D2C

D2C brands switch focus to smaller creators as influencer rates surge

Ayanti Bera

July 09, 2024 | 8 Min Read

With the rising popularity of social media influencers, the rates they are charging for brand endorsements are skyrocketing. While bigger brands may be willing to eat these costs, however, D2C brands—especially smaller ones—may find this harder to bear.

Key Takeaways

As social media influencers continue to gain prominence, the rates they are charging for brand endorsements have spiked
For a single reel, a creator in the lifestyle segment with 500,000 followers may charge around Rs 6-7 lakh, compared to around Rs 4-5 lakh just a year ago
While this isn’t an issue for larger, well-heeled brands, it is an issue for D2C brands, which have traditionally leaned heavily on influencer marketing
These smaller brands are now finding that smaller influencers are a better fit for them, not just because of cost but authenticity and engagement as well

The early years of Honasa Consumer—the parent company of Mamaearth, one of India’s biggest direct-to-consumer (D2C) success stories—were a slow grind. The company, which began with baby products before extending its tentacles into the wider beauty and personal care space, was up against deep-pocketed FMCG behemoths. With the latter able to enlist A-list celebrities to hawk their products, Mamaearth couldn’t outshout them for consumer attention.

Instead, it relied on an army of influencers—from mom bloggers to YouTube and Instagram content creators—to reach consumers. While it did sign on actor Shilpa Shetty Kundra as a brand ambassador in a deal that saw Kundra receive equity in the company, the company’s influencer marketing is massively credited with its rise to prominence.

Indeed, even as the company has since gone public, raising Rs 1,700 crore in the process, and now has the ability and name recognition to onboard big-name ambassadors, influencer marketing remains a major growth lever for the company. As per its IPO documents, the company plans to spend around Rs 11.5 crore, cumulatively, on influencer campaigns in FY24 and FY25. This is its third-largest advertising expense, after only TV and digital ads.

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