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On China’s smartphones, a revolution in marketing, relationships and money

From livestreaming everyday activities to pay-per-click recommendations, Chinese Web users and tech companies are pioneering new ways of interacting and making money online.

CHANDAN KHANNA/AFP/Getty Images

Linda Yao is an 18-year-old university student in Shanghai. She has 459 friends on WeChat, the Chinese social-media platform. They are friends and classmates, but Ms. Yao sometimes refers to them as "followers" or her "following base."

Ms. Yao is no celebrity. But when she posted a link to Japanese-made UHA Mikakuto gummy candy this January – "these are so good!" and a string of emoji – she earned money every time one of her friends clicked through.

The trick is "you don't have to make it seem like an advertisement," she said. "You can make it look less like spam and more like a recommendation. Which I think helps if you don't want your friends to be mad at you or block you."

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The popularization of the Internet was expected to give everyone a platform to vent or, perhaps, grab a slice of celebrity.

But in China, where mobile technology has raced ahead of the West, the mixing of social media and money has allowed Chinese smartphone users to turn the digital marketplace into a bazaar with hundreds of millions of individual sellers, a place anyone can cash in, make friends into clients and turn social networks into business ones.

Through their lightning-speed adoption of change on the Internet, Chinese companies and Web users alike are upending the nature of marketing, the workplace and even the economics of friendship. In the process, they are pioneering ways of interaction that may one day come overseas, all while celebrities big and small cash in.

It's "challenging the norms that only people who are famous can earn money through their influence," said Ms. Yao.

Maybe one day she, too, will be able to buy the Porsche she, in her own small way, helped to market.

WeChat: easy to send money

What sets apart social media in China is the way apps such as WeChat – which is installed on nearly every smartphone in the country – directly connect to bank accounts, making it about as easy to send someone money as to send them a picture. So money can be exchanged with friends, power bills paid, groceries purchased and online shopping completed – all through a chat-based platform.

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"China is just light years ahead of everyone else," said Mark Tanner, founder of China Skinny, a Shanghai-based digital commerce consultancy. "It's bringing social media and commerce together in this really powerful cocktail."

And it's creating new ways to make and spend money that far eclipse what has developed in Western markets; a good deal of the commercial activity on WeChat, for example, would violate the Facebook terms of service – including what Ms. Yao is doing when she posts paid content through an app called Robin8.

"With the whole sharing economy, and because of social media, everyone is a voice, everyone is media, everyone is a brand now – and everyone is able to monetize," said Robin8 founder Miranda Tan.

She calls Robin8 an "intelligent influencer marketplace that is powered by big data and artificial intelligence."

What that means is that computers have scoured public accounts on Chinese social media and created profiles of 30 million people, using machines to read their posts and determine their interests. They are students and mothers, factory workers and desk jockeys, many of them with the few hundred social-media friends that surround any reasonably active member of the digital community.

They are not what Western marketers term "micro-influencers," a category of people with fewer than 100,000 followers, many of them with specialized interests that can be easily commercialized.

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Many of the people on Robin8 might be better called "nano-influencers," people without aspirations to build personal brands but who like the idea of finding new ways to spin cash out of their personal lives online.

Among them is Ms. Yao, who over the past eight months, has earned a total of roughly 450 yuan, about $90, by posting some four dozen pieces of sponsored content to her WeChat Moments, which functions a bit like a Facebook feed. Robin8 delivers personalized campaigns she can choose to share; she has posted advertisements for Porsche; the Chinese online shopping bazaar Tmall; and an English tutoring company. When friends click, she gets paid, from two cents to many times that. Once, she took a selfie of herself using a company's product and posted it to WeChat. She was paid 79 cents.

Is that worth it?

"The question is, why not?" she asks. The idea "is just utilizing your influence, even when you're not a celebrity." Every three or four posts earns her enough to buy a coffee. Some of her friends with more social-media followers can earn a coffee for each post.

It's "a little perk, and testing my social influence is like a fun activity to do," she said.

Livestreaming and chatbots

The personalization of commerce has taken root in a society whose pervasive scams and fakes have created an unusually strong demand for what might be considered more authentic connections.

"In China, they don't really believe a lot of things – but they do believe each other," said Ms. Tan. "They don't really trust the government. But they trust the people they know."

And the quest to commercialize personal connections has taken all sorts of flavours in China.

Tens of thousands of people, many of them young women, have taken to livestreaming daily life on the Internet: walking through shopping malls, bedrooms and airports attached to cameras that broadcast their every move online. They earn money from gifts sent by viewers. It's a practice that sometimes veers into the pornographic, although local governments have cracked down, shutting down numerous sites and banning certain practices, such as the "seductive" eating of bananas. But it has been a lucrative business. Livestreaming last year alone was worth nearly $6-billion, investment bank China Renaissance Securities has estimated. In December, an estimated 344 million Chinese people tuned in to Internet livestreams.

Another staggeringly large industry has grown up around influencers, small – such as Ms. Yao – and big, such as Zhang Dayi, a fashionista who has spun a knack for glamorous pictures into her own fashion and endorsement empire, and earnings estimated as high as $59-million. That's on par with the estimated 2015 endorsement earnings for LeBron James, according to data compiled by opendorse.com, which tabulates athletes' sponsorship income.

"Western celebrities have millions of fans on Facebook and Instagram and Twitter and they can't make a dime. But China is revolutionary in that stars can actually make a living being stars – not just with every once in a while brand sponsorship, but with commerce," said William Bao Bean, a venture capitalist in China who has invested heavily in social commerce, including in Robin8.

China is helping to push advertising "into a post-display ad world," he said. That has huge implications for companies such as Google, he added, "because that's where they make all their money."

It is, he said, "a brave new world" – one that in China has taken a step further with the introduction of robots.

Elsewhere, companies are developing robots to give celebrity fans the illusion that they are interacting with their idols. They start by sampling videos and interviews created by a celebrity, then use those to "create a story, to tell the story of who [the celebrities] are" as the chatbot engages in conversation with followers.

"What we're trying to do is help them create a channel where they can talk to as many people as possible without actually doing it. Let the robot do it," said Michael Chee, who is developing the technology. The fans know it's a robot on the other end. But those "chatting to the WeChat accounts feel engaged and feel like they're talking to someone," he said.

It's also a perfect vehicle for endorsement, allowing the celebrity chatbot to slip in paid ties to products. It could work anywhere, but is tailor-made for China, he said.

"The Internet here is very celebrity-heavy."

'Content-makers also need to be paid'

The speed of change highlights the growing pervasiveness of digital commerce in China, whose continued double-digit growth has been among the domestic economy's brightest lights. But it underscores much broader cultural changes that have begun to change Chinese workplaces, too.

At Onion Video, a branding company in the city of Chengdu in southern China, management has rejected ossified structures of hierarchy and management. Instead, it has sought to cultivate the interests of individual employees – a concept that has gained currency among millennial workplaces in the West, but which constitutes a more radical upending of how business is done in China.

"It is impossible for a bureaucratic company to innovate," said Roey Chen, general manager with Onion. "We have put a lot of effort into encouraging staff to produce ideas."

Often those have no immediate commercial rationale: telling ghost stories to co-workers or concocting ways to cook food with office equipment, such as a water dispenser, floor tile or discarded pop cans. The latter idea has proven to be a runaway hit. Xiao Ye is the employee who first made a video of cooking beef slices on an iron, a culinary MacGyver working at her desk, ignored by co-workers staring at screens.

As the creative designer made more videos, her Internet following grew exponentially. Within three months of publishing online, her videos were viewed 100 million times, including more than two million on YouTube.

Soon, the e-mails started pouring in: She gets 50 to 100 messages every day from "companies looking for co-operation," she said in an interview. (Xiao Ye is not her real name, which she declined to provide.) Those companies wanted "brand placement, advertisements, celebrity representation" and the like, she said. So far, she has said no, and, at 22, she already speaks like an ad executive.

"It's because our fans now are really sticky with us," she said. "If we introduce advertisement too early, I don't think it would be a good decision. What we want is to attract them with the content."

But she can sniff a payday on the horizon, and it smells better than her office creations.

"To be honest, I'm pretty eager to make money. But I have to wait for a good opportunity, a good partner," she said.

The scale is different, but she and Ms. Yao both form part of a similar trend – young Chinese looking for ways to wring out a buck online. But if what they are doing might raise questions elsewhere about how commerce is changing the way humans relate to each other, experts in China see little problem.

"Content-makers also need to be paid," said Chen Yongdong, an expert in new media at Shanghai Theatre Academy. "There's no need to be critical of them for making money for their work."

The changes point to the ways life is being upended by the unrolling of the information revolution, said Tang Yinghong, an associate professor of psychology at Sichuan Leshan Normal University who runs a popular psychology-oriented public WeChat account named PsyEyes.

"It will overthrow many things. As we face it, we have two choices: withdraw and try to block it, or actively adjust ourselves to it," he said. "It is a development trend we cannot reverse. We need to adjust and adapt."

Onion Video's Mr. Chen says people such as Xiao Ye and others epitomize a desire to break free of old strictures – using their savvy and their networks to spin cash.

Young workers in China today place greater emphasis on "realizing your own values," he said.

She "has done what many people want but don't dare to do, which has helped make her into a national idol," he said.

And, he said, "We believe that more things that are fresh and individual will come out of China in the future."

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About the Author
Asia Bureau Chief

Nathan VanderKlippe is the Asia correspondent for The Globe and Mail. He was previously a print and television correspondent in Western Canada based in Calgary, Vancouver and Yellowknife, where he covered the energy industry, aboriginal issues and Canada’s north.He is the recipient of a National Magazine Award and a Best in Business award from the Society of American Business Editors and Writers. More

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