Affiliate Marketing

Sandeep Raj, Senior Vice President, Affiliate Marketing, Lazada (Alibaba) answering questions from Retail News

As a Senior Vice President for the Affiliate business for Lazada Southeast Asia, I look after the channels user growth and revenues. I was fascinated by the potential of e-commerce in Asia as I was fortunate to be part of the International expansion team for Amazon. Over the past 10 years I have been part of early launch and scaling teams in e-commerce industry.

What recommendations do you have for product owners to successfully promote a product to stay on top of consumers mind?

Product owners should think of the end to end customer journey and how to wow them at every touch point, Since digital touch points are a significant portion of the customer journey these days, product owners should measure impact and carefully assess the RoI in each step

How does Alibaba tap on affiliate marketing to drive customers to their website?

By nurturing and growing high quality channels present in the Southeast Asia market, we work very closely on expanding all types of partners in the eco-system from programmatic partners, advertising networks, news, gaming and utility portals, KOLs to micro and nano influencers, we want to create the eco-system for jobs in Southeast Asia.

How does Alibaba tap on affiliate marketing to drive customers to their website?

By nurturing and growing high quality channels present in the Southeast Asia market, we work very closely on expanding all types of partners in the eco-system from programmatic partners, advertising networks, news, gaming and utility portals, KOLs to micro and nano influencers, we want to create the eco-system for jobs in Southeast Asia.

What are some ways retailers can grow their affiliate programmes?

We work with many retailers and help them onboard as affiliate partners for us, we are creating a win-win model with the brands and sellers and help them tap into their loyal customers who shop on Lazada platform and stand out from their competitors, we also give them the platform and tools that takes them from x to y very fast

How do you measure the success of Lazadas affiliate marketing program?

So I think for us, affiliate marketing is an important channel for overall growth of Lazada. And I would say the number one reason or number one method in which you would measure the success is if you’re able to create a win model between sellers, retailers and brands as one entity and the affiliate partners as the second entity and then the customers as the third entity. Right. So what I mean by that is, number one, you want to make sure that the retailers are. Additional traffic and additional sales by working with our affiliate partners. The second is the affiliate partners are getting the best return on investment, on diverting or sending the traffic and their customers to Lazada’s portal. And then, of course, last but not the least, the customers need to find the best value by working by working with our with our platform or working with our portal through these affiliate partners. They should be able to find the best deals. They should be able to find the best products. They should be able to find the products that they can reach, reach them on time and so on and so forth. So I think that’s one way in which we measure that our affiliate marketing program is successful.

Can you talk us through 3 approaches to growing your Affiliate Program?

I think affiliate marketing is still in early stages in Southeast Asia compared to other developed markets. So in a systematic way, what we’re doing is, number one, we want to grow the content creators segment in Southeast Asia. So that would be, number one, making sure that we’re able to tap into the best and the high-quality content creators and making sure that they work with us.

We give them the right support, we give them the right incentives so that they continue to work with Lazada. The second key approach that we have that we are following is to ensure that we tap into different communities in the Southeast Asian markets that are looking for credible sources of passive income or credible sources of income opportunities. So we work with the likes of young students who are just graduating from colleges. We work with different communities of women or in different parts of Southeast Asia. And we really want to double down on that segment and then grow those segments and income opportunities for these segments of partners. And at the same time, we are also quite conscious that there are many frauds, fraudulent partners surfacing in the market and then calling themselves as affiliate programs, not just us, but also of our competitors as well. And then they claim that, hey, this is another way to earn money and so on and so forth.

So we are also quite conscious of that and we want to spread the message that all the communities and all the all the communities of students and communities of women, we want them to directly come to the Zeta’s Portal and sign up through us. And we never work with any third-party agencies that are promoting through SMS and other mechanisms that they use. So that would be the second and that would be the second approach to grow our affiliate program. And then probably. Probably the third would be we are also working with some of the.

First is definitely the content creators, which also includes the Content Creators segment, includes YouTube YouTubers, it includes Instagram influencers, also influencers on Twitter or KOLs on different social media platforms and so on and so forth. The second is, of course, the communities, the communities which I mentioned, and then probably the third would be we also work with some very good, high quality programmatic partners in the ecosystem that can get us really high quality customers to Lazada’s portal. So I would say these would be the three key approaches that we are using to grow the affiliate ecosystem in Southeast Asia.

How has eCommerce Affiliate Marketing changed over the years and what are some new things we will see in 2022 and beyond?

In fact, the three points which I summarized earlier is a testament to what has really changed in the past few years. So historically, what I’ve seen, because I have seen the affiliate marketing in advanced countries, especially markets like us, when I was working for Amazon.com excuse me, of course, it was like much more at once because those affiliate marketing programs have been there for a couple of decades. Whereas in Southeast Asia, it’s still very early stages, I feel. And that’s what in the past few years, a couple of changes took place. Number one, the top e-commerce companies came up with the affiliate program that that kickstarted the affiliate marketing revolution, I would say. And then what we saw is there was still a lot of new players in the market trying to try to do affiliate marketing. So most of them were primarily blogs and then a couple of other advertising tech companies which were trying to do affiliate marketing in the recent past, especially after COVID, since they realized that affiliate marketing is a credible way to make revenues if you are a business and also make income if you are an individual. We had a lot of new segments of partners that came into the ecosystem. So 2022 and beyond. Yes, number one, we see that it’s going to be a rapid proliferation of the influencers and the key opinion leaders and content creators, which is in line with the creative economy boom that is happening across the world.

So now many individuals foresee themselves as content creators, as a full-time profession, which is quite a welcoming thing to see. And in fact, there was research done in the US that researched of survey done in the US which said what they asked a few kids, what would they like to become when they when they grow up. So historically, people used to or kids used to say, I like to become a doctor. I would like to become a businessman. Now people are saying, I want to become a YouTube celebrity. Right? So which kind of shows the impact that it has on the overall ecosystem. So we see a lot of these segments of content creators and influencers and KOLs growing quite rapidly in the coming years. And second is which I feel is quite particular to the Southeast Asian market is the fact that there are many communities which want to leverage additional income opportunities. And that’s something that we saw with COVID as well. When a lot of people lost their jobs across different Southeast Asian cities, they actually turned to us and then said, Hey, I have some time at my hand. I’m capable of creating a blog. And I have I have a group of friends that trust me, I know I have a social media following.

How can I make best use of this and add value to my follower base? So in fact, they started working with us, some of them on a part time basis and some of them on a full time basis because they didn’t have any other main source of income. In fact, the program was so successful that some of them ended up building their homes out of the income that they just got from a year or two. Right. Which is quite positive and welcoming things for us to see. And we see more of those such good examples of people really turning on to affiliate marketing and using it as a credible source of income to support their families and, of course, grow their wealth in the future. Right. And of course, there are a lot of students who also were, of course, new to the market, and they couldn’t and they couldn’t kind of go and find a job themselves because the overall economy was slowing down. And, not many companies were recruiting. But then we know that these students were quite active in their in their social platforms. They are active on Reddit, they are active on Twitter. They are posting continuously on Instagram. And again, these Gen Z customers are also quite familiar with using e-commerce portals and e-commerce platforms.

So they were also they also signed up to our affiliate programs and then they started seeing good revenues and they started seeing good income because of this program. So this is something, you know, in a way it is a follow up to the previous point, which is the overall the content creator or the creator economy, which is booming. And of course, that economy includes the really the heavyweights those you. Influenza, your kind of your make up or else who are part of that segment? The second segment is mostly, I would say, the micro and the nano influencers who are the. Like people like people like you and me and people like the people who have a group of friends. They like a product. They would like to give you a product and they would like to promote to these their followers or friends. So I would say the second the second factor would definitely be that especially in in in Southeast Asia, where we see this, you know, the aspiring younger people, younger population who are quite aggressive and you’re not quite they are using these opportunities given by different platforms and they’re finding, making, becoming their own bosses and becoming an entrepreneur themselves instead of depending on someone else for a job. So yeah, I think those would be the key trends which I’m foreseeing.

How effective is affiliate marketing in recruiting new customers?

Affiliate marketing is a great channel for new customers of eCommerce or someone who’s not familiar with an eCommerce model to try online shopping for the first time. Right? Because primarily this is a channel which heavily works with really trust building partners. Like, for example, if I want to. If I want to. Compare prices. I work with price competitors. I go to a price comparison site if I’m a new customer because I’m really conscious about how much I’m paying for my first choice. So that helps elevate this element of this element of inhibition that they might have that, hey, maybe I’m paying a higher price on an e-commerce site compared to an offline purchase. Right. And second is again on the topic of price. We also work with a lot of cashback sites in Southeast Asia, which kind of takes away the inhibition of inhibition of making that first purchase so they kind of get their cash back and so on and so forth. And we also work with a lot of fintech companies, a lot of payment companies, again, a lot of banks as well, which are giving a lot of good vouchers and a lot of good incentives for the new buyers to come and transact with us for the first time.

Again, like this, this helps in in elevating the fear in the minds of consumers when especially when they’re making their first transaction. Right. The second the second part is that that’s where the content creators, as the segment comes here, especially the good influencers and the good bloggers who explain in detail about what each platform specializes in and what are some of the good products and good deals that they can get right. So they help us take away the information asymmetry because an e-commerce platform for a new buyer can be quite challenging because there are many products, there are many sellers, here are many payment methods. You know, what should I do? How should I buy it? Which is what preventing a lot of people from making that first transaction. So a segment like Content Creator, they can really go and give the right information to the consumers so that they can actually go and they actually can go and make sure that they’re very clear before they make the first transaction and they make an informed decision and an informed choice, which is what the key segments of affiliate marketing are helping do today to ensure that new customers are transacting on the platform.

In the hopes of supporting your staff and moving them forward decisively and productively, what are the key characteristics for being an effective leader? How has this proven successful for you?

Having had the good fortune of working in big tech companies like Amazon and running my own startups to now working for the Alibaba Group. I’ve seen how the employees or the employees of these companies or the current generation of the workforce that is coming into the into the companies are thinking about work and what work means to them. Right. And how they look at leaders. Right. So I think number one is they definitely look for authenticity. I think if I just look back a couple of decades, Ben, when our when my dad was working in in a in a bank. Right. So, of course, what work meant to him and how the how he was leading a team of people and how he was looking up to his bosses. Well, it’s so different from how the current generation looks at leaders and looks at bosses and subordinates and so on and so forth. Right. I think number one is, is, of course, they want it to be a lot more authentic. And second, this, they want to see that they are learning. They’re the kind of that is a two-way connection. Right. So one is they want to make sure that they are. Also, of course, they want to see that value being added to them to their day to day lives.

And at the same time, they’re able to give back to the company in a way. Right. So I feel it’s really getting to a point where it’s really a balanced approach these days. So previously it used to be that, hey, if you are working for a company, I mean, you’re just supposed to contribute and you just get a paycheck in return, right? So now it’s definitely not the case because there are a lot more opportunities for for people who want to work. Right. And especially I can say from my own experience of working in an affiliate marketing function, I mean, like this is if they don’t like their bosses or they don’t like their job, they can just switch to alternative sources of career, like becoming an content creator or becoming or even starting their own companies. So I think first one is authenticity. The second one is the employees or our team members need to see value being added to them on a day to day basis and not just a paycheck. Right. So they need to they should feel that they are learning every day. They are. They’re building relationships. They’re building connections. And again, at the same time, they also want to see the impact of their work that they’re doing on a day to day basis and how and how it adds value to the company.

So I think that would be the second thing I would say. And third is I feel the boundary between leaders and team members are really narrowing, especially right now. As you can see in many markets, most of the time the leaders are looked upon as like friends or more like colleagues than actually being their bosses. So it’s quite important to be conscious of that, I feel, because at the end of the day. You know, it’s important to kind of build that trust among these among these people as well. So what I what I feel is. The employees or the team members. If the leaders want to gain their respect, they want to see their leaders rolling up their sleeves and getting on their feet, getting on the field and getting things done and lead by example, rather than just sitting in a corner office and then letting people want to do right. So I think I think these are the three things I see as a trend, especially with the great resignation and the shortage of talent that is happening across the world. I feel the leader should be conscious of these three items before they go and recruit their team or they build their team.

How do you evaluate where to prioritize digitalisation across different areas of the business?

So I can speak of for a retailer or a B2C brand, you know, the first area that they should really prioritize digitalization is their is their supply chain. So they need to be absolutely sure what products when they’re receiving the products, what is the price of the products and so on and so forth. So that’s one area of digitization. We see a lot of retailers kind of missing out, which of course can add a huge value because that’s the first part in the overall supply chain or overall chain of selling their products or goods. I would say the second area to digitize would be the customer acquisition or the marketing trend, making sure that they’re using the right tools, making sure that they’re tracking the customers, they’re tracking their buyers and tracking their behavior and ensuring that the buyers are getting the best value for the money that they are spending. So, you know, the digitization here, digitization comes in the form of many marketing technology, marketing automation tools that some of these retailers and brands can sign up to. And I would say the third area where they can digitize is finding a scalable and sustainable way to work with many ecommerce, ecommerce marketplaces or retailers, because now it’s becoming a huge force. And of course, it has been that way in many other developed countries. Even the big brands can’t ignore ecommerce marketplaces as a as a significant channel for them to grow their businesses.

So it’s very important that even the small and medium retailers or mid-level retailers or even some of the high end brands, they really need to know how to scale their businesses on a marketplace platform. Right. And I feel that enough. Training given by the likes of players like Lazada, which goes and educates the market. What are some of the best practices? What are some of the different tools available on the Lazada marketplace that they can use and how to grow their revenues and what kind of dashboards they should use to ensure that and ensure that they are seeing how where their money is being spent and how they’re getting their sales and how they’re getting new customers and so on and so forth. I would say that would be the third area. And then last but not the least, the. Of course, it’s kind of related to the first three points. I feel the retailers can also work on digitizing their digitizing or being better in their data capabilities. And of course, it might sound like a clich, but getting to know end to end what is happening to your products, what is happening to your buyers, what is happening to your customers? Without proper data tracking in place, it can get lost in the in the sea of in the sea of information and the digital explosion that is happening these days. I would say these are the four areas maybe they can work on.

What is your vision for the future of Lazada and which verticals do you foresee the most growth?

I think for Lazada, it’s still very early stage. I mean, not just for Lazada. I feel for all e-commerce companies in Southeast Asia. It’s still very, very early stages for growth. Like, unlike the developed economies where e-commerce accounts for easily like 25 to 30% of the total retail in a specific market in Southeast Asia, e-commerce is still in single digits. Right. So I would say there is a lot of growth possible in the coming few years. In fact, the Google Temasek report predicts that the e-commerce economy will be worth $1,000,000,000,000 by 2030. Right. So which is just which is quite a quite a significant achievement, if you think about it. So $1,000,000,000,000 is probably the top top in economy of top ten countries in the world by probably by GDP. Right. So that is we are just talking about one sector which is contributing to $1,000,000,000,000 by 2030 only in Southeast Asia. Right. So I think overall, you know, we just want to make sure that we are doing the right Lazada is doing the right things for the sellers and brands. Lazada is doing the right things for the for the partners. And last but not the least right things for the customers, so that they can also enjoy the fruits of the good opportunities available in the e-commerce market. So I think that’s our plan.

 

 

 

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