When it comes to brand exposure you have quite a few options that you can pursue; there is social search optimization, social media marketing, Baidu Ads, along with many other forms of marketing. You may have come across the term affiliate marketing, or performance-based marketing while searching for avenues to improve your Chinese marketing strategy. Affiliate marketing is one of the oldest marketing tricks to connect with new customers and bring more leads for your business. It can be as effective as KOL marketing or Baidu Ads if done properly and it can really generate a lot of traffic for your business.
What is Affiliate Marketing?
Affiliate marketing is an online sales tactic that lets a company or product owner increase their sales by partnering with others targeting the same audience -“affiliates”- to earn commission by recommending the product to consumers. In other words, it can be seen as a paid marketing arrangement between a company and an external website for traffic or sales generated from its referrals.
Affiliate Marketing Trends 2019
Thanks to the billions of mobile users and the ever expanding middle class population in China, the Chinese market is a very lucrative field for those involved in the affiliate world.
- Travel is booming: Chinese tourists made 140 million outbound trips in 2018, which is a 13.5% increase since 2017. Consumers are seeking niche travel apps and websites where affiliates are creating dedicated offers in tourism.
- Elderly goes digital: China’s senior population is expected to reach 255 million by next year and the government has introduced programs to get them more in-tune with the digital age. More affiliate programs are leveraging promotions specifically targeting the elderly.
Live streaming is interactive: The live streaming industry made more than 4.4 billion last year and affiliates are taking advantage of this by creating offers surrounded by live demonstrations.
Components of Affiliate Marketing
There are 4 main components that make up affiliate marketing.
The merchant, sometimes called the advertiser, is any product owner or business that wants to sell a product or service over the internet.
The affiliate is the person or business that helps advertise and promote the merchants’ product. This could be through a website, blog or social media account. An affiliate can essentially be anyone who knows how to sell a product.
The affiliate program or network acts as the middleman between the merchant and the affiliate.
Any customer that purchases a product or service through the affiliate.
Affiliate Marketing in China vs The West
Affiliate Marketing in the West
Affiliate marketing has been steadily growing in the west year by year. Most marketing usually consists of affiliate networks but social media affiliate programs have also been on the rise in recent years. It is also quite common to see brands using influencers as affiliates to gain even more awareness.
Some of the best platforms to do affiliate marketing in the west include:
- ShareASale Affiliates
- Amazon Associates
- eBay Partners
- Spotify Affiliate program
- Rakuten Marketing Affiliates
- Leadpages Partner Program
Affiliate Marketing in China
Affiliate marketing in China is not very different from the rest of the world. You share your revenue with the affiliates and they promote your products. China also has a lot of affiliate network networks that cover a wide range of products and services. Some of the main differences usually revolve around the industry and payment method. The most common payment methods are CPA and CPS. CPA (cost per action), meaning that you pay when a user performs a certain action. CPS (cost per sale), meaning you pay only when you generate sales from a network.
Top 5 Chinese Affiliate Network Platforms
Linktech was founded in 2004 by a Korean company and has a website that operates in English. It operates on a CPS model, which makes it more appealing for a lot of foreign brands.
Established in 2011, DuoMai claims to have over 100,000 publishers to provide omnichannel marketing in China. This network plays the affiliate role itself by paying publishers to promote products on their websites and pays them for specific actions.
Launched in 2002, Chanet is an abbreviation for China Affiliate Network and is known as one of the more traditional affiliate networks. The network claims to work with over 300,000 websites and has a niche focus in recruitment, travel, education, networking, e-commerce and entertainment.
Established in 2004, Yiqifa is one of the first Chinese affiliate networks and has connections with over 600,000 publishers. Publishers can easily sign up and get paid all through the platform, making it very attractive for publishers.
Linkhaitao has been operating for more than four years and claims to be the first advertising platform to focus on effective cross-border marketing in China. The platform mostly works with foreign businesses and operates on a CPS basis.
Pros & Cons of Affiliate Marketing
It’s important to weigh in on the pros and cons of affiliate marketing. Ultimately, weighing the benefits and choosing a network comes down to a brand’s needs. To reduce risk to your brand and prevent data manipulation, always conduct in-depth research on a new affiliate. Monitor your brand online to see what other consumers are saying about your product and make sure your affiliate agreement spells out exactly what constitutes a commissionable affiliate action.
- Promote your product to a vast audience
- Flexibility with payment methods (CPA and CPC)
- Ready-made target audience in your industry
- Can receive multiple streams of revenue from multiple affiliates
- No expertise needed
- You don’t control affiliate marketing programs
- You don’t control your competition
- No guarantee of revenue especially for brands with new products
- False advertising on the affiliate’s website can destroy your reputation
Affiliate marketing can be a very effective, low-risk investment to help expand your marketing efforts, but it doesn’t work well for every single brand. Companies with new products and services might want to take other approaches for marketing to Chinese consumers. If you want more information on if affiliate marketing is right for your brand, contact us and our team will get you on the right track.