China Marketing Blog

Affiliate Marketing in China

Wiktoria Marszałek — Thu, 07/19/2018 - 15:57

If you ever wondered if it’s possible to promote your products in China using channels established by other people, then the answer is: yes, it is possible. There are two ways to make it work; option one is working with KOLs (Key Opinion Leaders) – which we talk about here. Option two is affiliate marketing, which, in China, means working with an affiliate network, similar to a popular affiliate called LinkShare used in Western countries.

Note before you even start considering affiliate marketing in China:

  1. You need a stand-alone e-commerce website with Chinese-style online payments (i.e. Alipay or WeChat Pay). No Taobao or JD.com stores are accepted.
  2. Make sure you’re not in one of the sensitive industries, like medical products, VPN or the financial industry.
  3. Affiliate marketing is the best option for brands whose products are already relatively established in China. The more niche the products, the more expensive the commission will be.
  4. Make sure you’re not tight on budget. Affiliate marketing in not a budget option in China marketing.
  5. Have an IT guy on board to help develop the interface.
  6. If you already work with affiliate platforms outside of China then you can’t promote the same website here. So, if you still want to try affiliate marketing in China, you can only promote a different website, like .cn for example (or any other that hasn’t been promoted yet).

 

How Does The Affiliate Network Work

 

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. However, instead of working with the affiliates directly, you sign a contract with an affiliate network which belongs to the CPS Union (CPS联盟). It is an advertising network, where the cost of advertising is calculated based on actual sales. It’s a channel providing the most direct results. CPS Union promotes a brand on many websites at the same time and charges one-time admission fee & a commission based on sales. For example, if we rely on the classic affiliate model, we only advertise on a shopping-guide website like Shenme Zhide Mai (SMZDM) or we rely on a KOL. But thanks to the CPS Union, an ad we create is shared not only on SMZDM but also by Weibo KOLs and other websites. The CPS Union adds more partners and therefore boost the sales and brand visibility.

How CPS Union Works

For example: you sign a contract with Yiqifa and they look for suitable affiliates and negotiate a deal with them. Then, after you sell the product, you transfer maybe… 10% of the revenue to Yiqifa and your part is done. They take care of the payments to the affiliates (KOLs, shopping guide websites, etc.).

You can also work with Chinese affiliates through foreign platforms such as LinkShare. But the more in-between you have, the lower commission is paid to Yiqifa, and the lower the quality of the affiliates – foreign platforms usually work with Chinese networks, not affiliates directly.

 

The Cost of Affiliate Marketing in China

 

I mentioned that affiliate marketing in China is not a budget option – just like most of the marketing solutions in China btw.

Most of the platforms belong to the affiliate networks in China, therefore they work very similarly, and agree on the same fees. The commission you must pay is based on your sales volume, products’ popularity, and the industry. I said 10% earlier, but the commission can go as low as 5% or as high as 40% in the adult products industry.

You must also consider the initiative fee that’s required by the platforms. It’s a yearly fee you pay to the platform so that one may use it – and it’s usually between 20,000 to 30,000 RMB (2,900 to 4,500 USD).

Another thing to consider is hiring an agency to help you with the campaign. Of course, if you have a Chinese person in-house familiar with the topic and with lots of ideas and free time, you could skip this step. Affiliate marketing requires a lot of planning – the better you’re prepared, the better ad position you get, and the higher the chance you get into the promoted page. The agency (or your Chinese staff members) need to plan promotions, product display and banner ads, and negotiate the ad position and commission with the platform. 

 

Affiliate Platforms In China

 

There are five platforms that allow foreign companies:

  1. Yiqifa 亿起发: 30k+ merchants. Affiliates: shopping, shopping guides, entertainment & web platforms etc.
     
  2. LinkTech领克特: 20k+ merchants. Affiliates: cosmetics, entertainment & web platforms etc.
     
  3. ChaNET成果网: 30k+ merchants. Affiliates: shopping
     
  4. WeiYi唯一效果: 40k+ merchants. Affiliates: shopping, entertainment & forums etc.
     
  5. DuoMai多麦: 20k+ merchants. Affiliates: shopping & web platforms etc.

 

Other Considerations To Pay Attention To:

 

  • Affiliate marketing is not a short-term option. Some of our clients didn’t get any sales until the end of their second month.
  • If your products are tax-free – you get an advantage.
  • Make sure you don’t miss shopping festivals like Double Eleven, 618 etc. – prepare special activities for the occasion, offer exclusive coupons, etc.
  • Analyze the results you get from the platform post-completion.

Affiliate marketing is a safe way to boost sales and promote a brand. Many foreign brands have already worked with affiliate platforms, check here.

 

Do you have any experience? Share it with us!

 

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Comments

Many of the US and European affiliate networks also have significant affiliates in China. They tend to be a bit better vetted as the China networks mentioned have a higher acceptance rate and a lower bar for joining their platforms.

Key items to consider are: how they will promote your products. Cash back and coupons are not as valuable for new customer acquisition as comparison, content and KOL. The terms of the affiliate network and technology stack they use to avoid commission fraud, Also, check on payment terms and dedicated account management.

Hi Jeff,

Thanks for the comment. Do you consider the Western affiliate networks to be more reliable to work with?

I'd say Chinese affiliate networks have a better understanding of the market, consumers and affiliates they work with. The Western networks are relatively new to the market, and they are more expensive. Here's an article to relate to: http://chengdujunan.com/bdpmyh/4032.html

Nevertheless, we don't recommend working with the Chinese affiliate networks directly to the companies without an experienced Chinese team. A strong Chinese team or an agency are able to negotiate good terms of the deal. Otherwise, it may be troublesome.

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