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Chinese shoemaker firm triples its valuation propelled by China’s staggering influencer economy

The firm acquired internet celebrity agency Yowant, and has been linked with popular video blogger Li Ziqi.

Photo Source: tuchong.stock.com

Guangzhou-based shoemaker Saturday, which trades on China’s Shenzhen Stock Exchange, has seen its stock price hit the 10% daily trading limit 13 times within 17 days since December 13, rocketing the firm’s valuation to around RMB 19 billion (USD 2.73 billion), impulsed by the country’s staggering passion on the influencer economy.

Saturday, a company mainly known as shoe vendor, has started to play the “influencer economy” card, banking on its acquisition, consolidated earlier in 2019, of MCN (Multi-Channel Networks) agency Yowant, which owns more than 50 internet celebrities and actors in China.

In mid-December 2019, the shoemaker company was also rumored to have a connection with Ziqi Culture, a firm owned by video blogger Li Ziqi, who went viral for her videos featuring pastoral villager’s life in China’s countryside capturing over 8.15 million subscribers on YouTube and 21 million followers on Twitter-like Sina Weibo.

The two companies later dismissed the rumors, although according to Chinese enterprise data provider Tianyancha, Saturday’s major shareholder Zhang Zeming has invested in Guangzhou Zhuoshi, which has interests in Hangzhou Weinian, the largest shareholder of Ziqi Culture.

The connection between Saturday and these influencers companies has raised investors’ attention in the company, propelled by China’s increasingly profitable influencer economy.

In 2018, the marketing volume of this brewing trend in China reached RMB 2 trillion (USD 288 billion), up 82% from 2015’s level, according to third-party consulting firm iResearch. Famous live-streamer Li Jiaqi for instance, sold goods worth RMB 1 billion through live-streaming on last year’s “Double 11,” China’s biggest shopping extravaganza held by Alibaba’s Taobao, multiple Chinese media reported. Li Ziqi, another liver streamer, reportedly perceived an income of nearly RMB 200 million in 2019, although she denied these rumor later on.

However, although many influencers have grown in a crowded marketplace, the business model doesn’t seem to be mature and sustainable enough yet. Alibaba-backed KOL (Key Opinion Leader, or internet stars) incubator Ruhann went public in the US in April last year and raised USD 125 million on its initial public offering (IPO), but the company has been sluggish in revenue growth and keeps losing money.

Besides, as fake follower data has become a common problem in China, the influencer economy bubble also appears to be vulnerable. For example, in October, the Weibo account of a female influencer who goes by the name Zhang Yuhan was suspended for “data fraud.” Zhang uploaded an ad video which gathered over 120,000 views, thousands of likes and hundreds of repost soon after its release, but the advertiser alleged that the ad placement didn’t bring in any real orders other than fake reviews, KrASIA reported.

In the meantime, Saturday’s stock hit another limit-up today, with its price rising to RMB 24.25 (USD 3.4) per share.