India's e-commerce industry is set to soar, expected to reach $111 billion by 2024, as reported by IBEF. From groceries to furniture, online shopping is becoming increasingly popular among Indian consumers, mainly in tier-2 and tier-3 cities.
With 125 million online shoppers already in India and an additional 80 million anticipated by 2025, the rise is attributed to affordable smartphones and data plans, prompting greater investments from retail businesses. With enhanced customer experiences and broader accessibility, online retail is projected to capture 10.7% of India's total retail market by 2024.
As the new e-commerce sector continues to grow steadily, it encounters challenges in the competitive landscape and marketing strategies. Beyond mere promotion, new e-commerce platforms seek engagement and ROI to succeed in India's increasingly competitive market. Often, without a dedicated marketing department or ample budgets, they opt for ineffective ‘spray and pray’ methods, draining resources. Amidst evolving trends, e-commerce platforms must consistently choose optimal marketing solutions. Among these, affiliate marketing stands out as a favoured option for new online businesses.
Affiliate marketing is a strategy where businesses compensate affiliates for attracting customers through their promotional activities. Affiliates endorse products or services to their followers and receive a commission for successful sales. When customers buy items through affiliate links, commissions are gained. Hence, affiliates act as representatives for the company, earning a share of the revenue.
Affiliate marketing's performance-driven approach has led to significant successes across various industries, from subscriptions to products. Particularly attractive to SMEs and online businesses, it serves as a valuable outsourced marketing channel. By leveraging specialised knowledge, businesses can efficiently reach their target markets, saving resources. This cost-effective strategy boosts traffic and enhances profits effectively.
How is affiliate marketing an effective solution for new e-commerce businesses?
Authentic Recommendations: In today's digital landscape, consumers heavily lean on social proof when deciding on purchases. Publishers with a dedicated following hold significant sway over their audience. Thus, when they endorse an affiliate product, it lends credibility to both the product and the brand, ultimately shaping buying decisions.
Increased ROI: Affiliate marketing offers a higher ROI by paying commissions solely for sales, unlike traditional marketing. Determining ROI is often uncertain. However, affiliate marketing's performance-based model ensures profitability. Small and new online businesses prefer affiliates, paying only for closed sales, not clicks or impressions. It grants direct access to a receptive audience, boosting sales.
Brand Awareness & Reach: Online businesses aim for widespread recognition. Affiliates boost brand awareness and reach by driving traffic to websites. They earn revenue shares, becoming loyal advocates and fostering trust with potential customers. Each affiliate already has an audience, allowing advertisers to tap into new markets. This expands brand reach effectively.
Data Tracking: Affiliate marketing tracking yields crucial insights into customer origins and buying behaviour and is easily accessible via affiliate tracking. This data aids businesses in optimising websites for better conversions and collaborating efficiently with top publishers.
Improves SEO: Affiliate publishers enhance business visibility by linking to the brand's website, improving SEO and organic rankings. Quality content from high-ranking publishers boosts SEO, and sharing engaging content benefits both. Websites like LinkMyDeals facilitate this by publishing e-commerce offers across numerous coupon platforms, generating backlinks and boosting domain authority and brand recognition.
Affiliate marketing can greatly influence brand perception and sales, offering increased exposure for products. While a strong affiliate network is beneficial for new online businesses, it's crucial to be discerning in partner selection. This is where affiliate marketing agencies come in, aiding new e-commerce platforms in making informed decisions within their budget. Moreover, to enhance their affiliate marketing efforts, new e-commerce platforms can utilise tracking and optimisation tools for real-time monitoring and analysis of campaign performance.
(The author is the Chief Technology Officer and Director at Sellergize)
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