Client Name

Daraz Pakistan

Faculty Advisor

Dr. Nida Aslam

SBS Thought Leadership Areas

Entrepreneurship and Innovation

SBS Thought Leadership Area Justification

This ELP is mainly related to the IBA SBS thought leadership area – Entrepreneurship and Innovation, but also has interdisciplinary linkages to Behavioral Studies. The project's very essence is Entrepreneurship and Innovation because affiliate marketing is a type of micro entrepreneurship, where individual entrepreneurs create their own source of income on a platform, and the key product is an innovation – a re-designed affiliate interface and operating model designed to reconfigure how Daraz acquires, retains and grows its affiliate base. The work directly engages with platform business models, value creation for both the marketplace and its creator-entrepreneurs, and the design of new product features, that have material implications on how Daraz competes and scales, such as transparency dashboards, tiered progression, a creator academy, a seller–affiliate marketplace, and gamification.

Behavioral Studies is also used to an extent that brings meaning to the project. Much of the research focuses on the question of why people do as they do—why new users drop out of onboarding, why experienced users drop out of onboarding even after making an income, the impact of feeling fairly treated, payments, recognition and trust in continued participation, and interface usability and first-use behaviour. Insights gleaned from a real platform problem help to generate knowledge for marketing practice, curriculum, and executive learning, in line with IBA's mission to produce field based, applied scholarship.

Aligned SDGs

GOAL 8: Decent Work and Economic Growth

Aligned SDGs Justification

The principles of affiliate marketing are basically low barrier to revenue. It enables students, freelance and micro-creators, and small content producers to make money without needing to purchase inventory, employ a staff, or be an established business. The project analyses the reasons why affiliates are not able to maintain their income on Daraz and suggests better and more transparent commission, payment and progression frameworks to encourage more decent and reliable digital work, and more active and inclusive economic participation. For people, especially for women — due to cultural and social factors — working in their homes, affiliate programs can be a valuable and attainable way of making a living.

NDA

No

Abstract

This is an Experiential Learning Project for Daraz which looks at the real reasons that affiliates are not converting and retaining on Daraz after their initial purchase, and suggests a revised affiliate journey to overcome this. Although Daraz is the largest e-commerce marketplace in Pakistan, Bangladesh, Sri Lanka and Nepal, their affiliate channel has two main challenges; poor conversion rates after first purchase and low engagement after purchase. This project aimed to identify the underlying causes of this decline, compare Daraz's performance with top affiliate networks, and develop a comprehensive and actionable plan based on the findings.The project's goal was to identify the underlying causes of this decline, benchmark them against the leading affiliate ecosystems, and then create a comprehensive and actionable plan based on the findings.

A qualitative dominant mixed method design with two streams of evidence was utilized. In the first, five international platforms were compared (Amazon, Shopify, Shopee, Temu, Flipkart) and seven local platforms (Highfy, PriceOye, OLX Pakistan, Laam, Zero Lifestyle, Jenpharm) using the following five criteria: Affiliate Model, Method of acquisition, retention strategy, interface, and ecosystem integration. Second, the primary study utilized task-based usability testing with prospective first-time users, in-depth interviews and voice notes with active affiliates, and an online survey along with a comparative case stemming from an active competitor affiliate.

The results all point to the same diagnosis. If you're new to the business, friction is a structural issue: namely, the affiliate section is not easy to find, onboarding information is not easily accessible, or the link-conversion process is unintuitive. Economic and relational issues were a particular concern for the established affiliates, with low commission rates being the most commonly reported concern at 79% of respondents to the survey, all of which have been exacerbated by delayed and opaque payments, distrust of tracking, recognition based on a large creator's success, and a 2024 transition to an app that broke established links and shook out top performers. In fact, Benchmarking revealed that the competitors were benefiting from several factors that Daraz didn't have: promo-code and hybrid attribution, gamification and tiered rewards, niche acquisition, structured affiliate education, and in-app social commerce. One of the standout factors was the active management of the relationship, which was found to be the most effective retention driver among the ones that were observed.

The project suggests re-engineering the affiliate app based on the best practices, backed by a Revenue Transparency Dashboard, a tiered progression system, a Daraz Creator Academy, a performance insights panel, a seller–affiliate marketplace, and gamified challenges, with the introduction of hybrid attribution and better relationship management. Overall these recommendations transform the affiliate relationship from one-off transaction to long-term relationship of value creation and enhancement to retention, engagement, and long-term contribution to sales for Daraz.

Document Type

Restricted Access

Document Name for Citation

Experiential Learning Project

Download

Share

COinS