With over 50% of the world’s retail e-commerce sales, China offers many opportunities for brands looking to reach new customers. The affiliate industry started to gain traction in the early 2000s and has continued to grow since then. Though not as advanced as the US and Europe, affiliate marketing in China has developed, and there are plenty of opportunities for brands looking to expand to APAC. 

Like any new market expansion, brands must tailor marketing strategies to the local market, industry landscape, consumer behaviour and cultural etiquette. 

Country overview

China is the most populous country in the world, with a total population surpassing 1.4 billion in 2019. By June 2019, China’s internet users reached 854 million, with a 60% internet penetration rate. Among that were 639 million online shoppers. Mobile devices are highly popular with a 99.1% mobile usage rate across the country. Due to such high mobile penetration, many consumers prefer mobile payment solutions such as WeChat Pay and Alipay.

With China’s e-commerce revenue exceeding $2 trillion in 2020, digital ad spending is expected to grow steadily to an estimated 94.58 billion USD. While traditional affiliate marketing through networks and affiliates is growing, influencer marketing has soared in popularity through social media networks like Weibo, WeChat, Douyin, and live-broadcast platforms.

1. Industry nuances

The Affiliate marketing industry started in China in the early 2000s, with local affiliate networks controlling the majority of affiliate traffic. Some leading Chinese affiliate networks include Duomai, Yiqifa and Adways. Publishers readily rely on these affiliate networks for the security of commission payments as well as the ability to quickly work with many brands. Brands wanting to reach many affiliate sites at one time will work with multiple networks to grow their share of voice.

Like the US and Europe, traditional affiliate models are popular in China including Loyalty, Voucher and Content. One affiliate model that is thriving in China is influencer marketing. Driven by a growing consumer demand on e-commerce platforms, influencer marketing has evolved to become a channel capable of quickly delivering huge volumes, even in real-time. To tap into this channel, brands can work through affiliate networks or influencer marketing platforms with an existing pool of influencers in various verticals and tiers. China’s influencer marketing industry is considered to be 3-5 years ahead of the rest of the world and a must, for any brand looking to raise awareness in the Chinese market.

2. Communication

The official and commonly used language in China is Chinese (Mandarin). Although English is widely spoken, Mandarin is preferred in business settings and being able to communicate in Mandarin is essential for starting any business relationship and subsequently maintaining the long-term partnership. Having a Mandarin speaker is necessary for any brand looking to expand their affiliate programme to China. 

While emails are used frequently in global business communication, it is not the most efficient option in China. Direct email outreaches usually result in a low response rate. The preferred communication tool is WeChat with 1.151 billion monthly active accounts, followed by QQ Messenger, phone calls and then email. 

3. Chinese culture

China has a long history spanning 5,000 years; throughout this time, it has developed a unique and nuanced culture. It’s imperative to recognise business culture, etiquettes and nuances before engaging with partners in the region. 

Mianzi: The direct translation of Mianzi is “face”, and it carries the meaning of “reputation”, “respect” and “honour”. Chinese culture places a high value on harmony, so people tend to be polite, considerate and respectful. There are some unspoken social rules and etiquettes associated with Mianzi. Open conflict, direct criticism and upfront rejection are avoided as these are considered an ‘unpleasant’ experience and can make people feel they are “losing face”. When working in the Chinese market its important to handle conflict and criticism indirectly and subtly.

Hierarchical order: People in China pay special attention to the hierarchical order; understood as one aspect of Mianzi. Older, more senior, and higher-ranked people command more respect. They’re usually the first one to enter the room, take a seat, be greeted and addressed in the introduction. It’s advisable to check with your contact beforehand about the seniority of any other members present in the meeting and act accordingly. 

Build trust: The trust among the Chinese is relationship-based. Invest time and energy to develop and maintain relationships. After business meetings, it is common to have entertainment such as drinking or karaoke when developing a partnership. So, be open to planning after-work activities, especially in the early stages of the partnership.

4. Business etiquette

When developing partnerships with Chinese networks or affiliates, you need to observe certain business etiquettes. Business cards are exchanged during any introduction and having one side of your business card translated into Chinese is a great way to show dedication to the Chinese market.  

Other business etiquettes include gentle handshakes, addressing with the surname followed by an honorific title (e.g, GM Liu), and avoiding pro-longed eye contact.

China’s e-commerce market has grown steadily over the years and affiliate marketing is growing in popularity, as e-commerce across the country booms. With a high mobile penetration rate and prevalence of mobile payment, the purchasing behaviours of China’s consumers are rapidly evolving, giving rise to new features in affiliate marketing. For businesses looking to expand into China having well-planned strategies with a sound understanding of the Chinese culture and the local marketing landscape is key to survival and success in this market.

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