Around the world, affiliate marketing is worth more than $12 billion.
If you’re building a brand in China and want to use other people’s channels to grow your own, you might turn to influencers to piggyback off of already-established audiences.
But the truth is, influencer marketing - working with Key Opinion Leaders - isn’t always cost-effective, and can haemorrhage marketing budgets with little return on your investment.
One alternative is affiliate marketing, and below, we offer a guide to getting started…
Is affiliate marketing right for me?
One of the most important points to make is that affiliate marketing will not work if you’re selling your products on third-party e-commerce sites like Taobao and JD.com; you’ll need to build your own e-commerce store that you have total control over to integrate affiliate tech.
You should also steer clear of affiliate marketing if you work in a particularly sensitive niche, like medicine, finance, adult content, or virtual private networks (VPNs), as you’ll find it hard to enlist most marketers and influencers to promote your products in exchange for a cut.
Finally, make sure you have a budget to launch an affiliate marketing scheme. Though you can start with little expense, you must have margins that allow you to give your affiliates a generous bounty for referring new customers, or they won’t be interested in your program.
How does affiliate marketing in China work?
In China, affiliate marketing works in a similar way as it does in the west. Affiliates promote your products to their audiences, and you share a cut of any sales with them as a thank you.
However, rather than working with affiliates directly and paying them on your terms, you’ll need to sign a contract with an affiliate network that belongs to the CPS Union (CPS联盟), an advertising network which charges you an advertising fee based on actual sales figures.
Once you sign up, your brand will be promoted on hundreds of websites, with CPS Union charging you a one-time administration fee and then a commission for every sale. It’s a great way to boost brand visibility and put you in front of millions of potential customers, but you should be ready for a sudden explosion in sales should your brand go viral and you sell out.
Rather than working with individuals, affiliate networks cut out the middlemen and effectively serve as advertising platforms. There are positives and negatives to this, though it’s essential you understand your responsibilities and use the tools provided to maximise sales.
An agency can help you plan your campaign to improve your banners and positions.
What’s the best platform?
There are dozens of successful affiliate marketing companies in China, many generating hundreds of millions of dollars worth of sales for their clients. What’s important to note is that not every affiliate marketing platform allows foreign companies to sign up, so unless you have incorporated in China and have a physical presence there, you’ll be limited to these:
- Yiqifa works with a network of more than 600,000 websites, half of which exclusively work with it. Previous clients include JD, Nike, Apple, Amazon, and Microsoft, and it specialises in shopping, entertainment, and web platforms. It says that it works hard to maintain good cooperative relations with its large domestic partners to help advertisers quickly find the most suitable media website for their affiliate campaigns.
- LinkTech is one of China’s top three affiliate marketing firms, with more than ten years of experience. Some of its key partners include Huawei, VIP.com, and Nike. It specialises in cosmetics and companies in the general consumer goods industries.
- DuoMai is another popular choice for Western firms looking to tap into Chinese affiliate marketing, working with more than 100,000 publishers and 1,000 merchants in the country to offer omnichannel marketing and excellent brand exposure. This firm works with companies in the fashion, beauty, electronics, and health industries
What else should I know?
It’s important to note that affiliate marketing will not result in your brand going viral overnight.
It takes time to build brand awareness and sales, so consumers may see your products many times before they eventually click through to your e-commerce store and buy from you.
You should also focus on making your affiliate marketing experience as attractive as possible for both publishers and consumers. Offering generous commissions will ensure your brand appears higher in recommendations and websites, whilst focusing on optimising product photography and literature will ensure as many readers as possible click through and buy.
Tapping into major holiday events and shopping festivals, such as Singles’ Day and Chinese New Year, is another way to ensure your affiliate marketing goes off with a bang. By offering special promotions or discounts during these events, you’ll boost brand awareness and ultimately win new customers. We’ve got a 2020 Chinese Shopping Event Calendar to help.
Finally, you should never press “run” on an affiliate marketing scheme and hope for the best. Though you have more control over costs than you would with other marketing strategies, it is still wise to determine whether the technique makes sense for your business as you grow, as a more direct form of marketing like WeChat or social ads might prove more effective.
Looking to grow your business in China? Reach out to the team at Zudu China today for a free, no-obligation marketing consultation. We’re experts in establishing and scaling brands in the country and can find the best marketing strategy for your e-commerce business.