With healthy socio-economic conditions ahead, Vietnam's e-commerce is primed for significant growth. That will in turn fuel the country's affiliate channel.

At the moment, no region is growing faster than Vietnam, with its greatest strength being the educated and young population that is open to learning and adopting new ways of  improving its economy, including the adoption of online technology.

With one of the youngest populations in the world (over half the population in Vietnam is under 35), and a foreign investment climate that is rapidly developing, Vietnam has been compared to the "new China" of 10 years ago. In 2001, Vietnam signed the Bilateral Trade Agreement with the U.S. and began to transform its laws to comply with the BTA; a further step was taken when Vietnam joined the WTO (World Trade Organization) in early 2007. Vietnam is also in the ASEAN-China free trade agreement, and with the continuing development of its relationship with its closest neighbour, China, Vietnam is well poised for substantial growth. 

Demographic trends also favour Vietnam; with a population of over 90 million people and a literacy rate of 95 percent, it is no surprise that Vietnam is making headlines in business journals these days. The country is predicted to be a hotbed for economic growth, with online commerce an important component of this growth.

Not surprisingly then, that the affiliate channel in Vietnam has slowly begun to make an impact. While it is still early to be making broad generalisations of the characteristics of the affiliate channel in Vietnam, some specific examples of the networks and affiliates working within those networks can be observed.

Much of the basis for our observations on the characteristics of the Vietnamese market stem from AMWSO's experience in managing cost-per-lead (CPL) campaigns in the Asian markets for over six years, most recently in Vietnam. Additionally, the utilisation of Syntryx to collect in depth data on the networks and affiliates alike, have yielded some interesting characteristics of this channel, as it operates in IndoChina.

A Syntryx analysis of the affiliate networks operating in Vietnam shows that all the big networks like CJ, Linkshare and Performics have affiliates operating out of Vietnam. But these affiliates tend to market to a Western audience, and target primarily American visitors. It turns out that the fact that these affiliates are in Vietnam is merely a matter of geographical circumstance, rather than a product of marketing focus. What we are concerned with in this article is the marketing to the local population by Vietnamese affiliates, and this function is not being served by the local Vietnamese affiliates working within the major networks.

In terms of the Syntryx search, the data shows that the Lucky Pacific network dominates the affiliate activity in this country. In addition to Vietnam, Lucky Pacific also has a strong presence in the Asia region generally, specifically in China. One characteristic to note is that this network runs offers almost exclusively focused on lead generation.

Lead generation focus is important because actual online commerce in Vietnam is in its early stages of development. It is notoriously difficult to pay online with credit cards in Vietnam, as many of the transactions are blocked or cancelled, and the population, in general, do not pay on credit. Nor is PayPal prevalent in Vietnam -- a lot of Vietnamese PayPal accounts have difficulty making payment because of the widespread difficulties with fraud in the country. Hence, the methods of payment represent a real barrier to paying for goods online, as well as for affiliates to receive money from merchants through PayPal.

It is not all bad news, however, as the revenue earned by Vietnamese affiliates from generating leads in Vietnam, where the qualifying action on the part of the consumer, does not involve a monetary transaction, has shown some early success.

Chris Sanderson is director of AMWSO. Read full bio.

William Hamson-Wong is director of Asian marketing for AMWSO. Read full bio.