The Rise and Implications of the Wang Hong Economy in China

This essay provides a comprehensive analysis of the Wang Hong economy in China, a rapidly growing digital economy driven by internet celebrities. It defines the term "Wang Hong," explaining their origins and evolution from traditional celebrities, and how they leverage social media platforms for popularity and economic gain. The essay explores the dynamics of the Wang Hong economy, including the business chains and support systems behind these celebrities. It differentiates between internet and traditional celebrities, highlighting the influence of Wang Hong on consumer behavior, particularly among younger demographics, and their role in marketing and e-commerce. The study also examines the reasons behind the rise of the Wang Hong economy, including technological advancements, the growing Chinese economy, and changing consumption patterns. Furthermore, the essay discusses the aspect of online retailing and e-commerce within the Wang Hong economy, using TaoBao as an example. In conclusion, the essay emphasizes the expanding influence of the Wang Hong economy and its potential for future exploration and international expansion.

Running head: WANG HONG ECONOMY
Wang Hong Economy
Name of the Student
Name of the University
Author Note

1WANG HONG ECONOMY
Table of Contents
Introduction......................................................................................................................................2
“Wang Hong”: Origin and Meaning................................................................................................3
Wang Hong Economy......................................................................................................................4
How Wang Hone Economy works in China....................................................................................4
How are internet celebrities different from traditional celebrities?.................................................5
Reasons behind the rise of the Wang Hone Economy in China......................................................7
Online relating perspective of Wang Hong Economy.....................................................................8
Conclusion.......................................................................................................................................8
References........................................................................................................................................9

2WANG HONG ECONOMY
Introduction
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.

3WANG HONG ECONOMY
“Wang Hong”: Origin and Meaning
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.
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.

4WANG HONG ECONOMY
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.
Wang Hong 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.
How Wang Hone Economy works in China
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:

5WANG HONG ECONOMY
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).
How are internet celebrities different from traditional 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.

6WANG HONG ECONOMY
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.

7WANG HONG ECONOMY
Reasons behind the rise of the Wang Hone Economy in China
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:
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.
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.

8WANG HONG ECONOMY
Online relating perspective of 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.

9WANG HONG ECONOMY
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:
http://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.

10WANG HONG ECONOMY
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: http://targetchina.com.au/article/internet-celebrity/ [Accessed
13 Jan. 2018].