The rise of affiliate marketing in China

What is affiliate marketing?

Affiliate marketing is an advertising model in which a company will use and compensate a third party to generate traffics and leads to the company’s product. The third party is therefore called “affiliate” and is paid through a commission fee.

Why Affiliate marketing in China can change the game?

Affiliate marketing is the perfect match for e-commerce merchants. If they need to reach a wider base of Chinese internet users and therefore potential customers, these merchants will just need to cooperate with an affiliate.  And the wider is his network, the better he will be.

How does it work?

The affiliate communicates and promotes the products offered by a company on the E-commerce platform to his network. He can implement marketing content (text, photos, videos, etc.), ads, and links on all channels available on his network. Afterward, he’ll redirect visitors who previously clicked on one of these links/ads to the e-commerce online store. And if the redirected users purchase something, the affiliate will get a commission according to what has been negotiated with the company (generally 5-10% of the sales price).

Also, following the rise of e-commerce platforms in China, affiliate marketing turns out to be a real competitive advantage in terms of dragging new leads and developing a company business through social media.

Reminder about China’s retail market in 2019:

• Current growth of 3.5% reaching $5.291 trillion
• Forecast expect the Chinese retail market to reach $5.6 trillion in the coming years
• Retail e-commerce sales represent 36.6% of total retail sales
• By 2023, retail e-commerce sales should represent 63.9% of total retail sales

Top 3 retail e-commerce platforms in China?

• Alibaba (Tmall & Taobao) taking around 56% of retail e-commerce sales
• JD.com with around 17% share
• Pinduoduo

China, a country with some of the biggest e-commerce platforms in the world and the largest market place is now under the trend of the most popular video-sharing app: Douyin.

With an average time spent on the app by Chinese users of 56-73minutes per day, Douyin is not only the most popular short video app, it’s also the most plebiscite app to make money.

Furthermore, the video king has recently made an update allowing content creators to link directly to the Taobao e-commerce platform… And this is an amazing opportunity. It looks like paradise for affiliate marketing.

From now on, affiliates earn a commission for every sale they manage to bring to Taobao stores and Douyin is a perfect playground for them. It literally changed the game for Taobao’s affiliate marketing program: Taobaoke.

Douyin in couple words:

• Average users spend 56-73on the app
• Average video’s length: 1min
• Daily active users on the app: +300 million

Why is Douyin a game-changer?

• Good content prime. No need to be famous or having a high budget in video production.
• Low-cost tool. A smartphone is enough to start doing good content and target a wide audience.
• Simple monetization system and good integration of Taobaoke

With this app, the few things affiliate marketers need are:

• A good content
• Consistent uploads
• Stick to their niche market

How does Douyin’s affiliate marketing works on Taobaoke?

There are usually four main actors in the Douyin Taobaoke business, constituting a very simple model.

• The business

If they want traffic to be generated to their store, they’ll negotiate with an affiliate broker who will manage a network of content creators.

• A broker

He distributes the job to its network of content creators in the right niche market. In exchange for what he’ll get a small fee from the affiliates.

• Individual/content creator

He will simply input the product into its video-based. He’s free to promote it in his own way through the app from the moment he’ll set up the affiliate link in his videos. Videos that will hopefully bring visitors to the client’s Taobao/Tmall store.

• End consumer

The end consumer just has to enjoy the short videos that interest him. And if he likes something, he’s free to follow the link straight to the Taobao store where he can buy the product without having to manually switch apps.

Can anybody work as a content creator?

Unfortunately, not. To do so, an individual must have over 10 thousand of legit followers. Plus, the content should be of high quality and match Douyin Algorithms. Last but not least, a content creator must stick to his niche market.

• Get +10K followers
• Register as a seller
• Register as a Taobaoke Affiliate
• Enable seller feature
• Find the right products in your niche market

But regardless of the position you have toward Douyin Taobaoke business model, it offers many advantages for all of its business actors:

• End consumers have a really nice shopping experience
• Affiliate can generate good content and therefore make good money
• Store owners only pay commissions on realized sales

As a brand, how can you take advantage of this opportunity?

Consider that Douyin is a great tool to build your reputation in China, but also to promote your brand and operate online sales. Just with 100RMB (around $13) you can boost your videos and reach an audience of over 5,000 people.

But as a big company, you may need to follow strict guidelines and approval processes in order to publish any content. Even if you’re working with a third party.

Otherwise, companies can also use KOL (Key Opinion Leader) if they match the brand’s criteria. Indeed, KOL must follow the same positioning as your brands and present themselves as an expert in your product sector. Otherwise, KOL can make a great job for you in terms of promotion. They’re not cheap… but can be really efficient.

Douyin is already composed of thousands of people that already built a wide connection network. Whether you’ll choose affiliate marketing or KOL strategy, you’ll need to prepare your budget, time schedule, and a team to manage all this.

More generally and out of the Douyin-Taobaoke model, affiliate marketing is a source of many advantages for your business:

• It’s performance-based. Affiliates are only paid by the commission if a sale happens.
• Give you access to a large audience
• It can boost your reputation
• Cost-effective
• It can scale your traffic and sales

It’s a very effective and low-risk investment for companies to expand their marketing efforts. A new way in China to get great results and help your online store to reach new heights.

What can we do for you?

At the GMA, we can help you to optimize your E-commerce business, optimize the launch of a new product and establish a KOL strategy or an affiliate marketing campaign. We can:

• Choose the right online platform for your brand
• Launch and develop your e-commerce platform
• Build the best customer experience
• Improve customer service
• Develop a strong digital marketing strategy on Chinese social media

We are the Gentlemen Marketing Agency

Strong of 7 years experience in the Chinese market with our team of 80 people, we help brands building trust and brand awareness in the Chinese market.

We drive for success.