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Is the rise of e-com helping affiliate marketing players?

Rijish Raghavan, Vice-President & Head of Partner Management at Payback India, analyses how today affiliates drive a healthy share of business to e-commerce sites, creating a constant stream of traffic

Rijish Raghavan

India’s e-commerce industry has witnessed a major breakthrough in the last few years. Increasing internet penetration, safe and secure payment modes along with aggressive marketing strategies have all played a significant role in the booming e-commerce sector. With digitisation came the large homegrown e-commerce players such as Flipkart and Snapdeal with a large presence. Seeing the potential that e-commerce promised and the ever-increasing online spends, it wasn’t long before foreign competitors such as Amazon and eBay began entering the market.

The success of such magnitude and increasing focus on profitability led to affiliate marketing programmes becoming popular. It was a win-win situation for both the e-commerce platforms and affiliate marketers; even the customer gained and the business grew. Today, affiliates drive a healthy share of business to the e-commerce site, thus creating a constant stream of traffic and strategically planned rewards are given back to the customer.

Today, almost every top Indian e-commerce store has an affiliate programme. Some e-commerce players run in-house affiliate campaigns, while others prefer to run their campaigns through affiliate networks.

E-commerce has grown by leaps and bounds, driving Indian buyers to shop for all the things that their heart desires. E-commerce giant Amazon, in 1996, was one of the first to use affiliate marketing – Amazon Associates. Its programme became widely known and attracted widespread, global interest and was widely perceived as a model for retailers. The company expanded globally -- their initial phases of bringing the most exciting glossary of products. This global foray of e-commerce websites, bringing the best of products to one home, has become a gigantic business. Soon, companies the world over such as Alibaba from China and Flipkart from India followed suit, thus bringing great brand value to customers, partner’s brands and revenue.

Indians love to save and they negotiate for almost every transaction. They browse for the next bargain, discount, offer or best deal, which will add more points earned to their money spent, thus making online shopping the most popular, on-demand and convenient activity for the millions of people spread across the Indian subcontinent. This is a convenient and more lucrative shopping platform compared to the Brick and Mortar model, where discounts, bargains, and deals are restricted to select time span and products. On the other hand, e-commerce has many new offerings, delivery options – which means one does not have to step out of their homes. Of course for those who are ready to spend immediately, India has COD (cash on delivery), one of the most ingenious payment models adopted in the country. With so many options, e-commerce emerged as the most attractive shopping platform.

Affiliate marketing is a model that offers a great way to acquire quality traffic while keeping the acquisition fee performance based. What that really means is that the affiliates are rewarded for each visitor or customer brought by the affiliate’s own marketing efforts. A retailer or the merchant brings in products from the e-commerce sites, which is then introduced into the network of a site they are tied up with, thus allowing the affiliate to put forward offers and deals on purchase of items and of course, the most important and core player is the customer. Affiliates are one of the best programmes that have come up after the e-commerce boom. They add value to the customer’s pockets with offers, coupons, reward points, and great bargains, hence, generating valuable revenue, while passing back the earning to the customer. On an average, if we look at the generation of business brought into e-commerce by affiliate marketers, it is a rather significant share, roughly 15 per cent-20 per cent. Affiliates work best with conversions, while customer acquisition is at lower cost. This results in return customers who want to shop and earn more rewards points. In a world where the cost of a transacting customer is increasing every single day, the performance-driven nature of affiliate marketing sets it apart.

Affiliates are also a platform that has access to consumer’s data, on account of its nature of business. They have access to many aspects of the consumer’s behaviour like their shopping habits, brand preference, the frequency of purchases, etc. Here, affiliate marketing model plays a key role in driving quality traffic to partners and commission generated is given back to customers in form of rewards, offers, etc., in a much more sharper and targeted way. In such a scenario, affiliates leverage commission structure to reward customers and this makes it an attractive model.

Online shopping boom has led to a gateway to heaven for brands. Affiliates are already geared up for cultivating and retaining customers due to the sheer nature of their business. Given the large customer base and umpteen offers that they bring to the table, most brands and online marketplaces have begun to tie up with more and more affiliates to increase their bandwidth in the business of gaining more customers.

(Disclaimer: The opinions expressed in this article are those of the author. The facts and opinions appearing in the article do not reflect the views of and we do not assume any responsibility or liability for the same.)

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