The impact of affiliate marketing strategies on e commerce companies in viet nam 2022

MINISTRY OF EDUCATION AND TRAINING STATE BANK OF VIETNAM BANKING UNIVERSITY OF HO CHI MINH CITY LE YEN BINH THE IMPACT OF AFFILIATE MARKETING STRATEGIES ON E COMMERCE COMPANIES IN VIETNAM GRADUATION T.

MINISTRY OF EDUCATION AND TRAINING STATE BANK OF VIETNAM

BANKING UNIVERSITY OF HO CHI MINH CITY

LE YEN BINH THE IMPACT OF AFFILIATE MARKETING STRATEGIES ON E-COMMERCE COMPANIES

IN VIETNAM

GRADUATION THESIS

MAJOR: BUSINESS ADMINISTRATION

CODE: 7340101

SUPERVISOR: PhD TRAN HAI VAN

HO CHI MINH CITY – 2022

MINISTRY OF EDUCATION AND TRAINING STATE BANK OF VIETNAM

BANKING UNIVERSITY OF HO CHI MINH CITY

LE YEN BINH THE IMPACT OF AFFILIATE MARKETING STRATEGIES ON E-COMMERCE COMPANIES

IN VIETNAM

GRADUATION THESIS

MAJOR: BUSINESS ADMINISTRATION

CODE: 7340101

SUPERVISOR: PhD TRAN HAI VAN

HO CHI MINH CITY – 2022

STATE BANK OF VIETNAM BANKING UNIVERSITY OF HO CHI MINH CITY

hỗ trợ cho những nghiên cứu của các tác giả sau này

Từ khóa: Tiếp Thị Liên Kết, Chiến lược Marketing, Thương Mại Điện Tử, Digital Marketing

ABTRACT

Affiliate Marketing has become a key strategy considered for most companies involved in the e-commerce sector in Vietnam Currently, with the development of technology, it has created favorable conditions for measuring advertising performance and settling payments between participants for e-commerce businesses when applying an affiliate marketing strategy This study was conducted to determine the impact of many characteristics of affiliate marketing strategy on the intention to apply affiliate marketing strategy in marketing activities of e-commerce organizations The data was collected through the online questionnaire Google Survey and the sample size was 220 To analyze the data, the author used SPSS software Based on the analyzed data, the characteristics of affiliate marketing include: Performance Measurement, Consumer Trends, Promote Purchase, Cost Saving, Advertising Effectiveness of aspects of the business The characteristics of affiliate marketing has a significant impact on the intention to use the affiliate marketing strategy on e-commerce platforms Finally, the study outlines applications, recommendations as well as areas of research that have not been done

to support future research by the authors

Key words: Affiliate Marketing, Marketin Strategies, E-commerce, Digital Marketing

DECLARATION

I declare that this thesis was written entirely by me and that it has not previously been presented, or in whole part, in any prior application for a degree Unless otherwise stated by reference or credit, the material given is collected by myself The research was carried out at the Banking University of Ho Chi Minh City, Vietnam, under the supervision of Ms Tran Hai Van

Thesis’s Author

Le Yen Binh

ACKNOWLEDGEMENT

First and foremost, I would like to express my heartfelt gratitude to my supervisor, Mrs Tran Hai Van, for providing me with important information as well as good recommendations for my bachelor's thesis, as well as for his patience, enthusiasm, and inspiration Furthermore, I am grateful to not just the professors and lecturers from Banking University of Ho Chi Minh City who supplied me with vital information and skills throughout my time there Last but not least, I also want to thank the examiners for devoting their significant time to reviewing my thesis

TABLE OF CONTENTS

CHAPTER 1 INTRODUCTION 14

1.1 Background of the study 14

1.2 Research aims and research objective 15

1.2.1 The study’s aims 15

1.2.2 Research objective 16

1.3 Research Questions 16

1.4 Research Methodology 16

1.5 Structure of the thesis 16

CHAPTER 2 LITTERATURE REVIEW 19

2.1 Concepts and Definitions 19

2.1.1 The growth of E-commerce in the world and Vietnam 19

2.1.2 Social media background 20

2.1.3 Online Advertising 23

2.1.4 Affiliate Marketing and Affiliate Marketing Strategies 26

2.1.4.1 Affiliate Marketing Concept 26

2.2 The market situations 30

2.2.1 The success of e-commerce companies utilizing affiliate marketing strategies 30

2.2.2 Theory of Critical Success Factors of Online Affiliate Model 31

2.3 Previous Empirical Studies About Affiliate Marketing Strategies 32

2.3.1 The research of Zurina Patrick and Ong Choon Hee (2019) 32

2.3.2 The research of Ehab Kamal Haikal and Tareq N Hashem (2020) 33

2.3.3 The research of Indrajit Ghosal et al (2019) 35

2.3.4 The research of MH Abdelhaly, NM Kamal and HA EI Samie (2020)

36

2.4 Hypotheses and Conceptual Model 38

2.4.1 Hypotheses 38

2.4.2 Research Model 44

CHAPTER 3: THE RESEARCH METHODOLOGY 46

3.1 Research process 46

3.2 Research methods 48

3.3 Sample description 50

3.4 Survey design 51

3.4.1 Scales used in survey 51

3.4.2 The questionnaire design 51

CHAPTER 4 RESEARCH RESULT 56

4.1 Sample description 56

4.2 Testing the reliability of Cronbach’s alpha 58

4.2.1 Tracking Performance 58

4.2.2 Consumer Trend 59

4.2.3 Promote Purchase 60

4.2.4 Cost 61

4.2.5 Effectiveness 62

4.2.6 Intention 64

4.3 Exploratory Factor Analysis – EFA 64

4.3.1 Independent Variables 64

4.3.2 Dependent Variable 67

4.4 Pearson correlation analysis 70

4.5 Multivariate Regression Analysis 71

CHAPTER 5 CONCLUSION AND IMPLICATION 77

5.1 Conclusion 77

5.2 Implication 81

5.2.1 Academic implications 81

5.2.2 Practical implications 81

BIBLIOGRAPHY 83

LIST OF FIGURE

Figure 1: Global Digital Overview January 2022 DataReportal 20 Figure 2-Six categories of e-communication tools or media channels _ 24 Figure 3-The basis process of affiliate marketing _ 28 Figure 4-Theory of Critical Success Factors of Online Affiliate Model 31 Figure 5-Proposed Theory framework Source: Factors Influencing the Intention to Use Affiliate Marketing: A Conceptual Analysis (Zurina et al, 2019) _ 33 Figure 6- The research of Ehab Kamal Haikal and Tareq N Hashem (2020) 34 Figure 7-Conceptual diagram showing the relation of affiliate marketing and its impact on 35 Figure 8-Proposed Research Model 45 Figure 9-The research processes 48 Figure 10-Histogram _ 74 Figure 11-Q - Q Plot chart _ 75

LIST OF TABLE

Table 1- Tracking Performance _ 52 Table 2-Consumer Trend 52 Table 3-Promote Purchase _ 53 Table 4-Cost 53 Table 5-Effectiveness _ 54 Table 6-Intention 54 Table 7- Gender distribution _ 56 Table 8- Age group distribution _ 56 Table 9- Income distribution _ 57 Table 10-Reliability Statistics of Tracking Performance 58 Table 11-Reliability Statistics of Consumer Trend 59 Table 12-Reliability Statistics of Promote Purchase _ 60 Table 13-Reliability Statistics of Cost 61 Table 14-Reliability Statistics of Effectiveness _ 62

Table 15-Reliabilty Statistics of Intention _ 64 Table 16-Rotated Component Matrix of independent variables 65 Table 17-KMO and Bartlett’s test of independent variable 66 Table 18-Total Variance of independent variable _ 66 Table 19-EFA analysis results for dependent variable _ 68 Table 20-KMO and Bartlett’s test of dependent variable _ 68 Table 21-Total Variance of dependent variable _ 68 Table 22-Correlations Coefficient Pearson Correlations 70 Table 23-Model Summary _ 71 Table 24-The results of analysis of variance ANOVA _ 72 Table 25-Coeficients _ 72

SYMBOLS AND ABBREVIATIONS TABLE

CHAPTER 1 INTRODUCTION 1.1 Background of the study

Affiliate marketing has evolved into a critical strategic consideration for all commerce businesses Previously, it was simply understood as a link attached to a social media post, with the goal of making it simple for users to purchase a product and increase business revenue However, as social networks have grown in popularity over the last decade, marketers have developed more nuanced perspectives on this type of affiliate marketing

e-Social media has become an integral part of most Vietnamese people's daily lives in recent years, owing to the country's increasing smartphone and internet penetration rates Because of its highly connected and young, digitally savvy population, the country has among the highest number of social media users in the world According to a report by Statista, Vietnam has a population of about 100 million people, with 72.10 million social network members in January 2022 In 2021, roughly 95% of Vietnamese internet users will be using Facebook, making it the country's most popular social media network (KEMP, 2022) At the same time, Zalo, a local messaging app, has constantly surpassed major global giants such as YouTube and Instagram as the second most popular social network Social media networks' popularity fluctuates from generation to generation While millennials and Gen X favor Facebook and Zalo, Gen Z uses foreign networks like Facebook, YouTube, and Instagram at a far higher rate Furthermore, TikTok is gaining traction among the country's younger social media users, with over half of this age group's internet users reporting that they use the network

Apart from their original purpose of connecting people, social networks are today viewed by brands and consumers around the world as sources of information, brand communication outlets, advertising platforms, and even marketplaces Many businesses in Vietnam rely on social media-based methods such as influencer marketing and social commerce to succeed Influencer marketing enlists the help of

well-connected individuals, often known as influencers, to influence consumers' quantifiable behaviors and, ultimately, purchases of promoted products on social media platforms In 2020, over 84 percent of Vietnamese people said they followed

at least one influencer on social media, and 77 percent said they had purchased anything because of an influencer's sponsorship (Nguyen, Social media in Vietnam

- statistics & facts, 2021) Social commerce, on the other hand, transforms these sites into real-time selling and buying platforms that allow for direct contact between users In Vietnam, this type of commerce has seen an exponential increase

in the number of orders placed in 2020, demonstrating the promise of social media

as a future one-stop-shop for Vietnamese As a result, affiliate marketing is becoming one of the most important tactics for prominent e-commerce companies

in Vietnam, such as Lazada, Tiki, Shopee, Shopee,

Realizing that there have not been many specific studies on this case, the author chose this study to analyze and discuss the impact of affiliate marketing strategies

on e-commerce company in Vietnam

1.2 Research aims and research objective

1.2.1 The study’s aims

- To determine the impact of affiliate marketing strategies on e-commerce companies in Vietnam

- To identify the elements of an affiliate marketing strategy that influence the growth of e-commerce

- To analyze insights of customer groups who decide to buy through affiliate marketing links

- To provide solutions for e-commerce companies to be more effective in using affiliate marketing as a mainstream strategy

1.2.2 Research objective

The object of the research is "The impact of affiliate marketing strategies on commerce companies in Vietnam”

e In term of space: sellers and buyer on ee commerce platforms in Vietnam

- In term of time: limited from March 2019 until May 2022

The study's goal is to examine the factor impact on intention using affiliate marketing of e-commerce companies in Vietnam, as well as to assess the level of influence of each aspect on the intention to use affiliate marketing strategies On that premise, the study suggests several approaches to innovate and increase quality

in order to develop an affiliate marketing plan

The thesis use both qualitative approach and quantitative approach:

- In terms of qualitative approach: the author determines the impact of affiliate marketing strategies on e-commerce companies in Vietnam synthesizing the results of previous relevant studies both globally and in Vietnam, then using survey tools such as questionnaires sent directly by email, questionnaire survey, google form,

- In terms of quantitative approach: The techniques used with the support of SPSS software including descriptive statistics, Cronbach's alpha coefficient, Exploratory Factor Analysis (EFA), correlation analysis

1.5 Structure of the thesis

The thesis including 5 chapters

hypotheses on social media influencers, influencer marketing, buy intent, and a number of previous studies on the subject

Chapter 3: Methodology

After establishing a theoretical framework, the author proceeds to develop a research model and research methodology The author also includes information about the steps of the research procedure as well as detailed questionnaires for conducting the survey in this section

Chapter 4: Result

Chapter 4 specifically for data processing procedures using SPSS software and other testing methods This section will also introduce the contents of descriptive statistic, test the reliability of the scale using Cronbach's Alpha coefficient, Exploratory Factor Analysis (EFA), regression analysis, test the

research model's Hypothesis, and determine the difference throughout customer purchase intention

Chapter 5: Conclusion

Based on the preceding analysis results, the author will provide recommendations in this last chapter to improve and boost consumer's purchase intention towards cosmetic products Furthermore, the author highlights the research's shortcomings and provides a future vision, pointing out the benefits that the research makes to society

CHAPTER 2 LITTERATURE REVIEW 2.1 Concepts and Definitions

2.1.1 The growth of E-commerce in the world and Vietnam

The demand for a more convenient living has increased in recent years as a result of the advancement of contemporary technologies, the most important of which is shopping This has fueled the rapid growth of e-commerce enterprises all over the world Opportunities continue to emerge in the new eCommerce landscape; however, competition has driven the return on all aspects of this landscape to plummet, such as the conversion rate of digital ads and the longer break-even period for new merchants to achieve Meanwhile, customer demands and expectations are increasing, such as increased product availability and customer service, a more transparent ordering procedure and handling, greater brand integrity, and so on With more brands investing in video and live shopping, social commerce is now at the center of online shopping for customers from all over the world to obtain highly visualized informational export and quick-access to the available items and services supplied Direct-to-consumer (DTC) services are also looking towards online communities to improve close relationships with customers in order to better engage them, raise retention rates, and prevent ballooning ad campaign costs (Verdon, 2021)

According to a prediction of Statista, Southeast Asia's internet economy is expected

to triple in value over the next few years (Department, 2021), with e-commerce accounting for the majority of that value Vietnam's e-commerce market value reached over 12 billion US dollars in 2020 (Nguyen, E-commerce market value in Vietnam from 2014 to 2020, 2022), ranking only behind Indonesia, Thailand, and Singapore as one of the region's fastest-growing digital economies The current digital population in Vietnam, as well as expanding internet penetration, provide

20

ideal conditions for commerce enterprises to thrive As a result, the country's commerce proportion of total retail sales is rapidly expanding, and online channels have exceeded traditional retail channels in terms of growth within the FMCG industry

e-Vietnam's e-commerce is catching up to its ASEAN rivals, with the country ranked 86th in the United Nations E-Government Survey for 2020 The country rose two positions among 193 countries, and it is working hard to improve its e-governance, with the goal of being among the top four Southeast Asian countries by 2025 Its 40 million online shoppers spend an average of US$210 per year, making it the second-largest e-commerce market in the area With increased internet access, smartphone use, and more trust in online buying, Vietnam's e-commerce business is predicted to rise in the near future (Bhatla, 2020) In an article by Vietnamplus, by

2025, the Vietnamese market is predicted to treble from 13 billion USD last year to

39 billion USD In addition to that, the pandemic has caused significant changes in customer behavior and purchasing habits, with 58 percent of the Vietnamese saying they will continue to shop on online marketplaces because it is more convenient This tendency is expected to persist in the future, as 53% of respondents said that internet shopping has become a part of their daily routine (VNA, 2022) According

to iPrice Insight about the Map of Ecommerce in Vietnam, Shopee is perhaps the most popular e-commerce platform in Vietnam, with nearly 70 million monthly visits, followed by thegioididong with over 30 million visits and Tiki with approximately 22 million visits (Insight, 2021)

2.1.2 Social media background

The rapid development of social media platforms has forever changed how different

buyers engage with one another and with businesses As a result, organizations' approaches to attracting and retaining new clients have altered (Leung et al., 2015) Previously, advertisers would create captivating advertising messages and purchase media space in the hopes that buyers/ prospects would become aware of, develop an affinity for, and purchase the brand By changing the ways in which purchasers select, exchange, and evaluate information, social media has unavoidably altered marketing communications Traditional media, such as television and newspapers, have lost continuous viewing and reading as a result of the rise of social media, and their effectiveness as marketing platforms may have dwindled Because of the speed

of online communication and the variety of information sources available, traditional methods of promotion are becoming less important Advertisers also rapidly recognized the impact of the social network on the instinct that includes transformed territories, shopping experiences, and information search in general (Chandra, 2014)

In 2022, social media has roughly 58.4 percent of the world's total population, with more than 4.62 billion users A typical person has accounts on over 17 different social media platforms and spends an average of 2 hours and 27 minutes every day

on social media (Chaffey D , 2022) Cell phones are used by 91 percent of social media users, making it critical to deliver content that is compatible with mobile devices Instagram stories are the new social media darling Instagram stories grew from 150 million to 500 million daily dynamic watchers in just two years For a long time, Facebook and Instagram have dominated social media as the most popular sites In any case, a few additional strong social platforms have emerged in recent years and have quickly risen to prominence Instagram outperforms every other platform in terms of user engagement Visual material is 40 times more likely

to be shared on social media networks such as Facebook, Twitter, and Instagram Facebook posts with less than 250 characters receive 60% more attention

In one of their research on the youth's adoption of social media, Dunlop et al (2016) suggested that social media has been adopted as a daily activity rather than

an hourly activity Many other research have previously emphasized the necessity

of studying consumer behavior The researcher additionally emphasizes the association between youth's social behavior and their behavioral objectives in commercials (Dunlop, 2016) The study then goes on to discuss health issues and how youth are exposed to the promotion and marketing of various products, both good and bad, that have an impact on consumers' health As a result, there is a strong need to create engaging content for social media aimed at improving adolescents and young adults's health It has been contested that the youth do not see the connection between their behavioral objectives and the informative substance of online marketing, which leads to skepticism of commercials As a result, a relationship between the peripheral route and the major theme of online advertisements must be developed (Ghai, 2018) Social media advertising is significant both in terms of generating income for businesses and in terms of lowering the cost of traditional marketing operations It is possible to forecast the future and actually prevent any type of problem, as well as be creative and track the competition's performance, thanks to social media

Social media are platforms on which people develop networks and share information and/or sentiments in a marketing setting (M.Kaplan & MichaelHaenlein, 2010) Social media have caused three major transformations in the marketplace due to their unique character as "dynamic, networked, egalitarian, and interactive organisms." (KayPeters, YuboChen, M.Kaplan, BjörnOgnibeni, & KoenPauwels, 2013) Social media marketing is the most recent trend to emerge in recent years, when it began to dominate internet communication It's a type of online marketing that makes use of a variety of social media channels to reach marketing and advertising goals For the purposes of advertising, social media marketing entails the sharing of content, videos, and photographs Businesses utilize

a variety of marketing tactics to target the correct audience, engage in consumer

online brand activities, and spread electronic word of mouth (Singh & Singh, 2018)

In terms of efficiency and targeting, social media platforms are advantageous In terms of the first argument, the cost of launching a social media marketing campaign is typically less expensive than traditional approaches such as face-to-face interactions with salespeople In fact, businesses may run successful social media marketing campaigns on a shoestring budget because most social media tools for business are free, as opposed to more expensive traditional methods Furthermore, it is feasible to increase market share by addressing clients who were previously unavailable due to time and location constraints (Valerio, William, & Noémier, 2019)

In the e-commerce market, e-commerce enterprises must always spend in marketing efforts and adapt to the changes of the digital world in order to acquire a certain place in the market For example, Lazada has the largest market share in four of Southeast Asia's six markets, ranking second in Vietnam and fifth in Singapore Lazada virtually always features in large-scale sales efforts across all media, including television, online newspapers, newspapers, Google search terms, website banner ads, social media, and so on The company also improves the website interface on a regular basis to make it easier for clients to find the products they want and to reduce the number of steps required to place a purchase Every customer click is valuable to Lazada, and they use it to efficiently target and retarget customers who have been and are interested in products in order to increase consumer demand (Hanh, 2022)

2.1.3 Online Advertising

Digital marketing is primarily concerned with managing a firm's online presence via company websites, social media pages, and mobile applications Search engine marketing, social media marketing, online advertising, email marketing, and collaborations with other websites are all examples of how these might be combined

with online communication approaches These approaches can help you reach your goal of attracting new clients and providing new services to them (Chaffey D a.-C., 2019) The term "online marketing" refers to a set of tools and methods for promoting items and services over the internet When compared to traditional marketing, online advertising offers advantages such as increased growth potential, lower costs, elegant messaging, greater campaign control, better customer service, and a competitive advantage (Priya M, 2018) Customer data is used in effective online advertising programs, and CRM systems are used to manage the customer relationship Online marketing serves as a link between potential customers and elevates business development above and beyond traditional marketing The technical tools of the internet, as well as the creativity of the advertiser, make up online advertising It also encompasses design, development, sales, and advertising,

Figure 2-Six categories of e-communication tools or media channels Source: Digital marketing: strategy, implementation & practice

(Chaffey D a.-C., 2019)

with a concentration on E-commerce, lead-based websites, affiliate marketing, and local search as major business models (Boricha, 2020)

Online advertising is a type of mass communication that is based on traditional advertising but develops its own communication methods in response to new technological and medium-based constraints Online advertising, in its broadest sense, refers to the delivery of adverts to Internet/online users via Web sites, e-mail, ad-supported software, and Internet-enabled smart phones Contextual ads on search engine result pages, banner ads, Rich Media Adverts, Social Network Ads, interstitial ads, online classified advertising, advertising networks, and email marketing, including email spam, are all examples of online advertising (Deshwal, 2016)

The internet, hyper-connectivity, and Web 2.0 have all resulted in a shift in perspective Rather than being the recipient of a communication, an exchange occurs inside a brand's network of potential customers This link has a substantial impact on people's observing and purchasing decisions (Laureti, 2018) In the way

we communicate, think, and exchange encounters as a human civilization, online social platforms are a fresh and transformative miracle The omnipresence and variety of technological platforms that enable these systems, as well as the development in communications and the technification of society, have all contributed to the massive penetration and online time dedicated to the use of systems that has been normalized For example, Facebook has 2.93 billion active users around the world, in excess of 90 percent of them associated through portable platforms

An advertisement is an audio or visual kind of marketing communication that uses a clearly sponsored, non-personal message to promote, sell, or advertise a product, service, or concept In the present day, online advertising is a relatively new and rapidly expanding marketing instrument (Gurbanov, 2020) Display and search ads are the two types of online ads Banners, simple text, media rich content, and video

ads are all forms of online display advertising On search engines like Google, online search advertising is displayed alongside organic results Many key characteristics of both display and paid search advertising include the ability to provide brand information, a direct response component that prompts immediate responses from customers, and individual targeting that allows businesses to approach prospects at the right stage of their buying decision and direct them to purchase online Consumers' responses to online advertising are greatly increased as

a result of this (Bayer, 2020)

The latter two traits lead to a more effective response system to certain types of internet advertising, as well as the ability to measure individual customer impact According to studies on internet advertising, there are both short and long term consequences on a firm that appear across the two types of online advertising (Sridhar, Shrihari, & Grewal, 2016) This study also shows that paid search and display advertising, which is online advertising, has a higher positive impact on sales from a company's standpoint than traditional offline advertising The study also found that paid search advertising has larger effects to display advertising, and that it is superior than offline advertising in terms of consistent targeting abilities over time Although tracking, advertisement placement, and increased targeting are common features of both online display and search ads, search ads have a greater positive impact on sales than display ads The latter is preferable since the client initiates the search, which occurs very close to the buying decision Businesses employ search for performance marketing in such circumstances, with the goal of directly generating sales response (Bayer and colleagues, 2020)

2.1.4 Affiliate Marketing and Affiliate Marketing Strategies

2.1.4.1 Affiliate Marketing Concept

Affiliate marketing, according to Gallaugher et al (2001), is a sort of internet advertising in which merchants share a percentage of sales revenue earned by each consumer that visits the company's website via a content provider A content

provider is an affiliate who typically places online advertising on its website, such

as a banner or text link Affiliate marketing is a type of online marketing in which a company (an advertiser or merchant) signs a contract with another company (a publisher or affiliate) to place a link to its website on linked sites (Gallaugher, 2001)

Affiliate marketing is a type of performance-based marketing in which a merchant's items are promoted through an affiliate network in exchange for a commission on sales or lead conversions In this context, an affiliate or publisher is a person or a company who promotes a merchant website's products or services by giving links and publishing advertisements on their website An affiliate accomplishes this by joining an advertiser's affiliate program, giving links, banners, or adverts, and inserting them into the website (Ivkovic, 2010)

In general, affiliate marketing, also known as associate marketing, is a business arrangement in which an advertiser pays a fee to an affiliate for traffic or sales generated on a website, as defined by Ivkovic (Ivkovic, 2010) According to Janssen

et al in 2007, this popular, modern performance-based sort of internet marketing entails the company compensating affiliates for customers referred through affiliate marketing (Janssen, 2007) Affiliate marketing, according to Juriová, is a performance-based marketing model based on the number of clicks This arrangement, according to Kim, Dohoon, allows the affiliate to post links, banners, and adverts of services or items from the merchant's website (Kim D , 2013) Customers, affiliates, and merchants or advertisers are all involved in affiliate marketing, according to Kim, Young Ae, and Jaideep Srivastava identify a merchant or an advertiser as a firm selling online services such as tourism or insurance or products such as airline tickets, business products, or consumer products (Kim Y A., 2007), according to Maraqa's research "The Impact of Jordanian Banks Websites' Quality on Customers' Satisfaction." Tourism and tourism are examples of products (Maraqa, 2018) In addition, "An Empirical

Study of Affiliate Marketing Disclosures on YouTube and Pinterest Computer Interaction Proceedings of the ACM "In 2018, Mathur et al defined an affiliate as a person or company who promotes a merchant website's services or products via the internet by giving links or publishing advertisements As a result, the quality of a website is a critical component that might influence client happiness Customers, as defined by , are third parties who visit an affiliate's website to click on links or advertisements that they find valuable, or to redirect them to the merchant's website In this situation, affiliate marketing models such as

Human-ad banners, product reviews, coupons, offline affiliates, and loyalty/incentive are employed to inprove websites (Prussakov, 2007)

According to a research of Ali Norouzi about ―An integrated survey in affiliate

marketing network‖ in 2017, The affiliate marketing method is first introduced,

followed by a discussion of the stakeholders involved in the process and their roles (Norouzi, 2017) The parties are thoroughly examined, as well as an introduction to

Figure 3-The basis process of affiliate marketing

Source: An integrated survey in affiliate marketing

network (Norouzi, 2017)

advertising tactics and commission payment mechanisms The risks of affiliate marketing are also discussed, as well as the top-performing affiliate schemes

2.1.4.2 Affiliate Marketing Strategies

We capture simplified advertising information flow in today's marketing The recipient of an advertisement observes it from all angles The tendency in marketing communication is for closer touch with the recipients This is especially true in the case of online marketing People supply the most intimate information that today's technology can filter to their advantage through social networks However, there is still a connection between the corporation and its customers Personal selling is essentially transferred to the online world through affiliate marketing Globally, it can be considered a sort of marketing that began in the 1990s, but in essence, it brings something that has resurfaced as a popular trend today It brings another man who has nothing to do with the firm into the relationship between the company and the consumer, and the recipient considers this (Jurišová & Vladimíra, 2013) Today, according to Bigcommerce, Affiliate marketing is a well-known strategy for increasing sales and generating significant online revenue The new push toward less traditional marketing tactics has been extremely beneficial to both brands and affiliate marketers On the other hand, affiliate marketing is the process by which

an affiliate earns a commission for promoting the products of another person or company The affiliate simply looks for a product they like, promotes it, and earns a percentage of the profit from each sale Affiliate links from one website to another are used to track sales (Enfroy, 2022)

The majority of sponsor-affiliate relationships are managed by several major networks The networks provide the technology for affiliate activity management, tracking (when an affiliate directs a potential customer to an advertiser's website), and transaction support They also oversee the calculation of commissions and, in most cases, the distribution of payment(s) to affiliates as well as the distribution of invoices to affiliates for payments made The networks also make it easier to

manage application processing (when an affiliate wants to join an advertiser's affiliate marketing program) and the process of providing affiliates with access to ads (e.g., banners, text links, product data file, etc.) so they can adequately promote the sponsor's products (MAZUREK & KUCIA, 2011)

2.2 The market situations

2.2.1 The success of e-commerce companies utilizing affiliate marketing

strategies

Lazada Malaysia, an E-commerce platform that provides a fast, secure, and convenient online shopping experience with a diverse product offering range, has been attempting to connect with Influencers and KOLs (Key Opinion Leaders) in order to promote their brand and attribute the effectiveness of these Influencers and KOLs For Lazada Malaysia, affiliate marketing was an untapped source of media

As a result, Involve organized and planned an influencer and key opinion leader activation initiative for Lazada Malaysia Lazada Malaysia had only 9% of Partners

on Involve’s platform, which were classified as Influencer and KOL Partners Their primary goals are to boost Lazada's e-commerce sales and brand awareness among Southeast Asian influencers and key opinion leaders Furthermore, the firm wants to increase partner participation on a marketplace platform This campaign ran from July 2020 to July 2021 It is currently evolving and optimizing to date Involve only charges clients based on performance so there was no specific budget for this campaign Partner participation climbed to 511 percent after a year of onboarding, education, and account optimizations The number of sales conversions each Partner was able to achieve nearly doubled Through product reviews and recommendations, influencers and key opinion leaders were able to uncover and promote niche brands and goods to their following, resulting in a 2.5x boost in conversion rates Within a year, Partners were able to regularly deliver the strongest promotions and sales thanks to planned marketing efforts during double-digit sales, local celebrations, and universal shopping occasions Influencers and KOLs

delivered 45 percent of click traffic in July 2021, compared to 19 percent in July

2020 Influencer and KOL Partner sales account for 81 percent of Lazada Malaysia's gross sales (Asia, 2021)

2.2.2 Theory of Critical Success Factors of Online Affiliate Model

The study was carried out by Julie Wolfe et al in 2009 (Bandyopadhyay, Wolfe, & Kini, 2009) It is one of the earliest studies that lays out the factors central to the development of an affiliate marketing model From there, the article shows how to manage an affiliate marketing program network and how to measure the effectiveness of each affiliate marketing campaign The Internet is a living, breathing medium As a result, online affiliate models must be adaptable in order to keep up with current industry developments In the near future, what works today for online affiliate programs may become obsolete It is crucial to select an affiliate

that is a good "match" for your business, maximizes earnings, is simple to use and

Figure 4-Theory of Critical Success Factors of Online Affiliate Model

track referrals, and monitors and updates the factors on a regular basis It is obvious that affiliate models are a crucial component of your website that will aid in its development Therefore, in this research, the author showed 7 key success factors for online affiliate model:

The success characteristics of an affiliate marketing strategy have been the same for corporate organizations using an affiliate marketing model for decades Because digital marketing activities are becoming increasingly interesting in the digital era,

it is critical to assess the effectiveness of an affiliate marketing plan for a firm This claim will be investigated in this thesis by using this theory as a theoretical foundation and putting a piece of the theoretical model to the test in the Vietnam market

2.3 Previous Empirical Studies About Affiliate Marketing Strategies

Affiliate marketing is a new e-commerce marketing approach that appears to have more long-term promise than prior online marketing initiatives It's a kind of open market where creative internet marketers can make money by operating as free-lance sales people for tens of thousands of online firms Advertisers profit from a predictable marketing expense expressed as a proportion of sales

The studies listed below were conducted in other countries to confirm the relevance

of implementing an affiliate marketing strategy in the digital era and e-commerce integration

2.3.1 The research of Zurina Patrick and Ong Choon Hee (2019)

In “Factors Influencing the Intention to Use Affiliate Marketing: A Conceptual Analysis” was implemented by Zurina et al in 2019, the study only looked at three dominant factors that influence behavioral intentions to use specific technology (i.e affiliate marketing): relative advantage, compatibility, and observability Relative advantage is defined as the level at which current practice is perceived to be less advantageous than innovation, and it is associated with a variety of facilities,

satisfaction, social, and economic diversity Compatibility is the degree to which an innovation is perceived to be consistent with previous ideas, socio-cultural values,

or perceived to be necessary On the other hand, observability is the stage at which other users or parties other than the business owner can see the benefits of using the technology (Patrick, 2019)

In conclusion, Affiliate marketing is an important online marketing tool that is thought to be more cost-effective, increase an organization's product visibility, and increase ROI As a result, all researchers, organizations, and industries need a better understanding of affiliate marketing concepts and the factors that influence the

intention to use affiliate marketing.:

Proposed Theoretical Framework

2.3.2 The research of Ehab Kamal Haikal and Tareq N Hashem (2020)

In “The Role of Supply Chain Strategy and Affiliate Marketing in Increasing the Demand for ECommerce – Social Media POV” by (Haikal, Freihat, Diana, Joudeh,

& Hashem, 2020) examinined the role of affiliate marketing on social media and how it can increase the demand on ecommerce from the social media point of view The study looked at the most effective affiliate marketing and supply chain tactics that can boost e-commerce demand and are accessible through social media

Figure 5-Proposed Theory framework Source: Factors Influencing the Intention to Use Affiliate Marketing: A

Conceptual Analysis (Zurina et al, 2019)

networks Using a quantitative technique, the researchers distributed 95 questionnaires to marketing managers at cosmetics companies in Jordan's capital, Amman, during the fiscal year (2018-2019) The study's findings revealed a high level of knowledge and reliance on social media marketing as a form of endorsement by cosmetics brands Furthermore, it found that among the affiliate marketing options, CPC/PPC was the most influential and usable strategy

Sub-Hypotheses:

H1: Social media-based CPS positively influences the demand of e-commerce

H2: Social media-based CPA positively influences the demand of e-commerce H3: Social media-based CPM positively influences the demand of e-commerce H4: Social media-based CPC positively influences the demand of e-commerce

Founded on the findings of the research, it can be concluded that affiliate marketing

is based on the concept of simplicity and avoidance of complexity However, not everything can be dealt with in a straightforward manner The fact that affiliate marketing has an impact on ecommerce demand can alter the supply and demand chain, since it may be linked in some manner to the nature of the service-product being advertised and how it aligns with the website's vision and goal The author showed that:

Figure 6- The research of Ehab Kamal Haikal and Tareq N

Hashem (2020)

35

 Increase the focus on manual CPC over automatic CPC since it allows

marketing managers to monitor, alter, and change their marketing strategy

 When deciding on an affiliate marketing strategy, two primary considerations must be made: the connection between the website's vision and mission and the product/service being advertised, and the concept of the website and how closely

it matches the concept of the product Marketers should focus on the transparency of the endorsement they are following in order to attain a high degree of social media affiliate marketing

2.3.3 The research of Indrajit Ghosal et al (2019)

The research “Impact of Affiliate marketing on e-buying behavior of Millennial – A TAM based Approach with Text Analysis” was carried out by Indrajit Ghosal at al

in 2019 The author realized that, as a result of the rapid adoption of digital technology, businesses are now directly addressing worldwide customers and leveraging the advantages of the internet channel to obtain a competitive edge In this scenario, affiliate marketing has emerged as one of the most important ecommerce tactics for increasing sales through the use of incentives Affiliate marketing has aided in the adoption of internet buying technology by millennials The purpose of this paper is to assess the impact of affiliate marketing on millennial attitudes toward online purchasing The underlying findings have investigated qualitatively the benefits of affiliate marketing and their relationship with perceived ease of use and usefulness This has bolstered people's attitudes and behaviors

toward online shopping Through qualitative inquiry and text analysis of reputable sources, a conception has been validated The findings will assist stakeholders, ecommerce businesses, and entrepreneurs in enhancing their present online shopping portal operations by implementing an Affiliate Marketing strategy

Conceptual diagram showing the relation of affiliate marketing and its impact on online buying behavior:

The goal of the study is to help e-marketers better understand the aspects that influence millennial attitudes while developing affiliate marketing strategies Marketers cannot deny that the world is dynamically transitioning from a concrete market to a virtual one The research's inferred findings will aid in the discovery of

a common link between affiliate marketing strategy and online shopper's buying behavior

The advantages of an affiliate marketing plan, such as rewards, trust, increased traffic, and value creation, will boost the millennial's affinity for purchasing habit

In order to strengthen the existing business operations, the associated findings are required At the moment, the world is experiencing financial contagion, as well as a drop in consumer confidence The conclusions of this study will aid in reengineering the approach in light of current technologies in a VUCA world (Volatility, Uncertainty, Complexity, and Ambiguity)

2.3.4 The research of MH Abdelhaly, NM Kamal and HA EI Samie (2020)

In “The Impact of Affiliate Marketing on Customer Loyalty” was implemented by (Abdelhady, Kamal, & Samie, 2020) Customer loyalty is critical to the tourism industry's profitability and long-term viability In addition, in recent years, the concept of affiliate marketing has gained popularity among online buyers However, there have been a few studies that look into customer loyalty to affiliate marketing websites As a result, this study looks into customer loyalty to travel affiliate marketing websites (booking.com) As a result, this study looks into customer

loyalty to travel affiliate marketing websites (booking.com) This study uses six essential and supplementary services (affiliate website promotion, price comparison service, WOM in social media, quality online design, privacy, and trust) to influence customer loyalty perspectives The goal of this study is to determine which elements in travel affiliate websites influence consumer loyalty in the tourist business The findings point to six factors in both core and supplementary services that support the customer's loyalty perspective The research discovered that customers who used booking.com have greater thoughts on the 'privacy and security' element after reviewing the results of the customers who used booking.com Customer happiness has a considerable positive relationship with customer perceived value, which may influence customer loyalty

H1: There is a significant relationship between price comparing services on perceived value in the travel affiliate websites

H2: There is a significant relationship between word of mouth through online social communities on perceived value in the travel affiliate websites

H3: There is a significant relationship between travel affiliate websites promotion and perceived value

H4: There is a significant relationship between the quality of web design and customer perceived value in the travel affiliate websites

H5: There is a significant relationship between the privacy and security on perceived value in the travel affiliate websites

H6: There is a significant relationship between trust on perceived value in the travel affiliate websites

H7: There is a significant relationship between Customer Satisfaction and Customer loyalty in the travel affiliate websites

The findings of the study show that customer happiness and confidence in travel affiliate websites have a direct impact on client loyalty These findings have a number of ramifications for businesses looking to boost client loyalty Content and site design quality have a direct and indirect impact on satisfaction and trust The effects of perceived value on customer satisfaction and satisfaction on customer loyalty when customers acquire services on travel affiliate websites have been investigated and verified through empirical research

2.4 Hypotheses and Conceptual Model

2.4.1 Hypotheses

The key to successful affiliate marketing is to develop a win-win relationship between the advertiser and the affiliate In the future, affiliate marketing is likely to become the primary mainstream marketing strategy for e-commerce businesses (Duffy D L., 2005) In an affiliate marketing relationship, the key to a successful affiliate-advertiser partnership is a positive outcome for both parties By definition, affiliate marketing is a win-win situation for both parties involved Advertisers recognize the value of a purely commissioned sales force and a predictable marketing cost Affiliates can generate a revenue stream without investing in inventory or infrastructure All that is required is the ability to create websites with sufficient appeal to attract a sufficient number of customers interested in the products and services sold by the affiliate's advertisers (Duffy D , 2005)

(H1):Tracking Performance: Tracking Performance influences on intention using

affiliate marketing strategies of e-commerce companies in Vietnam

Zeff states that whereas measurement of advertisement has always been difficult in traditional media, with advertising online it is relatively easy and yet precise Advertisers can measure the number of times their ad was displayed, number of times it was clicked on, down to the factual number of sales leads it generated (Zeff, 1999)

Today, there are software packages that can track ads performance For example, in Google Analytics, users cannot only track web and performance, but also relate it to

a broad range of factors, including user location, language or search query By linking the performance directly to the products and its price, advertisers can optimize their advertising campaign for best performance

Affiliate marketing not only provides the above stated information, but according to Hoffman & Novak, it also monitors the activity of the customer after clicking on the

ad through a cookie, that is stored on his or her computer (Hoffman, 1995) Merchants usually track the customer’s activity for several days or weeks and pay the commision to the content providers when the sales is executed during the period

Advertisers can easily track the performance of an affiliate link throughout a company's marketing campaign Advertisers want to track the following metrics: clicks, conversion rate, average order volume, and cost per order revenue

(H2): Consumer Trend: Consumer Trend influences on intention using affiliate

marketing strategies of e-commerce companies in Vietnam

The affiliate websites offer a variety of discount coupons to both existing and new users This aids internet portals in attracting customers who make repeat purchases Consumer rewards, on the other hand, are motivational factors for both new and existing customers Affiliate marketers, on the other hand, get compensated based

on the number of visitors routed from their website Affiliate marketers promote their links either organically or through paid means with the help of higher reward packages The use of incentive leads aids in the generation of additional inbound affiliate links Consumers that use affiliate marketing recommendations also want to profit financially from referral codes People also use affiliate marketing links and accept their notifications and subscriptions, according to As a result, affiliate marketers bring financial rewards to themselves and their followers by adding value

to their posts They add favorable perception about the product utility through value

creation, which is still undiscovered by consumers and the community As a result, affiliate marketing aids consumers in making more informed purchasing decisions Affiliate connections aid in the generation of leads that may turn into potential buyers Affiliate marketing aids in the development of sales by boosting the number

of clicks and generating leads In fact, affiliate marketers are compensated on a per-sale, pay-per-click (selective), and pay-per-lead basis Their performance is also evaluated, with adequate payment considerations based on the quality of traffic generated

pay-(H3): Promote Purchase: Promote Purchase influences on intention using affiliate

marketing strategies of e-commerce companies in Vietnam

By delivering a favorable experience, relative advantage aids in boosting the applicability of the innovation The relative advantage of affiliate marketing is that consumers regard it as a positive experience The perceived benefit of affiliate marketing enhances the good experience across the full social and economic spectrum, and the online marketing strategy of affiliate referrals compliments the online promotion process Affiliate marketing and other related technology have been extensively researched for their novel applications The amount of leads generated by affiliate links via social media marketing is also expanding

A sense of trust is developed among consumers as a result of pleasant experiences acquired from affiliate websites, blogs, and videos The consumers' perception of the information also influences their sense of trust The imagery and the manner in which the affiliate marketer provides information play a role in developing trust As

a result of characteristics such as information quality, which establish a sense of good virtual cognition, trust is strengthened

(H4: Cost Saving): Cost influences on intention using affiliate marketing strategies

of e-commerce companies in Vietnam