Wuzhong (China), November 24: French cosmetics giant L’Oréal suffered a huge retail crisis in China after two major social media influencers sold large quantities of the company’s face masks to consumers while wrongly claiming that it was the cheapest offer available anywhere.
Influencers Austin Li Jiaqi and Wei Ya regularly reach tens of millions of buyers during their two ecommerce live broadcasts, and the November 11 single day festival has become one of their most anticipated broadcasts.
This year, among the many products they each sold that evening was the allegedly special offer of lots of 50 L’Oréal masks for 429 Yuan (49.85 GBP).
But it emerged soon after that the same deal was available directly from L’Oreal for 258 yuan.
Li, known as the “lipstick king” of China for his ability to sell masses of products online, and Wei, a former pop star who rose to fame as the winner of the Chinese equivalent of Pop Idol, began to receive a large number of complaints from angry buyers.
The two influencers have apologized. After L’Oréal did not immediately announce that it would compensate those who bought the masks, influencers said they would no longer showcase the company’s products.
L’Oréal apologized and confirmed that it would pay compensation. In a statement, the company blamed its “overly complicated sales mechanism” and said it had “found a constructive and satisfactory solution to responding to recent customer complaints regarding the promotion of singles.”
The argument was not pleasant for anyone, but it shows how important influencers have become as luxury endorsers in China.
So how has the market changed and what does this mean for customers?
Changing the face of luxury retail
China is the world’s largest market for luxury goods, with Chanel, Dior, Cartier and Hermès among the country’s leading brands.
The market has done well during COVID. For example, large Hong Kong-based luxury goods retailer Chow Tai Fook announced an annual revenue increase of nearly 24% in its 2021 fiscal year, mostly from mainland China.
Luxury brands have traditionally relied on flagship stores in top shopping districts to connect with their customers. The number and size of stores has been steadily increasing in major shopping malls like Plaza 66 in Shanghai and SKP Beijing, where all the major luxury brands have large exterior facades and dazzling logo displays.
They also use historic buildings, such as the ones north of the Shanghai Bund waterfront district. But while physical stores remain important, most brands are looking to expand their reach online.
A big part of this is using the internet as a medium to communicate their relationships with celebrities.
Cartier, for example, invites Chinese movie stars to attend its promotional events.
These would include star actors like Tony Leung, and more recently actor Chang Chen and actor / singer Lu Han, who would be referred to as “good friends of Cartier” to underline the brand’s prestige through these connections.
But when Cartier tried to use social media to promote these celebrity attachments, consumers reacted badly.
I’ve read thousands of comments (in Chinese) from people ridiculing the watchmaker for calling their endorsers “friends”, claiming that it diminishes the importance of their favorite stars.
Most Chinese would say “guest” is a more respectful choice of word than “friend”.
Perhaps in part because of such experiences, luxury brands have turned to social media influencers to help them communicate their messages.
For example, Dior hired Angelababy, a famous actor and internet celebrity from Hong Kong, as a brand ambassador in 2017.
The relationship has continued to this day, with the actor appearing in virtual form at Shanghai Fashion Week in April.
Still, using Angelababy in this way has been questioned by Dior customers online, as she is an agent for the brand rather than an independent influencer.
This means that she is seen as not being able to speak on behalf of Dior customers and fans as she might have otherwise.
Much like celebrities, influencers have the additional problem that brands have no direct control over their behavior.
Whatever happened exactly in the case of L’Oréal and its influencers, for example, they haven’t been speaking in unison since the mask debacle.
When it comes to the dangers of individual behavior, the only consolation is that they can sometimes work in the brand’s favor. This happened to Dior, for example, when footage surfaced in which Angelababy was seen speaking on behalf of an actress during a meeting with pop star Kris Wu, who was later arrested on suspicion of rape in relationship with a separate incident.
Regardless, recent L’Oréal issues show that while influencers are potentially more objective moderators than traditional celebrities (especially if you don’t use them as brand ambassadors), online marketing presents always big risks.
In an age where millennials engage primarily online, an incident like the one with Li and Wei can spread quickly and stay in the minds of consumers far more than the glitzy marketing rhetoric that is pushed by luxury brands.
A fan exposed to a debacle like L’Oréal’s can become hostile overnight to the brand he loved.
Perhaps the ideal relationship between brands and influencers stems from Vogue China’s decision earlier this year to appoint famous 27-year-old blogger Margaret Zhang as editor-in-chief.
Although she never took any journalism training, she is well accepted by high fashion consumers, and her endorsement is now arguably one of the most valuable for brands in the industry. (The conversation)