The Pros and Cons of the Chinese Influencer C2M Business Model
Influencer brands are very common in China and most Chinese girls follow at least a few influencer apparel stores on Taobao, such as influencers Cherie (Taobao store: 钱夫人家 雪梨定制) and Grace Chow (Taobao store: GRACE CHOW), or top live streamer Lier Baby 烈儿宝贝 (Taobao store: 烈儿LierKiss).
Sometimes I will buy clothes from these stores because their clothes are inexpensive and they are trendy as well. But the thing is, due to the C2M manufacturing model most of these influencers use, I usually needed to wait for 30-45 days to get the item.
What bothers me is that, after such a long wait, sometimes the item doesn’t fit me and I had to return it. Well, the situation has changed and the C2M model appears to be getting more efficient.
I placed an order on one of the influencer stores yesterday. It showed that I might have to wait 15 days for the trousers to ship. I didn’t pay lots of attention to that because that is how influencer stores often work. So I was very surprised when I received the shipment notification today. The manufacturing and logistics efficiency has improved a lot.
In fact, not only me, many girls have experienced the same thing. Behind this change is the improvement of influencer stores’ supply chains.
But first, what is the C2M business model I am referring to?
In order to cater to their followers (and cut costs) most influencer stores will first create product samples. Then they will post these products on social media and live stream and pre-sell them. Based on followers’ reactions and the presale results, the influencers’ team will decide how many pieces they would like the factory to manufacture.
Another characteristic of these stores is that they constantly release new products. For example, in LierKiss’ store, new products are launched every 10 days.
The upside of this C2M model is that consumers get to help choose which products actually get manufactured and the influencer doesn’t waste money creating extra stock that doesn’t get sold. The downside is that consumers must wait for the product to be manufactured. While they are waiting for the item to be shipped, actually many customers cancel their orders.
What’s more, the growth of live streaming has been both a blessing and a curse. Influencers are leveraging live streaming to sell massive amounts of product, which they have to quickly manufacture and ship.
How is this Changing?
The majority of influencer Taobao stores don’t have their own factories, leaving them at the whim of the factories with little control over how quickly products are manufactured.
However now, as many influencer stores have become well-established businesses with consistantly large order quantities, they have gained a more dominant position when working with those factories.
Nowadays, many factories want to work with the top influencer brands and influencers get to choose what factories they want to work with. For example, Cherie’s team assesses factories with rankings A, B, C, D based on the quality of products they provide, after service, and the rate that they finish orders on deadlines.
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