Affiliate Marketing? Isn't That Group Buying?

A Complete Guide to Social Commerce Where Creators Directly Sell Products

Hello! I'm Luna, a marketer at Spray, bringing you practical marketing insights.

As social commerce has gained popularity, various marketing methods utilizing influencers are being employed. Among these, you've probably heard a lot about group buying and affiliate marketing in particular.

But do you know the difference between group buying and affiliate marketing?

Many people probably think of group buying and affiliate marketing as the same concept. In this article, I'll explain the definitions and differences between each method.

I'll also examine which marketing approach is more effective in Korea, the US, and Japan.

Group Buying Is Not Affiliate Marketing?

If you're a marketing manager considering influencer-based social commerce, you've probably considered both group buying and affiliate marketing at least once.

Did you know these two methods look similar but are actually different concepts?

While group buying and affiliate marketing share the commonality of selling products through third parties, they differ in various aspects including operational methods and revenue structures.

First, group buying is a campaign-style sales method that generates large-volume sales at discounted prices within set timeframes and quantities.

In the past, it was simply a format where many people purchased together to lower prices, but recently, group buying utilizing influencers has become commonplace and established itself as a marketing tool.

When collaborating with popular influencers, explosive sales growth is possible with thousands of sales occurring in short timeframes. This becomes an effective method for brands to quickly clear inventory and boost sales metrics in short periods.

However, since group buying promotions focus on 'limited discounts' and 'quick sales,' conducting group purchases too frequently can actually diminish brand value.

Consumers might perceive it as 'a brand you buy cheap during group buys.'

In contrast, affiliate marketing is a method where individuals or media outlets (affiliate partners) who have partnerships with brands promote products through brand product links or codes, and receive commissions for sales generated through those links.

Affiliate marketing contributes to broader and more sustained brand awareness improvement compared to group buying.

By introducing products across influencers' various channels (blogs, YouTube, SNS, etc.), brands can continuously expose themselves to potential customers through multiple touchpoints.

However, when conducting affiliate marketing, brands find it difficult to fully control partners' activities beyond pricing policies, creating concerns about brand message distortion or image dilution.

Therefore, careful partner selection and management in advance is necessary.

Each marketing method has its unique advantages and disadvantages. So which approach is more effective in Korea, the US, and Japan?

Now let's examine which method—group buying or affiliate marketing—is more effective based on each country's characteristics.

Is Korea Still in the 'Affiliate' Introduction Phase?

The biggest reason is that the domestic affiliate ecosystem is still immature.

While product promotion through social media is active domestically, there aren't clear success cases of creators who directly sell within social media or marketing utilizing them.

Some cases like 'Coupang Partners' affiliate marketing are showing results, but they seem to remain at the level of individuals earning income.

Therefore, there aren't particularly visible cases of brands achieving results with affiliate marketing as their main strategy.

For these reasons, when conducting social commerce marketing domestically, group buying methods are more commonly considered.

Group purchasing utilizes influencer follower bases to generate sales.

One important factor when conducting group buying is 'selecting appropriate influencers.' Beyond choosing influencers who match the brand well, it's also important to select people with high follower engagement rates who have actual sales potential.

Even if influencers have many followers, if there's no interaction, collaboration on group purchases will struggle to convert to sales.

US: 'Affiliate Marketing' That Secures Both Initial Sales and Content

Unlike Korea, affiliate marketing appears much more activated in the US.

The proportion of people posting sales-oriented content with individual codes on TikTok or Reels already seems much higher, and brands have gradually started showing interest in this direction.

With the efficiency and cost-effectiveness of simple seeding in US market entry dropping significantly compared to before, they've turned attention to strategies that generate sales while growing from the beginning.

Since commission only needs to be paid when actual sales occur through influencers, initial cost risks can be greatly reduced, which is also an advantage.

Additionally, since influencers continuously create content for their own profit, the ability to quickly create touchpoints with local consumers is also attractive.

Moreover, the US has a strong individualistic culture, making group buying unfamiliar to consumers. For this reason, US consumers prefer immediately usable individual discount coupons rather than waiting for group buying schedules.

The case of US group buying platform 'Groupon' failing to maintain long-term interest confirms that group buying is not an effective method in the US market.

When actually implementing affiliate marketing in the US, securing many partners is key.

Unlike group buying above, affiliate marketing is a method that expects multiple creators, not a few, to generate even small amounts of sales.

Therefore, rather than selecting appropriate creators, encouraging as many creators as possible to participate becomes the method for improving final results.

Cautious Japanese Market Strategy for Both Consumers and Brands

Japanese consumers value trust and prefer offline stores where they can directly check products. Due to this influence, they've shown cautious and careful attitudes toward group buying.

For this reason, Japan's group buying market hadn't become popularized, but in recent years, group buying activities through SNS platforms have continued steady growth.

Looking at Japan's group buying formats, they often center around small, trusted acquaintance networks.

Considering these characteristics, collaborating with micro-influencers for group buying appears effective in the Japanese market.

Japanese consumers trust acquaintance recommendations more than brand advertising and perceive micro-influencer recommendations as trustworthy information.

Collaborating with micro-influencers who have solid relationships with their followers for group buying should yield sufficient results in the Japanese market as well.