There’s a new gold rush in China ecommerce and most brands are not yet a part of it.
This is what happens when you put the largest ecommerce marketplace together with the video platform where China’s people spend most of their smartphone screen time.
China’s most popular short video app, Douyin, has become the place where everyone wants to make money. The app is so addictive that people spend 56-73 minutes per day watching clips that are under a minute long.
Last year, Douyin made an app update to allow content creators to link directly to Taobao. Since then, more and more millionaires have emerged from this platform ….
And this has completely changed the game for Taobaoke, Taobao’s affiliate marketing program. Affiliates earn a commission for every sale they bring to Taobao stores and Douyin became the perfect place for them to do their work.
This article will show you exactly how Taobaoke affiliate marketing works for Douyin, how it has evolved to reach today’s “Douyin ecommerce era” and what this means for brands.
Table of Contents:
- Why Douyin Taobaoke is all the rage
- A brief history of Taobaoke
- How Taobaoke deals for Douyin are made
- The steps for content creators to make it on Douyin
- How brands can take advantage of this (but most likely won’t)
Why Douyin Taobaoke is all the rage
It’s not just because there are over 300 million daily active users spending an hour each day swiping through videos. Obviously, where there’s traffic, businesses will want to get exposure.
Douyin is truly unique because it is known as the FAIR platform for content creators. You don’t go viral just because you’re famous somewhere else or because you have high budgets for video production. The platform decides what is good content, so anyone with a smartphone CAN build a large audience as long as they consistently publish GOOD content and stick to their specific niche.
Combine that with how Douyin made the monetization part super simple with its Taobaoke integration. Viewers get a seamless transition from watching a video to buying directly from Taobao.
Content creators with moderate success could already turn their content into a successful ecommerce business, with close to zero overhead. It’s the new thing everyone wants to do to get rich.
Countless Douyin content creators have showed off their massive success coming purely from Taobaoke commissions.
How Taobaoke deals for Douyin are made
There are usually 4 stakeholders in the Douyin Taobaoke business:
- The business (Taobao/Tmall store)
- A broker (content creator network)
- Individual content creators
- The end consumer
Businesses who want traffic in their Tmall or Taobao store will negotiate with an affiliate broker who manages a network of content creators. The broker will usually ask for an exclusive coupon to make the product offer more enticing to the end consumer, thus more likely to convert.
The broker will then distribute this Taobaoke job to its network of content creators in the right niche. In exchange, the broker earns a small fee from the affiliates for every order they generate. Douyin’s parent company does this through its own platform facilitating collaborations between content creators and businesses. There are also independent agencies who broker affiliate deals for specific niches as well.
The content creators will then somehow include the product into their video based on their own style. It can range from lifestyle vlogs to straight up infomercials. They set up the affiliate link in their video, which then brings visitors into the client’s Tmall/Taobao store.
None of this matters to the end consumer. They’re just enjoying short videos that interest them and if they see a product they like, one tap will bring them straight into the Taobao store without having to manually switch apps.
A brief history of Taobaoke
It’s easy to understand why they call it the “Douyin ecommerce era” with just a little insight into Taobaoke’s history.
When it started in 2009, site owners were the ones who were winning the Taobaoke game. All they had to do was list products on their site and use traditional SEO to make them show up on Baidu, China’s largest search engine. The commission was all theirs to keep.
Then came the sites like Fanliwang that did basically the same thing, but shared those commissions with the end consumers.
Soon, the Taobaoke stage moved to QQ, the messaging app. QQ used to be called OICQ, which looked identical to ICQ back in the day. While ICQ and MSN died over the years, QQ survived. It was only natural for it to become the place to find deals. Affiliates would create lots of niche groups and drop Taobaoke links in them.
Native apps then became super popular. Countless affiliates started making discount deal apps that would help shoppers pay less than full price. The affiliates are basically sharing some of the commissions they earn. By doing this in mobile apps with no risk of getting blocked by WeChat, this was very profitable until hundreds of these apps started popping up.
Then out of nowhere, Douyin showed up and took over. After taking up an hour of everyone’s day, they opened the flood gates to Taobaoke, allowing content creators to quickly monetize on content, without having to deal with the logistical nightmare behind an ecommerce business. End consumers don’t need to copy weird code and manually switch into Taobao to see the product.
This is a truly seamless union of entertainment and shopping. It’s a win for everybody.
End consumers have an enjoyable shopping experience (see this old talk on shopping & entertainment in Taobao).
Affiliates that can generate good content have massive potential to make money.
Store owners only pay commissions on realized sales as opposed to the ever-growing customer acquisition costs in Taobao’s ad platform.
This whole ecosystem continues to attract better quality content and in the end… this type of shopping experience looks like it can only become better.
How anyone can get started making money on Douyin
Understanding how content creators monetize their account is important for store owners to see what can help their Taobaoke strategy.
To be able to sell anything through Douyin, a content creator must first register and qualify as a seller or affiliate. And to do so, they must already have 10 thousand followers that they acquired legitimately.
This means their content needs to be already good enough in the eyes of Douyin’s algorithms, by religiously sticking to a specific niche and accumulating likes/follows/comments from real viewers. The platform’s AI can tell if you buy fake followers.
At that point they can set up their own store within Douyin or link to Taobao or JD… but as you may know…. the overhead in running an ecommerce operation in China is beyond madness.
That’s why Taobaoke is so appealing to everyone: No logistics, no customer service, no design, no SEO or managing ad campaigns. Very low barrier to entry with a serious chance at getting content in front of everyone in China.
But finding the right product is a major challenge for the content creator. Their goal is to make money by promoting some product, but it has to meet some conditions.
First, the product must be directly related to their channel as well as the video they showcase it in.
What’s really difficult is finding a balance between price, quality and conversion rates. To be able to convert, the product can’t be too expensive. On top of that, the product quality and the Taobao store’s logistics need to be at a level where customers don’t get agitated during the buying experience. These are still the same Chinese consumers with very high expectations. If any part of the experience makes them angry, they will retaliate with negative comments in Douyin that can affect future attempts in selling anything.
So where do they go to find the right products that pay good commissions?
The traditional route is to just seek out products suggested by the Taobaoke platform (Taobao Alliance). But the affiliate deals there are all public information and usually don’t pay great commissions.
The best commissions come from direct negotiations with Taobao stores. While Taobao Alliance makes that difficult as they hide contact information, this can happen through some workarounds or brokers like I mentioned earlier.
How brands can take advantage of this (but most likely won’t)
Douyin is still young and full of opportunities. This is clearly the case because the Cost Per Mille is still really undervalued. With 100 RMB, a content creator can boost their video to over 5000 people. That’s only 20 RMB to get in front of the eyes of a thousand people. That’s unheard of in Taobao.
But the real challenge for brands to leverage Douyin Taobaoke is in its organizational structure. Larger companies have strict guidelines and approval processes for publishing any content, even when working with 3rd parties. This could be a deal breaker for many.
Working with influencers, a.k.a. key opinion leaders (KOLs), might be the way to go if only high profile KOLs match the criteria. They’ll most likely have good exposure on Douyin as well as other platforms. But then comes the cost issue. High profile KOLs don’t come cheap. Finding a deal that works for the KOL and still leave acceptable profit margins will be difficult. Aside from the commissions, putting together an exclusive offer and coupons will further diminish profits on the product.
But if a brand can get past those hurdles and find content creators, not necessarily KOLs, that have the right following…
They’ll find that Douyin is full of people that have already built a deep connection with the exact demographics they are looking for. It may take allocating budget, time and a team to get there.. But the Douyin Taobaoke game is still young and there’s plenty of room for brands to find content creators who have the right audience and charge an agreeable commission.