Indian e-commerce industry is transforming and it is projected that the segment may reach $111 billion by 2024. Indian Brand Equity Foundation (IBEF) states that the growth is basically due to increase in the number of online shoppers. The increase has been witnessed from tier-2 and tier-3 cities. India currently boasts 125 million online shoppers and more 80 million are expected to be added by 2025. The jump is mainly due to the widespread availability of affordable smartphones and data plans. It prompts retail businesses to invest heavily in enhancing customer experiences and expanding accessibility. It is learned that the online retail is set to capture 10.7% of India’s total retail market by 2024.
The e-commerce sector is also facing stiff competition and marketing challenges along with expansion. New e-commerce platforms often emerge without a dedicated marketing department. They even come up with low budgets. Such approaches can waste resources without guaranteeing results. Thriving in a competitive environment means requirement of optimal marketing solutions with affiliate marketing strategy.
Affiliate marketing is a performance-based strategy. Businesses compensate affiliates for driving customers to their sites through promotional activities. Affiliates are usually bloggers, influencers or website owners. They promote products or services to their audience and earn a commission for every successful sale. In other words, affiliates act as sales representatives for the company. They earn a share of the revenue they help generate. Consumers in this digital era heavily rely on social proof when making purchasing decisions. Affiliates have a dedicated following and can influence their audience. Endorsing a product by them on social platforms means adding credibility to the brand. The act effectively shapes consumer buying decisions.
Affiliate marketing is different from traditional marketing methods. It is a cost-effective solution as businesses pay commissions only for actual sales. The model is especially appealing to small and new online businesses as they lack huge capital to invest in branding and sales. Expanding brand recognition is a primary goal for online businesses. Affiliates help in achieving this by driving traffic to e-commerce sites. Hence, brand awareness is increased.
