Understanding The Wang Hong Economy In China: A Review Of Existing Literature Essay.

The Rise of Wang Hong Economy in China

Question:

Discuss about The study of China phenomenon of Wang Hong.

One of the driving factors in the industrial and economic growth and changes in the dynamics of the same in the international scenario has been the technological innovations and progress experienced in different areas in the global framework. Over the years, the world has experienced immense progress in terms of technological innovations, which not only affected the industrial and commercial aspects but has influenced the overall way of living of people in all corners of the world. One of the primary innovations, which have widely influenced the lifestyle globally, is of that of internet. Over the years, the usage of internet has expanded significantly, with more people being accustomed to the concept and its applications. Internet is now a significant part of the personal and professional domains of people in general, in all parts of the world.

Keeping the aspect of increased influence and usage of internet in people’s everyday life into consideration, the assignment tries to discuss about the recent phenomenon, which have been occurring primarily in countries like China, which is popularly known as the “Wang Hong Economy” in the contemporary periods. The term “Wang Hong Economy”, is generally used to refer to the new age digital economy, which is increasingly gaining importance and relevance in the contemporary period. To study the relevance and implications of the same, the following section of the assignment conducts an extensive review of the exiting literatures and scholarly evidences present in this aspect, emphasizing on the economy of  China, from where this concept has originated. 

The term “Wang Hong”, having its origin in China, broadly refers to the new age internet celebrities who are gaining immense global attention in the contemporary period. As described by Sullivan and Kehoe (2017), in their elaborate work on the evolution and dynamics in the world of celebrities in China, the mode of entertainment for people has undergone immense changes and modifications over the years, with the nature and the magnitude of entertainment changing continuously. In the constant competition of getting more popularity and becoming more famous, people have taken up newer methods of publicizing and advertising oneself. One of the newest of these methods of advertising and reaching out to more people is by the use of the increasing popular platform of social media. With the invention and widespread usage of internet, social media has become a part of the daily lives of people across the world. According to the authors, social media not only remains as a mode of global communication, but has also become a medium of exchanging thoughts and ideas, which gave rise to the notion of using the same platform to reach out to more people and to display or convey what they has to show or say. 

Factors Contributing to the Growth of Wang Hong Economy

Talking in the line of Sullivan and Kehoe, in his article, Wang (2017), elaborated the concept of Wang Hong. As asserted by the author, Wang Hong in China refers to those celebrities who get popular not by conventional media but though internet and the different social media platforms. These people, well aware of the increasing usage of social media among people of different age and nature, use this platform to showcase their talents, thereby gaining immense popularity, which can be highly attributed to the ease of using internet, it’s incredible pace and vast reach. This phenomenon is no longer a discrete one as its increasing popularity and economic prospects have been attracting more people to use the same to become popular. Though the author clearly elaborates the meaning and implications of the term “Wang Hong”, he however does not elaborate on the phenomenon of the rapidly rising “Wang Hong Economy” in China and the reasons behind the rise of the same in the contemporary Chinese economy. 

The term “Wang Hong Economy”, as put forward by Wang (2012) is in its broad sense the newly but rapidly growing digital economy in China, which is coming into existence with the increasing popularity and prospects of the phenomenon of Wang Hong. He, unlike the previous authors, defined Chinese Wang Hong to be those who not only become popular on the social media platforms in China, but also have the abilities to channelize their popularity to real cash earnings for them and their sponsors. As argued by the author the Wang Hong economy or the Internet Celebrity economy not only includes those displaying their talents or ideas in the social media platforms but also the people and stakeholders working in the background. This alternative form of economy is especially popular in China and with more people as well as investors pitching in, the valuation of this economy expected to cross 58 billion Yuan in 2017, which is even higher than the box office revenue of China in 2015.

Xu (2018) has elaborately explained the concept and dynamics of Wang Hong Economy in China in the article published in Target China, where the author describes the working and the demand supply dynamics of the Wang Hong economy with the help of a diagrammatic representation of the same, which is as follows:

Figure 1: Dynamics in the Wang Hong Economy

(Source: Xu 2018)

Taking reference of the above figure, the author argues that the Chinese internet celebrity economy not only consists of celebrities themselves but also a full-fledged business chain behind the celebrity faces. This business chain includes the support teams, the agents, incubators, marketing strategists and those who have the ability to design different product selling methods for different commercial companies taking advantage of the popularity of these celebrities (Shijia 2018). 

The Business Chain behind Wang Hong Celebrities

Hua, Leong and Yu (2017), in their scholarly article tries to differentiate between the internet celebrities and the conventional or traditional ones, based on the nature, domain of operations and targeted clienteles these two types of sensations target and their purposes. According to the authors, unlike the non-internet celebrities, the Wang Hong celebrities in China, not only displays their talents but also share their experiences, lifestyles and opinions on different aspects with their viewers quite frequently. They also guide their viewers in terms of food, fashion, lifestyle, travel and others buy suggesting them brands to buy, places to visit and other. The approach of these celebrities being more frequent and less formal, they appear to be more cordial to their viewers than the traditional celebrity, which in turn encourages them to follow their life styles and suggestions. Therefore, in spite of being non-professional, these internet celebrities exert more influence on the viewers, especially the younger ones, who try to follow them.

The advantage of such fan following automatically makes these celebrities a part of the marketing system of various products and services by different companies as argued by Schmidt and Cohen (2013). They sponsor these celebrities to advertise their goods and services in a more cordial and less-apparent manner, thereby making the viewers believe in the credibility of these goods and services as they see that even their favorite celebrities use them too. This informal advertising not only increases the economic benefits of these companies in terms of hugely increased sales but also increases the prosperity of the celebrities as both their earnings as well as the number of viewers increase substantially.  Tuten and Solomon (2017), also argues in favor of Cohen, asserting that the internet celebrities even earn economic benefits from the media channels by creating their own blogs or channels, posting videos and increasing the number of viewers and subscribers to their channels. 

In the age of digitalism in every aspect of human life, internet celebrities are getting increasing global attention with each passing day. However, the trend is especially prominent in China and the concept of Wang Hong Economy has originated and developed in the country over the years. There are several reasons behind the growth and immense popularity of the recently growing Internet Celebrity Economy in China, which have been put forward by different scholars:

6. a) Technological Advancement- According to Chen, Benbasat and Cenfetelli (2017), one of the primary factors, which have contributed immensely to the origin of the Wang Hong Economy, is the highly developed technological framework in the country which includes the widespread usage of internet also. The number of internet users in China increased to as high as 6.49 billion till 2015, among which 5.57 billion are found to have access to internet through their smart phones which they use for purchasing and socializing purposes.
7. b) Growing Economy- Kim and Ko (2012) puts forward another factor contributing to the rising popularity of the Wang Hong economy in China. According to them, the economy of China is growing consistently and the consumption pattern of the people of the country is also changing, much of which is attributed to the increase in the number of youths in the country. As per the assertions of the authors, the youth gets more intrigues by the videos of these internet celebrities and in a quest to achieve a lifestyle similar to those celebrities, they mould their purchasing patterns in a way, which facilitates the growth of the Wang Hong economy. 

Tao and Jiao (2013) highlights the presence of the aspect of online retailing apart from that of media advertising in the Wang Hong economy. According to the authors, the Wang Hong economy also includes the aspect of e-commerce and online retailing. Taking the example of TaoBao, a customer to customer website, the authors suggest that different internet celebrities advertise their stores which includes fashion, food and lifestyle.

Conclusion

From the above discussion, it can be asserted that the Wang Hong economy has been expanding impressively with time. The technological progress and widespread usage of internet, especially among the youths has contributed immensely to the change in lifestyle and the facilitation of the Wang Hong economy in the country. This gives the opportunity of expanding this new form of economy to other countries also, which in turn keeps the scope of exploration and further study of this economy and its prospect in future across different parts of the world.

References

Chen, Z., Benbasat, I. and Cenfetelli, R.T., 2017. “Grassroots Internet Celebrity Plus Live Streaming” Activating IT-Mediated Lifestyle Marketing Services at e-Commerce Websites.

Hua, W., Leong, C. and Yu, J., 2017. Exploring User-Created Digital Content Ecosystem: A Study of China’s Digital Celebrity Industry.

Kim, A.J. and Ko, E., 2012. Do social media marketing activities enhance customer equity? An empirical study of luxury fashion brand. Journal of Business Research, 65(10), pp.1480-1486.

Schmidt, E. and Cohen, J., 2013. The new digital age: Reshaping the future of people, nations and business. Hachette UK.

Shijia, O. (2018). Wanghong economy takes off - Chinadaily.com.cn. [online] Chinadaily.com.cn. Available at: https://www.chinadaily.com.cn/a/201712/11/WS5a2dc2aca310eefe3e9a1481.html [Accessed 13 Jan. 2018].

Sullivan, J. and Kehoe, S., 2017. Truth, good and beauty: the politics of celebrity in China. China Quarterly.

Tao, S. and Jiao, C., 2013. A Study on the Introduction of Online Retailer-Services Perspective. Management Review, 1, p.011.

Tuten, T.L. and Solomon, M.R., 2017. Social media marketing. Sage.

Wang, W.Y., 2012. Who’s blocking the Chinese Internet? The rise of cybercultures and the generational conflicts in China. In Cybercultures: Cultures in Cyberspace Communities (pp. 145-166). Inter-Disciplinary Press.

Wang, Y., 2017. " We are famous on the Internet": A study of the Chinese phenomenon of Wanghong (Master's thesis, The University of Bergen).

Xu, K. (2018). What is "Internet Celebrity Economy" in China | Target China. [online] Targetchina.com.au. Available at: https://targetchina.com.au/article/internet-celebrity/ [Accessed 13 Jan. 2018].