on facial masks at the center of the dispute, redeemable for any L’Oreal products.

In an emailed statement, L’Oreal said:

“As already communicated by both top livestreamers, L’Oreal China and its partners have found a constructive and satisfactory solution to address the recent customer complaints in relation with [the] Singles Day promotion.”

The dispute points to the growing importance of influencers in luxury brands’ strategy to extend their reach beyond brick-and-mortar as well as the risk Western luxury brands run when partnering with influencers given they don’t have direct control over their behavior. 

According to EqualOcean, China’s livestreaming market is expected to be worth more than 80 billion renminbi, or $12.37 billion, in 2021, and on track to exceed 100 billion renminbi by 2023. The format rakes in big sales and viewership numbers, but not always big gains for brands.

L’Oreal had the opportunity to rack up major brand awareness points through Li and Viya’s millions of followers and the country’s massive group of young luxury brand consumers who potentially tuned in. Statista data from 2021 shows that around 31 percent of the total expenditure of surveyed Chinese luxury consumers who shopped between June 2020 and June 2021 were made by those aged between 26 and 31 years old.

Yet the L’Oreal partnership turned sour quickly and the brand failed to act swiftly to remedy the situation. For some consumers, an incident in which a brand appears dishonest would be hard to forget and push them to switch brands.

According to Edelman’s 2020 trust barometer brand trust report—which surveyed over 20,000 respondents from across 11 global markets—a growing number of Chinese consumers believe brands should have the interest of consumers at heart. When asked if they feel brand trust is more important today than in the past, 69 percent of Chinese consumers agreed that it is.

Western luxury brands also run the risk of offending Chinese consumers if their cultural norms aren’t respected throughout a partnership. For example, as noted by Samuel Kwok, associate professor of transdisciplinary studies at Xi’an Jiaotong Liverpool University, Cartier invites Chinese movie stars to its promotional events, describing them as “good friends” of the brand. In response, thousands of Chinese followers have left comments ridiculing Cartier for its “friend” word choice, according to Kwok. Why? Because Chinese consumers view the word “guest” as a more respectful term. This situation in particular highlights the importance of joining with local affiliate partners for international influencer campaigns.