China’s social-media-savvy entrepreneurs give companies a boost

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By Assistant Professor of Marketing Chen Lin

In an ad for his company Chen Ou, Founder of online cosmetics company jumei.com and the youngest CEO to ring the New York Stock Exchange opening bell in 2014, declared: "I'm Chen Ou; I speak for myself". Following in his footsteps, many Chinese entrepreneurs have emerged from behind the scenes to endorse their own products, consciously or unconsciously presenting their private lives online.

For example, instead of paying billions of yuan in endorsement fees to celebrities, Dong Mingzhu, the Chairman of white appliance maker Gree Group who frequently makes Forbes lists of Asia's top businesswomen, did ads for the Gree Smartphone herself. It was her avatar and greetings that appeared on the phone's boot-up screen when it was rolled out last year. As a result, it was not the phone's performance reviews but Chairman Dong's queenly air that hit the headlines. With this stroke of genius, Gree has left traditional manufacturing giants, such as Midea and Haier, well behind it in the dust in terms of Internet marketing.

Then there is Wang Sicong, son of Wanda Group Chairman Wang Jianlin, who has created his personal brand and successfully leveraged it to blaze his own trail in e-sport and investment circles. As Chairman of Prometheus Capital, Wang Sicong realizes that for web celebrities, the fan base creates commercial value – just as they do for e-sport, sports and online games.

He is deeply aware that the public harbor hatred against the rich, but they still try to ride on their coattails. While indulging in self-depreciation, he hits out at the upstarts, who offend the public, for their hypocrisy, affectation and stupidity. With wisdom and wealth, he has broken down the barriers between the rich-second-generation and the post-80s/90s Internet users, who have yet to establish themselves. This model, in return, enables him to derive commercial value from them.

But are Dong, Chen and Wang the exceptions. What is the real value of social-media-savvy entrepreneurs?

According to a market survey by Weber Shandwick, among the world's top 50 companies, two-thirds of U.S. Fortune Global 50 CEOs have a greater presence on social media, up 30% from the past two years. Warren Buffet, hailed as the "Sage of Omaha"; Jack Welch, CEO of GE; Tim Cook, CEO of Apple; Mark Zuckerberg, CEO of Facebook; and Rupert Murdoch, Chairman and CEO of News Corporations, are all renowned web celebrities.

According to the 2015 Social CEO Report released on CEO.com:

• 83% of American consumers agreed that social-media savvy CEOs "can build better connections with customers, employees, and investors."

• 77% of consumers were more willing to buy products from a company whose CEO was active on social media.

• 82% of consumers said they would be more likely to trust a company whose CEO engaged on social media.

• 75% of consumers said company executives, active on social media, would hold stronger leadership, up 30% from the previous two years.

• 70% of employees said their boss would hold stronger leadership if he was keen on social media.

• 52% of employees said they felt more inspired to perform and excel when working under a dynamic, socially active CEO. Inspiration and guidance drive employees to stay in their jobs.

Web celebrities can exercise strong leadership

The U.S. presidential campaign, which is in full swing, can speak volumes for the influence of web celebrities. On Twitter, "Trumpyourhair" has made quite a stir among Internet users, who try to arrange their cat's fur and even the silk of corn after the fashion of Republican presidential candidate Donald Trump' s signature hairstyle. In an interview with CNN, Trump invited a woman reporter onstage to touch his hair. Trump's hair has even made it on to the cover of The Economist, which did a tongue-in-cheek photo montage showing his tresses suspended from the "Trump" helicopter hovering above the White House. According to media estimates, among all presidential candidates in U.S. history, the billionaire has gotten the biggest bang for the least buck.

Barack Obama is perhaps the earliest social-media-savvy president in U.S. history. When he won the U.S. Presidency for the first time via social media in 2008, Obama was rated by Advertising Age (a U.S. magazine) as the "Advertiser of the Year". When he embarked on his second term of office in 2012, I happened to be in the U.S. I invited the Chief Data Officer on his presidential campaign team (a character in the latest season of the U.S. TV drama House of Cards is based on him) to deliver a class lecture. He explained that the campaign team leveraged social media for ballot prediction and sentiment analysis to advise Obama on what to say and where to pump funds.

For example, the campaign team noticed wealthy middle-aged women in California made up a tiny portion of Obama's fans, but their ballots held sway. Thus, the team invited George Clooney (known as the "friend of well-heeled women in California"), to become Obama's funding partner. As a result, the team raised tens of millions of dollars overnight.

Presidential candidates are indeed pushing the envelope.

Nevertheless, not each leader is cut out to be a web celebrity. The front-runner for the Democratic nomination, Hillary Clinton, has also tried to present herself as a "man" of the people. In stark contrast to Trump's outspokenness, Hillary unveiled her campaign schedule like a traditional company executive. Occasionally, she showcased her wardrobe to win over woman voters. Notwithstanding, her "Internet-based campaign" has yet to get somewhere. She posted on Instagram a photo of her chat with the clerk of a sandwich shop. Later, the clerk replied, "That's me and I'm voting Bernie (the other Democratic presidential candidate). I'd like it if you took the pic down."

It is very clear that engaging on social media should not be something done on a whim.

In my opinion, Wang Mang was the first media-savvy leader in Chinese history. Although historians have traditionally viewed him as a usurper, his path to seizing the throne was based on the prototype of Internet thinking, which features user-centricity, openness and equality, and word-of-mouth communication. Born into a noble family, Wang Mang assumed no power in the very beginning. While practicing frugality in life, he showered aides, staff and civilians with his salary. He took public opinion seriously, gaining a large following. In addition, he was on good terms with opinion leaders. Soon his reputation grew larger than that of his uncles with power in hand. Afterwards, he became an emperor supported by both officials and civilians. Hu Shi regarded him as "the first social reformer in Chinese history". Jian Bozan acclaimed him as "the most audacious and wisest statesman in Chinese history".

Social-media-savvy entrepreneurs are, in essence, company leaders who tune into the concerns of consumers. They are inclined to do emotional marketing by integrating personal charisma with corporate brands. There is a Chinese saying that goes, "those who gain public support will conquer the world."

No wonder CEO.com suggests that each entrepreneur should become a web celebrity. Modern leadership has undergone tremendous changes. Farsighted entrepreneurs should realize that real-time interaction on an equal footing on social media can bring companies intangible value, while those who steer away from the Internet will likely be behind the times.

But if each entrepreneur makes full use of social media, will we need to groom him as a web celebrity or business leader?

Even in the Internet sector, which stays closest to fans, not each boss is naturally as outgoing as Jack Ma. Both Tencent Founder Pony Ma and Huawei Founder Ren Zhengfei keep a low profile. If he had not married social media star Zhang Zetian (known as "sister milk tea") JD.com's Richard Liu, a typical technology-savvy entrepreneur, would likely shy away from media. Up to last year, 61% of CEOs in the U.S. had never voiced their viewpoint on social media. Maybe this is because while with tremendous charisma entrepreneurs can reap huge benefit by being closely tied to their company, the side effects are not to be sniffed at. I look at the downsides in my Forbes blog.

This article was first published by The Economist Intelligence Unit.

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