Influencer marketing and its contribution to the creator economy of India

  • $2.5 billion between 2018 and 2022 was raised by India’s creator economy startups
  • Valued at ₹ 900 crore, The Indian influencer marketing industry is expected to grow at a CAGR of 25% to reach ₹2,200 crore by 2025 ($276M)
  • With the ease of internet access, the number of social media users in India stands at 518 million

Way back in 2014, studies reported that word-of-mouth marketing generated sales with a  37% higher customer retention ratio then that of paid advertising. Fast forward, post  pandemic 2021, saw a surge in social internet user growth and content consumption, it is estimated that by 2026, social media users in India would grow to 650 Million.

Given the growing prevalence of influencers in “millennial” demographics the creator economy today provides more than value to platforms. Defined as businesses built by independent influencer marketers content creators, curators, fine arts creators and community builders, bloggers, videographers, and software creators, the creator economy is a huge mix of many theories and trends.

The majority of social media users in India are affluent, tech adept, and follow at least one social media influencer. Many creators with substantial fan bases in India have emerged as a result of the increased engagement in this marketing technique. Not to overlook the recent phenomenal increase in influencers and their brand relationships. And with more than 50 million people around the world considering themselves as entrepreneurs, it is one of the fastest-growing type of independent business.

“The creator economy in India is truly flourishing, generating about Rs 6800 crore and creating 7 Lakh jobs.”

Neal Mohan, CPO YouTube

Brands and Marketing

Influencers tend to create a sense of connection with their audience over the period of time. While social media trends and the application’s algorithm aids influencers reach, their followers and viewers give value to their content.

Social media platforms offer a wide audience and the ability to simultaneously engage millions of users with content. Having considered this, brands understand the significance of associating with such influencers who are constantly engaging and building up their audience.

The high ROI firms’ experience earning roughly 5.5 times their marketing budget has been one of the main draws of this new style of marketing. In recent years, the creator economy has risen to Rs 1,300 crore as more small, medium-sized, and even some multinational firms choose to use social media influencers to market their goods.

Creators have the audience and the aptitude to own D2C businesses. The TAM of creator-led business (D2C and Merchandise) in India is roughly estimated to be $1.6 billion (2022) ($1.2 billion for 2021, factoring for yearly growth, keeping it at $1.6 billion). Furthermore, influencer marketing account for 77% of the total revenue that creators receive, India’s creator economy TAM might be assessed at $4.8 billion (optimistically).

Why should brands look for Influencer Marketing?

  • User created content makes up more than 75% of the brand’s content.
  • Additionally, brands receive richer content with guaranteed exposure.
  • Over 4% of click-through rates culminate in sales.
  • Social media seems to persuade users to make purchases, overcoming the anti-ad bias.
  • Influencers marketing is way efficient and more visible to the audience now than the traditional marketing techniques.
  • Brands earn the attention of communities.

Monetization and recent Meta developments

Social media content creation has become so much more than just a side hustle or a mere hobby since the rise in monetization and paid collaborations from colossal brands.

Expanded monetization options for creators as well as new tools to make it easier to create and sell NFTs are among the new features that Meta has unveiled.

Through a new process that will enable users to both create and sell NFTs within Instagram, Meta is attempting to delve deeper into NFTs and digital art. By putting a focus on creators and understanding why improved monetization is essential to its extended push, Meta is looking to further embrace NFTs and digital art.

The Influencer marketing space is also expected to grow 25% annually to become a Rs 2,200 crore industry by 2025.

Ultimately, all of this has given influencers the chance to monetise their work and forge worthwhile partnerships with companies and brands, which has enabled them to make greater contributions to India’s creator economy.

Authored by: Sarika Tiwari

Edited by: Queenie Nair

Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of the Economic Times – ET Edge Insights, its management, or its members

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