Lazada, Shopee double down on affiliate marketing to compete with TikTok Shop in South-east Asia

[SINGAPORE] E-commerce platforms in South-east Asia such as Lazada and Shopee are doubling down on their affiliate marketing programmes to fend off rising competition from TikTok Shop and lower the cost of customer acquisition.

Once a challenger in the e-commerce space, TikTok Shop has shot up the ranks to place second in South-east Asia in terms of gross merchandise value in 2025, according to consultancy Momentum Works.

It also ranks second in all the markets in the region except Singapore, where Lazada remains ahead of TikTok Shop but behind Shopee.

As the industry matures by shifting away from a race for scale and towards sustainable profitability, e-commerce players are placing more emphasis on affiliate marketing as an increasingly important customer acquisition strategy.

Under this tactic, platforms pay their affiliate partners – usually content creators – a commission when customers buy products through their referral links.

In moving towards affiliate marketing, e-commerce platforms are looking to reduce dependence on buying traffic from Google and Meta, said Li Jianggan, founder of Momentum Works.

Such costs rise over time, with the relationships ultimately owned by Google and Meta instead of the e-commerce platforms.

“China demonstrated that content creators could become a scalable acquisition channel, and South-east Asia is following the same path,” he added.

TikTok Shop has shown how relying on creators in the region can be a viable channel for customer acquisition. Now, both Shopee and Lazada are making moves to compete.

They have signed up with Meta to integrate their affiliate programmes directly into its social media platforms. Lazada recently joined the tech giant’s Affiliate Partnerships Programme, making the integration with Facebook. Instagram is next.

Shopee, which had already integrated its affiliate programme with Facebook, launched its Instagram integration recently.

These moves allow the e-commerce platforms’ affiliates to tag items directly in their content on Meta’s social media platforms. In turn, the affiliates’ viewers are brought to the relevant e-commerce player’s app to complete the purchase with just a tap or click.

This reduces friction for viewers, as they no longer have to navigate to an external link to find the item and buy it.

Shopee said the Instagram integration has gained some traction among its affiliate creators, with more than 360,000 Reels – short-form videos – produced since the pilot was launched in mid-April.

“This is particularly encouraging given that the pilot has focused on Reels only,” noted Peggy Zhu, head of brand and growth marketing at Shopee.

“As we expand our affiliate integration to Feed, we see even greater opportunities ahead for creators,” she added, referring to Instagram’s main content stream.

Both Lazada and Shopee have affiliate programme tie-ups with YouTube as well, with Shopee inking an agreement in September 2024 and Lazada in December 2025.

Market observers said that affiliate marketing ties marketing spend directly with performance – paying for clicks, leads and sales rather than impressions.

“The benefits include more efficient customer acquisition, improved marketing (returns on investment), access to new customer segments and greater scalability,” said James Wilson, head of consumer and retail at KPMG in Singapore.

Observers also noted that affiliate marketing drives about 15 to 20 per cent of e-commerce revenue for brands, based on industry estimates.

In South-east Asia, affiliate marketing has become entwined with social commerce and creator content. This differs from the US and Europe, where affiliate marketing is propelled by independent blogs, publishers or coupon sites.

In building their affiliate programmes, e-commerce platforms have some key factors to consider for success.

Relevance, not reach

A compelling affiliate marketing programme hinges more on quality and quantity; scale and reach are not as important as relevance and fit.

“The most effective affiliates are not necessarily those with the largest followings, but those with trusted audiences and a proven ability to influence purchase decisions,” noted Olivier Gergele, EY-Parthenon Asean and Singapore consumer products and retail leader.

This is more pertinent in South-east Asia, where social and video commerce are gaining traction, he added.

E-commerce platforms must be clear on the role of affiliates within their ecosystem, through the design of incentives and the measurement of success.

Also important is choosing where affiliates interact with customers, as consumers now move across different touch points before making a purchase.

“The most effective affiliate programmes often combine social media, creator content, communities and digital publishing platforms,” said KPMG’s Wilson.

In measuring the impact of affiliate marketing, e-commerce platforms need to have tracking and attribution capabilities to understand which partners are driving conversions.

As consumers’ shopping journeys now span multiple platforms and channels, capturing the last click is not useful in understanding which affiliates are fuelling conversions – or turning viewers into buyers.

This is something that Lazada understands with its millions of affiliate partners in the region.

The platform tracks points across the entire affiliate funnel, considering key metrics from content performance – such as impressions, clicks and click-through rates – to conversion attribution, commission costs and creator-level performance.

“Channels should therefore be prioritised based on conversion efficacy, trust and fit with local shopping journeys – livestream selling, in‑app video, chat‑based recommendations, deal communities – rather than raw audience size,” said Vivek Sharma, consumer industry leader at Deloitte Southeast Asia.

When running an affiliate programme, conversion matters more than impressions – as TikTok Shop has shown other e-commerce platforms, noted Li of Momentum Works.

The platform’s affiliate partners create content where consumers discover products, making the journey from viewing to purchasing almost frictionless.

“A successful affiliate programme therefore depends less on signing the biggest influencers, and more on giving creators the right tools, product selection, incentives and conversion experience,” he said.

Striking a balance

In growing their affiliate programmes, e-commerce platforms have to balance between growth and profitability, market observers noted.

Expanding an affiliate network can increase reach, but scale does not necessarily translate into quality traffic or higher-value customers, said EY’s Gergele.

“Similarly, higher commissions may attract more affiliates and drive participation, but can also erode margins if not carefully managed,” he added.

A similar balance has to be struck between short-term conversions and long-term customer value. Rather than focusing on transaction value, leading e-commerce platforms use affiliate programmes as part of a loyalty and customer acquisition strategy, said KPMG’s Wilson.

Curation is key to an affiliate programme’s success, so e-commerce platforms need to select the right partners and creators that fit the brand strategy and local market needs, noted Sharma of Deloitte.

He added: “As more journeys are mediated by agents and social platforms, execution, data foundations and trust – not just technology adoption – will differentiate leaders.”

The partnerships Lazada and Shopee have with Meta and Google will be worth watching, said Li. The tie-ups grant access to an enormous audience outside the e-commerce players’ apps, but also reinforce dependence on external traffic.

“That is why platforms continue investing heavily in their own creator ecosystems. The long-term objective is not just to acquire customers, but to own the discovery journey as well,” he added.