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The Rise and Rise of the Creator Economy and Influencer Marketing in India

Editor, TRANSFIN.
Jan 8, 2022 9:40 AM 5 min read
Editorial

The Good Glamm Group has said it will invest ₹200cr ($26.86m) in its influencer management and marketing business, which has been consolidated under a new entity named Good Creator Co. (GCC). And with the goal of furthering its content-to-commerce strategy, the Group has also acquired influencer marketing firm Winkl and online video analytics platform Vidooly.

India's first unicorn in the D2C beauty and personal care space (valued at $1.2bn as of November), the Good Glamm Group came into being only in September 2021. It already owns numerous related brands like MyGlamm, St. Botanica, Plixxo, BabyChakra and MissMalini.

The Group's recent announcements shed light on the burgeoning influencer economy, which has ballooned to a ₹900cr ($120.87m) business in India and is expected to be worth ₹2,200cr ($295.45m) by 2025 (25% CAGR).

Influencer Economy 101

The domestic influencer market has taken off, buoyed by the rapid growth in digital literacy, internet penetration and smartphone usage.

The swift ascent of influencer marketing can be rationalised by the sheer power of the medium - a majority of consumers are reportedly more likely to trust influencer recommendations over traditional celebrities' or conventional ads.

The segment has also come of age, if formalisation is a standard. Last year, the Advertising Standards Council of India (ASCI) came up with guidelines for the space. Which was warranted: the segment is evidently particularly strong in India, which is among the top five countries where consumers follow the lead of digital influencers when deciding on a purchase.

The bulk of influencer marketing (over 50%) is commanded by Instagram, followed by LinkedIn (23.91%) and YouTube (15.22%). The influencer market is also a lopsided one, with usual suspects like personal care (25%), food and beverages (20%), fashion and jewellery (15%), and mobile and electronics (10%) commanding 70% of the entire market.

Podcast Alert! Influencers are the ambassadors of the zeitgeist. What drives their unique industry, why is it experiencing a sudden boom, and how big is it really? These are some questions we tackled in an earlier episode of TRANSFIN. Adda. Click here to listen!

Now, the relentless rise of influencers has also resulted in the expansion of two related segments - influencer management and the creator economy (the latter of which is often used as a catch-all term for these markets).

 

Influencer Management 101

Influencer management platforms, as the phrase suggests, are those that aim to be the mediators between influencers and brands. They are essentially the agents or brokers of this new-age industry.

These players advise both sides of the table on securing the best agreement for the best outcomes by inking win-win lucrative partnerships and increasing conversion rates.

Going forward, possible trends that might influence the influencer and influencer management markets include influencers’ reducing platform-dependency (vis-a-vis the current system where, say, if India bans Instagram tomorrow, millions of camera-crazy people would automatically lose their hustles) and increasing VC interest in the space.

Then, there is how social media platforms themselves are reacting to the escalating prowess of the creator economy…

 

Creator Economy 101

Broadly speaking, a "creator" on social media is anyone who publishes original content. And if they try to monetise that content by selling brands of products, they can be called "influencers".

There's a growing tribe of creators-turned-influencers-turned-entrepreneurs. YouTubers who marketed fitness products and are now launching their own, Instagram models who now own their own brands, beauty influencers who market their own personal care products…

The creator economy has indubitably turned the world of advertising upside-down. For many years, the central idea behind social media platforms was that the content was free. In the digital age, anybody with a phone can become a content creator. But except for a handful of big names - i.e. Celebrities and mega-influencers - all that most of these creators received for their content were a few likes on Facebook or video views on Instagram or YouTube. Essentially, just bragging rights (along with dry eyes and a mental illness!).

The creator economy is changing that. The rise of subscriber-based platforms is enabling content creators of all kinds to make a buck, so long as they find an audience interested in what they have to offer. Bloggers and Twitter thread-masters are embracing Substack, podcasters are moving to Clubhouse, video game experts are exploring Twitch, celebrities are using Cameo to send personalised videos to fans, and so on…

And all these platforms (which are massively popular, by the way; case in point: OnlyFans) are offering creators the bulk of what they earn, whilst taking a tiny cut of the proceeds as their share.

The Rise and Rise of the Creator Economy and Influencer Marketing in IndiaBack home in India, the creator economy has been in a constant state of flux, in no small part due to (1) the TikTok ban, (2) the growing number of made-in-India video-sharing platforms like Moj, MX TakaTak, Josh and Roposo, (3) and GoI’s obsession with promoting Koo while putting Facebook and WhatsApp in the crosshairs.

Unlike in the West, the Indian creator economy is at a relatively nascent stage. Mostly because the boom began at a later stage and most of the content is consumed and created in local languages (while first movers, which were typically American tech companies, were largely Anglo-centric).

That said, it has rocketed over the past two years, particularly amid the pandemic, when lockdowns gave creators ample time to make and market content.

Meanwhile, bigger tech companies have been watching the soaring clout of creators with increasing alarm. Inadvertently, they have tried to revamp their own business models to avoid a creator exodus.

Facebook launched paid subscriptions, is testing a Cameo-like feature called Super, and is inviting gamers to join Facebook Gaming. Amazon bought Twitch. YouTube is incorporating new features to provide creators with tips. TikTok launched a "creator fund", Snapchat launched Spotlight. Twitter bought a Substack-like newsletter firm named Revue and launched Spaces, an audio streaming feature akin to Clubhouse.

The focus is gradually shifting from the tech platforms hosting the content to the content creators themselves. The latter are harnessing the immense influence they have to secure lucrative deals and make big bucks out of their content. A good example would be Joe Rogan’s $100m deal with Spotify.

The audio streaming giant wasn’t merely paying for Rogan’s podcasts; it also had an eye on his outsized influence.

FIN.
 

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