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If you ask someone from Generation Y — more known as millennials — what they’re aspired to be growing up, you are more likely to hear answers involving occupations like doctors, engineers, or lawyers. However, ask people from Generation Z, and you will be surprised by how many of them mention social media influencer.

Why are more people pursuing this career path? Simple. They get paid to do something that they already love to do on a daily basis: posting on social media.

An influencer, someone with a substantial number of followers on social media, can generate a paycheck in the range of from US$124 to US$1,405 for one sponsored post, depending on the follower count.

How come a social media post worth that much? Moreover, why are so many brands willing to invest time and money in influencer marketing? 

The Influence of Social Media

One reason why influencer marketing becomes a powerful marketing tool is that influencers understand what today’s consumers want. Many of these influencers are regular people that gained their followers by curating contents that resonate with many people — earning them the power to influence their audience’s opinion and are more likely to be trusted by consumers.

Tofugear found that 55% of Gen Z consumers bought products due to the content shared by influencers. TBWA\Hakuhodo’s chief creative officer and executive creative director, Kazoo Sato, explained the phenomenon.

Influencers brings an entirely different perspective from ad agency creators. He understands what creates buzz for the smart-phone obsessed generation, and we intend to leverage this sensibility and perspective to involve brands in culture.

As a result, they’re able to devise contents that appeal to the brand’s target customers.

It’s also worth noting that influencers usually have their own niche and have followers that are interested in the same group, allowing brands to target the right audience effectively. Markerly found that those with fewer followers have higher engagement rates, most likely because the audience is interested in the product or the topic the influencer is advocating rather than just being fans of the influencer.

Figure 1: Instagram accounts with fewer followers have higher engagement rates; Markerly

In a region where social media is highly popular like Southeast Asia, where 55% of the population (around 360 million people) are avid social media users, it’s become more critical for brands to gain relevancy among their consumers in this platform.

Figure 2: Social media users in Southeast Asia account for only 55% of the entire region’s population; Hootsuite, We Are Social

Thanks to social media exposure, younger consumers also have an easier time connecting with the other consumers online and trust their opinion more than the ‘official’ brand channels or traditional media, because these people have experienced using it or are experts in the specific field.

The rise of social media usage has also raised the popularity of social commerce in this region. According to PayPal, 80% of Asian merchants use social media to sell online. The number is even higher for the three largest Southeast Asian countries. Thailand recorded the highest percentage of merchants using social commerce at 95%, followed by 87% of Philippines merchants, and 80% of Indonesian merchants.

Figure 3: Social commerce is popular among Asian merchants; PayPal

Case Study: Building a $1 Billion Business through Instagram

One of the most successful examples of influencer marketing is Daniel Wellington (DW), a Swedish watch company established in 2011. During its initial conception, DW is famous for leveraging several smaller influencers on Instagram to promote their product instead of choosing a celebrity to gain the same ‘viral’ effect with lower cost. 

By contacting many of these smaller influencers to post images of them wearing the DW watch in exchange for a free watch, the brand manages to invoke public curiosity and place their products in the eyes of potential customers and have the images speak for itself.

Figure 4: A Daniel Wellington Instagram post by Thai influence bikwansr; Bikwans’ Instagram

The result? Almost 4,700% revenue growth in the three years leading to 2015.

An effect to this extent won’t be as easy to achieve now as it did before as more brands are utilizing Instagram as their marketing channel and the platform has since set up posting guidelines to make it more transparent for users to see whether or not an advertiser sponsors a post. Still, it’s evident how powerful influencer marketing is when done right.

The Key to Influencing

There isn’t one right answer on how to choose the right influencer(s) for brands. However, there are some key rules brands should keep in mind when doing influencer marketing.

1. Alignment with Brand’s Audience

Know your audience. Enlist the influencer that has the same audience as your brand or product is targeting to, to ensure your message falls into the right ears and maximize the promotional effectiveness. One of the brands that did a good job with this was Lenovo.

Brief: To promote its new product line of YOGA 3 Pro and YOGA Tablet 2 Pro computers, Lenovo hired influencers, bloggers, and YouTubers to advertise their product on their platform using images, videos, and blogs that detailed their day using the product and promoted a giveaway. One of the influencers that were chosen was Kileen, a Dallas software developer and fashion blogger that works full time and has two kids.

The rationale behind this influencer: As a mom and fashion and beauty blogger, Kileen’s audiences are active, fashion-conscious women who are interested in fashion or lifestyle products. This match with Lenovo’s target, which wanted to position their YOGA 3 Pro and YOGA Tablet 2 Pro computers as a product that can be used daily for all kind of consumers, including active women.

Result: Although the blog post was only able to attract 62 comments, with other posts from other influencers, the campaign was able to garner 51 million social impressions and rank number eight as trending national topic in the US on Twitter. The giveaway also attracted over 61,000 entries.

Figure 5: A blog post by fashion and beauty blogger Kileen regarding Lenovo YOGA Pro 3; Kileen’s blog

2. The Influencer’s Engagement Rate

Brands should also take into account an influencer’s capability on engaging the audience and whether or not they’re someone your target audience can relate to and trust on, just like what Clinique did.

Brief: To promote better skin care routine among Men audience in general and introduce their new product line for men, Clinique for Men, the cosmetics and skincare brand partnered with 37 influencers from numerous fields, including stylists, filmmakers, lifestyle bloggers, and outdoorsmen. One of the influencers it worked with was Mikey de Temple, a surfer, photographer, and filmmaker from New York.  

The rationale behind this influencer: By partnering with someone unrelated to the fashion industry and more known for his professional works, Clinique was able to display how its new product line is used by regular people as a part of their daily activities.

Result: Despite his post only acquiring 748 likes (around 2.68% engagement rate), the campaign from the 37 influencers was able to garner an engagement rate of 3%, or 3.8 times higher than the post from Clinique’s official Instagram account. The campaign was also able to achieve 2.4 million impressions and over 67,000 interactions.

Figure 6: An Instagram post by surfer, filmmaker, and photographer Mikey de Temple to promote Clinique for Men; mikeydetemple’s Instagram

3. Do Homework on the Influencers

When choosing the influencers, it’s also important to see the history of their professional works to be able to judge their integrity and make sure all parties involved can able to meet all contractual obligations to prevent any future problems. Sadly, many brands failed to do this when they hired Instagram influencer and local photographer Daryl Aiden Yow.

Brief: Numerous big brands like Reebok, Dyson, Uniqlo, and Sony had hired Singaporean photographer and Instagram influencer Daryl Aiden Yow to promote their products on his Instagram platform. However, Mothership.SG exposed how he had been using stock photos from websites like Shutterstock and Pinterest and photoshopping himself in the images to promote their brands. Critically, Mustsharenews claimed that Yow had done this with the brands’ full awareness and approval.

The rationale behind this influencer: With Daryl Aiden Yow’s reputation as a photographer and his production of high-quality images, having him promote products on social media would show how picturesque and good the products are to his 115,000 Instagram followers.

Result: Post the expose, many individuals like APD’s Tim Sharp and Singaporean influencer Wendy Cheng and brands like Scoot and F&N Seasons have slammed both Yow and the brands. This not only damaged his reputation as an influencer but also brought down numerous brands’ name, resulting in contract termination from brands such as Sony and Issey Miyake.  

Figure 7: The number of Instagram posts on Yow’s channel drastically decreased from 1165 posts to 42 posts; darylaiden’s Instagram

Influencer marketing is an effective way to directly reach and attract your target audience without needing to spend millions of dollars on advertisements. However, like any other best marketing practices, personalization is needed when choosing these influencers to make sure you reach the highest level of engagement and in turn, your conversion rate.

THE BACKGROUND

Anyone that has ever logged into Instagram has probably encountered at least one picture featuring a minimalist watch with a NATO strap and trademark ‘DW’ on the dial.

Daniel Wellington Instagram

The classic rose gold-tone watch with the stripes NATO strape

In the six years after its inception in 2011, the relatively young Swedish watch brand Daniel Wellington (DW) has successfully become one of the world’s best-selling watch brands under the $200 price range.

DW was inspired when the founder Filip Tysander met a British man with “impeccable yet unpretentious style” during his travels in Australia. Tysander was inspired to create his own line of watches after seeing the man’s pairing of a vintage Rolex Submariner with an old, weathered NATO strap.

Within three years after its launch, DW sold one million watches worth $70 million and the company is now worth over $200 million.

It is also the fastest growing private company in Europe — recording 4,700% growth in revenue between 2013 and 2015.

What factor contributes to its massive success?

It is almost single-handedly owed to the company’s Instagram strategy.

THE CHALLENGES

Coming from the Gen Y millennial generation himself, Tysander knew personally the pain of finding an affordable minimalist watch as most companies charge a premium for the style.

“I thought there was also something missing in watch design, when it comes to watch that is slim, thin, and minimalistics, that you can wear together with a suit, that is not that expensive,” Tysander said about the opportunity he saw in the watch industry.

So how does one make an affordable stylish watch without looking cheap? On top of that, how does a brand create an identity that millennials want to be associated with?

THE STRATEGY

The company picked a perfect time to start its business, a period right after the economy recovered from the 2008 financial crisis and profits in the watch industry jumped from $3.7 billion in 2009 to $5 billion in 2014.

Tysander also noticed a classic trend in fashion hadn’t yet made it to the watch world – the preppy style so he drew inspiration from Ralph Lauren to match his new NATO straps.

To keep price points relatively low, the company manufactures and assembles its parts in China but the brand maintains a certain level of quality by sourcing the time-keeping parts from Miyota, a Japanese supplier known for its good quality-to-cost ratio.

“Our watches are inspired by the upper echelons of the watch world but at a very accessible price point. It’s fair to say that we want everyone to be able to own a Daniel Wellington,” said Frans Sjo, DW’s business manager for the US.

Indeed, the brand has made it very easy for people to purchase a Daniel Wellington watch by partnering with over 6,000 retailers in 75 countries.

The company also sells its products online, offering free worldwide shipping and returns on not only its official website but also distributing its timepieces in Southeast Asia through popular marketplace Lazada.

Daniel Wellington Instagram

Daniel Wellington ecommerce website with free worldwide shipping

Unlike other upscale brands that are bound by guidelines and can only sell their products in certain boutiques, DW partners with any retailer that will have them – department store, boutique, standalone, etc.

While its omnipresent channel distribution is impressive, the company’s most notable strength is its marketing. The company refused to spend on traditional advertising and turns instead to social media to reach potential consumers.

In its early days, DW gave watches to key influencers on Instagram so they could show it off to their thousands of followers. But the company didn’t choose celebrity endorsers and started with the several smaller influencers to achieve the same “viral” effect at a cheaper cost.

Daniel Wellington Instagram

The company curates its Instagram feed with pictures from customers around the world.

DW has also curated a very stylish Instagram profile itself as a fashion brand and has successfully garnered 3.2 million followers. It also leverages user-generated content (UGC) to engage its customers and drive brand loyalty by featuring user posts with hashtag #DanielWellington.

Daniel Wellington has succeeded in lowering its product’s base cost, and consequently the retail price, while branding itself to be a stylish and desirable brand to a wide demographic.

THE FUTURE

Having excelled in an online channel strategy, DW is now looking to expand its offline footprint to further expand the business.

The company is planning to open 300 flagship stores worldwide within a year, ten times of what the company had at the beginning of 2017. At least 100 of them are planned to open in China.

To increase global recognition (and now that DW has the money), the brand has appointed Kendall Jenner to be its brand ambassador to launch its Classic Petite collection — the company’s first mesh band watch.

Daniel Wellington Instagram

Kendal Jenner is the face of the company’s Classic Petite collection launched March this year.a

“If you go back to 2013, I had no idea the company had the potential to grow to its current size, but today it’s part of my everyday life. I’m incredibly fortunate,” said Tysander in an interview.

With $66 million profit all for himself? No doubt.

Instagram celebrated the first anniversary of IG Stories earlier this month. In one year, the platform has become one of the most important online channels for brands to reach customers as more than 70% of IG users follow a brand page and 22% of shoppers have regularly used Instagram to browse products.

With 250 million daily active users, Instagram Stories has become a new favourite tool for marketers as half of the businesses on the social channel have produced a story in the last month alone.

Its appeal comes from the contrast of Instagram’s two functions; the polished image shots and the “raw” side of the capture process.

“Within the same platform now we’ve got this lovely juxtaposition that allows you to tell a richer story, but maybe [providing] a more authentic, or more earthy experience alongside the more polished core visuals,” said Hugh Pile, CMO L’Oreal Western Europe.

Instagram Stories Brands

L’Oreal’s post on Instagram Stories

However, with so many advertising channels now available to brands, it is important to know what is the right content to produce on Instagram Stories for success.

The path to conversions

There are five main categories of activity that brands can encourage users to do with the feature in the ads for Instagram Stories, but shopping is the most popular objective for brands as 59% of the ads Stories produced since its launch in March linked to a page where the products featured in the ads were available online.
Instagram Stories Brands

 

“Instagram has integrated ecommerce handoff technology into Stories, namely swipe-up links leading to brand sites, linked influencer tags, and checkout buttons that support brand efforts to move beyond engagement metrics and render their live video content shoppable.” – L2

Brands also use Stories as a gateway or teaser to drive traffic to more elaborate content on platforms like Youtube or Facebook where shareability and engagement are more likely with the user.

Product promotion is still the most popular type of content in Stories, which accounted for 36% of content produced by brands, followed by ‘behind-the-scene’ pieces, and influencer endorsement.

Instagram Stories Brands

Video has also increasingly become a more effective media format that drives online shopping – 34% of Indonesian youth were influenced by video ads to shop online.

With more tools available for brands to engage consumers, especially in a market like Southeast Asia where online marketing channels are dominantly Google and Facebook, it’s time for brands to get more creative.

Here’s what you should know:

1. Indonesia is the largest Instagram users in APAC

Instagram claims it records more than 45 million active users every month in Indonesia and a user growth of more than 100% since last year, from 22 million in early 2016 to 45 million as of July 2017.

Instagram has 700 million active users globally and Indonesia is one of its most exciting markets with the most active users for ‘Instagram story’ feature, using it twice more frequently than the average user. The company also has the largest Instagram community in Asia Pasific.

 However, Facebook remains the most favored social media platform for Indonesians, where it is also the biggest Facebook users in Southeast Asia.

Read the full story here.

2. Walmart and JD.com launch an omni-channel shopping festival

Walmart and JD.com aim to intensify integration of bricks-and-mortar stores with ecommerce platforms through their launch of a new omni-channel shopping festival on August 8 in Mainland China.

The event will be supported by their expanded cooperation to combine domestic supply chains, operating platforms and customer resources.

The JD-Walmart 8.8 shopping festival is expected to help Walmart extend its reach to the 99% of the country’s population covered by JD.com’s delivery network.

With their combined resources, the two firms could “define the future of retail in China”, said Carol Fung, the president for fast moving consumer goods at JD.com

Read the full story here

3. Malaysia Digital Economy Corporation will launch ecommerce academy

Malaysia Digital Economy Corporation (MDEC) chief executive officer Datuk Yasmin Mahmood said an ecommerce academy tailored to the industry would be launched later this year.

The initiative is important as Malaysian retail industry is the largest segment within the small and medium enterprises’ (SMEs) market. She was heartened by the growth of Malaysian SMEs’ online presence to 26% last year from 7% in 2014.

The Internet is also disrupting business models that rely on the ownership and control of physical infrastructure.

“Digital innovation is an opportunity first and foremost, but also a threat if not embraced,” she added.

Read the full story here

Here’s what you should know today.

1. Instagram’s direct-response Story ads are available for self-serve buys

Ads within Instagram’s Stories feed can prompt people to swipe up to visit a brand’s site or install its mobile app.

Instagram has officially started selling ads that can appear within people’s Stories feed and link to a brand’s site or app-install page in Apple’s or Google’s app stores.

Coinciding with the rollout of swipeable ads in the Stories feed — which is viewed by more than 200 million people daily — Instagram now lets advertisers set objectives for these ads, like whether a brand wants people to view the video, visit a website, install an app or complete a specified conversion event, for example, adding a product to a shopping cart on a brand’s ecommerce site.

The direct-response ads aren’t much different from the version that Instagram added to Stories in January. Brands can feature a single vertical photo or a vertical video that’s up to 15 seconds long as their ad, and they can target the ads using Facebook’s standard ad-targeting options, like people’s age, gender, location, interests and purchase history.

This could be very effective in Southeast Asia, considering how popular social commerce is in the region.

Read the rest of the story here.

 

2. Is Walmart’s new last-mile delivery program brilliant?

Walmart announced earlier this month that it was testing a new delivery method — one that has store associates making deliveries on their way home from work.

While the program is currently being tested at three stores — two in New Jersey and one in Arkansas — the system is an example of how multichannel merchants can further leverage their installed store base to compete with Amazon, its network of distribution centers, and a growing fleet of delivery options.

At a time when so many retailers have been closing their physical presence, this type of out-of-the box thinking needs to happen more with retailers. This empowers employees to make a difference that can count in supporting the company and their important roles. What else are retail experts saying?

Read the rest of the story here.

 

3. Why would Sea do its IPO in New York?

Sea Ltd, Southeast Asia’s most valuable start-up, is prepping for a US$1 billion initial public offering in the United States, a move that would be a major pivot for Southeast Asia’s rapidly expanding tech industry.

“For Southeast Asian tech firms, an overseas listing of this purported scale brings increased investor confidence in the region,” said Adrian Lee, research director at advisory and research firm Gartner.

The downside, however, is that a high-profile IPO such as Sea’s could “create pressure to satisfy overseas shareholders and dilute the focus on building up the core business in Southeast Asia”, Gartner’s Lee said.

Analysts and industry players argue that a listing in the US is the right strategy for Sea as bourses like Nasdaq are considered the best reference for technology IPOs.

“There is no better place to raise the kind of financing Sea requires than New York City, and that’s the simple truth,” said Justin Hall, principal at Southeast Asia-focused VC firm Golden Gate Ventures.

Read the rest of the story here.

 

4. Recommended Reading: The rise and fall and rise of beauty subscription boxes

With every Tom, Dick and, yes, Trump getting into the subscription box business, packaging and mailing curated goods to people on a monthly or quarterly basis sure seems like the big thing to do — which is surprising, considering that for a while there, the signs were pointing to the category reaching busting-bubble status, at least in the beauty industry.

Thanks to a few course-correcting changes, Birchbox managed to make some tweaks to offset its dip in new subscribers by modifying the brand’s loyalty program, focusing on Ecommerce sales, renegotiating contracts with some vendors to get shipping and printing costs down and reducing operating expenses.

“We had to shift gears quickly because we needed to prioritize profitability and take control, that was a great opportunity for us to press reset, dial a lot of things back,” says Katia Beauchamp, the company’s CEO.

Read the rest of the story here.

Here’s what you need to know today.

1. B2B platform Bizzy acquires small startup, replaces CEO

Indonesian ecommerce company Bizzy has acquired a startup called Alpha. The terms of the deal weren’t disclosed.

Bizzy supplies other businesses with office equipment, electronics and stationery in bulk. The little-known startup Alpha has expertise in things like raw materials and spare parts, making it valuable to Bizzy’s business.

Post-acquisition, Alpha’s CEO Andrew Mawikere will become Bizzy’s new CEO.

Bizzy’s former CEO, Peter Goldsworthy, will take on a new role as Bizzy’s president.

The acquisition will see Bizzy make way into new markets with direct materials and services relating to spare parts, adding to its capabilities of supplying office necessities.

Read the rest of the story here.

eIQ published a guest post by Hermawan Sutanto, Chief Commercial Officer at Bizzy Indonesia in November 2016. To read his insights on Southeast Asia’s B2B ecommerce landscape, click here.

 

2. Tencent zones in on Southeast Asia, invests in karaoke app Smule

Smule, maker of music and karaoke apps, has secured US$54 million in a round of funding led by Tencent.

Tencent is zoning in on Southeast Asia for new opportunities across the fast-growing region. Thailand is a primary focus, illustrated by the company’s joint venture with e-book platform, Ookbee at the start of this year.

Read the rest of the story here

 

3. Instagram launches mobile web sharing to pursue global growth

In pursuit of international growth where networks are slow and data is expensive, Instagram has given its mobile website a massive upgrade that adds core features of the main app, including photo sharing and a lightweight version of the Explore tab.

 The mobile web launch ties in with Instagram’s global growth strategy aimed at the 80% of its users outside the US. Other product updates in this vein include web sign-up, a better on-boarding flow for low-end Android users, and the recent addition of offline functionality.

This could benefit users in Southeast Asia, where social commerce counts for a significant portion of ecommerce sales, especially in Thailand, a country with over 7.8 million Instagram users.

Read the rest of the story here.