China’s small business owners enlist the help of “cloud shareholders”

From which drinks to stock in the fridge display to which colourway to choose for an awning, all kinds of minute business decisions are being made with the help of China’s “cloud shareholders”. These altruistic netizens offer their opinions on how strangers can improve profitability of their businesses at the consumer-facing level. Facilitated by social media, it is like an instant focus group requiring nothing but posting a picture to Douyin or Xiaohongshu.

The phenomenon has been around since as far back as 15 years ago according to some reports. But with the rise of post-pandemic hyper-localism, in which urban consumers are finding a deeper appreciation for their immediate surroundings, small local businesses are taking centre stage in Chinese Gen Z’s consumption preferences. What’s more, with the steady advancement of “local life” services on the country’s social media platforms, small businesses and their potential consumers can connect faster than ever before.

The Canadian athleisure giant Lululemon may also have spurred the trend according to CBNData. Entering the Chinese market back in 2013, the brand has seen huge success in large part thanks to its community marketing strategy, which saw it organise workshops in partnership with local sports instructors and enthusiasts. Powered by China’s online social commerce scene, the strategy was highly effective at building authentic brand connection and values alignment among its target audience.

In a similar way, the cloud shareholders phenomenon goes beyond the realm of a one-time request for advice, developing into a community over time. By engaging with netizens in this way, brands have inadvertently found a suspense-filled story ripe for content creation. The owner of a convenience store in Chongzhou, Sichuan went viral at the end of 2022 for posting daily updates on Xiaohongshu showing whether the store had made a profit or loss. The cloud shareholders offered encouragement in the comments section each day and sympathized when losses were made.

After emotionally investing in the trajectory of the business via the only community, cloud shareholders also sometimes take their support offline. If they live local to the business, they may check it out in person and then grow the business through word-of-mouth recommendations that drive real-world footfall. Cloud shareholders with large social media followers can even become a fledgling form of KOC marketing for brands with fewer resources, offering greater outreach through authentic reviews and relatability.


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