2019/02/21

Infrastructure of online side business "Affiliate" changes the Internet advertisement in Southeast Asia

In Southeast Asia there are many people who want to start own business rather than as company employee. Therefore, side business is common such as 80% of Grab’s driver are working it as side business. Actually Grab’s driver in Malaysia, even government officer are working as a side job to earning more income.

Under such circumstances, affiliate business are able to earn money with only using internet and personal computer and becoming spotlight in Southeast Asia. The rapidly growing e-commerce in Southeast Asia, where digitization is rapidly progressing, is also a good material for affiliate business.

In February 2019, a leading Japanese affiliate ASP (Affiliate Service Provider), Interspace is enter Malaysia.

We spoke to Mr. Hayato Nakata of CEO of Interspace Malaysia.
 

Mr Hayato Nakata
CEO 
Interspace Digital Malaysia Sdn. Bhd.

Profile
After his graduation from Waseda University in Tokyo, Hayato joined Interspace, Inc., one of the fastest growing Digital marketing companies in Tokyo. Changing his location to Kuala Lumpur in Malaysia, he committed himself to set up Malaysia branch of Crossfinity, Inc. which one of the leading SEO agencies in Japan. The task of building it up through client base and revenue is a fantastic experience. Growth has been always at least double digit %. From April 2017, he started playing a role as Head of SEO and UX in Crossfinity Digital Asia Sdn. Bhd.
Throughout his career of 8 years+, he has been providing digital marketing solution to his customers supported by his passion for the industry.
Being specialised in Affiliate marketing, SEO and CRO, he helped clients of many industries and nationalities.

Industry experience: eCommerce, Travel, Telco, Beauty & Personal Care, Finance, Human Resource, and Online Game.

International projects: Japan, Malaysia, Singapore, Indonesia, Thailand, Phillipines, and Vietnam.

As the digital landscape evolved, soon Hayato was given the opportunity to manage Crossfinity in Malaysia as Country Manager. He has have been with Crossfinity Malaysia since day 1 of operations.

http://interspace.my/

 

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About Japanese Affiliate Service Provider, Interspace

Interspace is ASP (Affiliate Service Provider) from Japan. It is listed on the TSE Mothers and the number of affiliated media is about 400,000, which is the top 5 leading ASP in Japan.

There are many people who do not know the name of Interspace but know the ASP service "Accesstrade" which operating by Interspace.

Interspace Co., Ltd begin expansion to Southeast Asia from 2013, in September 2013, first established a local subsidiary in Thailand and October 2013 in Indonesia. In April 2015, a joint venture in Vietnam, October 2015 a local subsidiary in Singapore, and February 2019 a local subsidiary in Malaysia was set up.

Since 2012, Interspace Co., Ltd has been expanding to China, Indonesia, Thailand, Singapore, and Vietnam. Lately, the company expanded to Malaysia, forming Interspace Digital Malaysia Sdn. Bhd.

Interspace Group has more than 500 employees throughout the world and Interspace Co., Ltd was listed in the Mothers section of Tokyo Stock Exchange in 2006.

 

What kind of business is affiliate?

Let's us make a simple explanation about affiliate business before we interview with Mr. Nakata.

An affiliate is a business model that earns revenue through "digital advertising".
The player is a company [Advertiser] who wants to advertise on the Internet, a [medium] such as blog, information site where posting advertisement of advertiser, and [ASP] as 3rd party is mediating between these two.

The person who came to view the website by clicks on the advertisement and goes to the advertiser's site, where when the transaction is established, the fee is paid from the ASP to the medium, and the advertisement fee is paid from the advertiser to the ASP.





Reference：http://interspace.my/


In other words, in order to be "selected ASP" it is important to have both ⓵ an advertiser with easy-to-sell merchandise and ② a good medium on the network.
 

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Toward No. 1 ASP in Southeast Asia 

ー Malaysia is the 5th country as your destination of expansion in overseas, what is being targeted in Southeast Asia's business?

NAKATA It is becoming No. 1 ASP in Southeast Asia. Currently, the number of media that are entering the ACCESSTRADE network in Southeast Asia is about 100,000, 1% of the e-commerce circulation amount goes through the ACCESSTRADE, and I am confident in this number. I want to further extend this number.


ーI think that there are many competitors in Malaysia, what kind of strategy do you have?

NAKATA There are several strategies.

First, Interspace is a Japanese company, but in Southeast Asia we specialize in localized services tailored to the markets of each country.

Specifically, there is a network with local companies as advertisers. In Malaysia, such as Air Asia etc.?

Of course, online expansion shopping sites such as LAZADA under Alibaba and Shopee of Singapore. Although enterprises such as Expedia, Agoda, Citibank and CIMB Bank have entered the network as advertisers, the existence of advertisers familiar to the locality is still important.
 

Provide advertisers with "Quality Media”

ーTo the advertiser, what kind of strength of Interspace are you planning to sell?

NAKATA Recently, the problems in the affiliate marketing industry are ad fraud (unless advertisement).

Ad fraud is to "Disguise" sales in various ways, but in Interspace, we take actions such as guiding media that uses these methods and not introducing advertisers to malicious media.

Since it is the role of ASP to connect media and advertisers successfully, I would like to build good relationships by introducing quality media to advertisers with good materials.

 

Affiliates marketing are better cost performance than Google and Facebook advertisement

NAKATA Another thing I would like to appeal to advertisers is about the cost effectiveness of affiliate advertisements.

The percentage of affiliate advertisements in Internet advertisements is about 20% in Japan, whereas in Malaysia it is about 1%, but currently in Malaysia, most of the Internet advertising budget is used for Google ads or Facebook advertisements.

However, it is not well known that affiliate advertisement are more cost effective than Google and Facebook advertisements.

Affiliate is a result-based advertisement, so advertising costs will be linked to sales.
Affiliate advertisement only pay if a certain predetermined action is met, no payment without result. Not as Google advertisement is charging per click and Facebook advertisements per Like.

 

Strengths in cultivate affiliate inexperienced media 
 

ーHow are you going to gather media?

NAKATA It think will using network of ACCESSTRADE by talking to the media individually.

Media are individuals and corporations, the best sales can be price comparison site, Kakaku.com which operated by a corporation and coupon site.

The major comparison site in Malaysia is "iPrice", the coupon site is "Couponation", and "Shopbank" is the biggest cash back site.

However, the large number of media are operated by individuals such as blogs and information sites. I'd like to encourage people who have never affiliated before joining the network.

ーI heard that there are many people who give up because affiliate is difficult for those people who without experience, what will became?

NAKATA It is the “skill to cultivate media” that Interspace has cultivated throughout Southeast Asia countries.

We hold a free seminar where you can learn “how to build a site where could gather the number of views”, "How to increase traffic", "How to create results", and to open a webinar (online seminar) on YouTube which we are doing it in other Southeast Asia countries, but there are not many other ASPs that are doing this kind of thing.
 

Picture of Accesstrade award
 

Towards expansion of affiliate market in Malaysia

ーI heard that Mr. Nakata is lives in Southeast Asia for 4 years, but how do you analyze the situation of digitization in Malaysia?

NAKATA Digitization in Malaysia is progressing among Southeast Asia countries, the purchase price per capital of e-commerce is top class in Southeast Asia.

From an affiliate's point of view, media and advertisers are gathering from all over the world. Example, there are places in Malaysia at Western countries coupon sites.
Affiliate "Ecosystem" of media and advertiser are existence for the time being, so I would like to further evolve that ecosystem by having Interspace into Malaysia.

Specifically, the affiliate market is around 20% of Internet advertising in Japan, but according to its own survey it is still about 1% in Malaysia. I would like to aim to make this 10% as soon as possible.
Link to company page in M-navi website 

  Interspace company detale