Influencers use social media reach to set up their own labels
In October, Aanam C., a beauty influencer with decades of industry expertise, launched her own cosmetics label Wearified. It claims it exceeded its forecast revenue from pre-orders for a lipstick collection by 150%.
Popular food vlogger Madhura Bachal launched her Marathi spice brand, Madhura’s Recipe, on e-commerce sites in August 2018. As of last year, these masalas, who contribute more to their annual income than the income from branded content, have been contributing to. sells select retail stores in Maharashtra.
The fashion influencer Suman Khera Sethi, who has a little more than 33,000 followers on Instagram, currently earns more money with her clothing line Label S than with brand collaborations. Launched a few months before the first statewide lockdown in 2020, it says her company has picked up speed recently after being hit twice during the pandemic.
The deodorant line 2407 by top entertainment creator Faisal Shaikh, which was launched in October 2019, will reach annual sales in the tens of millions, according to his agency.
A combination of low marketing costs and high customer loyalty makes these brands click. Your customers are the finished cohort of followers and subscribers that the creators have courted and won over the years. This community is very engaged and trusts the creator which makes it easy to sell. While some creators launched products to bolster their brands, others took the influencer route to gain a following and eventually enter the market.
“Creator Brands”, as Abhimanyu Radhakrishnan, Managing Director of Qyuki Digital Media, describes these lines launched by influencers, “have low customer acquisition costs compared to regular e-commerce products. It’s easier to turn a fan into a customer than turn a customer into a fan, ”says Radhakrishnan of Qyuki, the agency that represents and runs their product businesses, Bachal and Shaikh (popularly known as Faisu).
Aanam calls this phenomenon that creative brands are adopting a “natural next step”. From Kylie Jenner and Tati Westbrook in the US to Diipa Khosla in the Netherlands to Huda Kattan in the United Arab Emirates, several prominent international influencers are now running their beauty and skin care brands worth millions.
“As the attention spans decrease, the loyalty of the audience dwindles and the content game has become too number-oriented for my taste,” says Aanam. With Wearified, she wants to build a more sustainable parallel career that is free from the whims of algorithms, hoping her new brand and career will be based on the connections she has built with her follower community over the past decade, which has given her the insights she needs for product development needed.
Sethi, a former marketer, says she “embarked on the path of influence to get into the fashion design business,” which has always been her dream.
A representative from Faisu says the creator decided to launch a line of deodorants based on his own experience selling clothes to passers-by on Mumbai’s busy Linking Road before he became famous for his entertaining TikTok videos . He wanted to create a product for people like him who need to look and smell good for consumer-facing jobs, even if they don’t have access to uninterrupted water or commute on public transport.
While their life as creators has given them unique insights into the thoughts and needs of consumers, launching and managing a product is an entirely different matter. Running a product business requires skills that developers, by and large, do not have. And most are aware of it. Very often the agency hired to represent them manages the day-to-day running of the company, from customer care to compliance with manufacturing guidelines, while continuing to focus on content creation.
“We are taking a minority stake in the company in order to provide the necessary human, technical, legal and operational support. Our goal is to bring the entity from zero to one, ”says Radhakrishnan.
Agencies also see a greater business opportunity in scaling their creators’ brands, especially as Thrasio-style companies that aggregate and build brands across sectors are looking to invest in or acquire D2C startups.
Unsurprisingly, advertisers, especially D2C brands that rely on influencer marketing for their revenue growth, aren’t thrilled. “It’s confusing for the audience,” says Shivani Chakravarty, founder of Exalté, an artisanal wellness tea brand. Chakravarty was considering finding an influencer to work with when she discovered that the creator had launched her range of teas. “How do you justify and convey someone else? then does the brand convincingly offer the community? “she asks.
In most traditional industries this would be viewed as a conflict of interest. However, creators work with multiple competing brands at the same time, but on a project basis and for a fixed fee or commission. When they launch a brand, they automatically become its brand ambassador, so the stakes are much higher. “In my opinion, both brands and content creators would avoid collaborating on product categories where they see a major conflict of interest,” said Shivani Behl, chief marketing officer for Plum, a beauty and personal care brand.
Creators like Faisu and Bachal don’t endorse brands that compete with their products. Aanam and Sethi, however, say they had no conflicts of interest. “The advantage of being a beauty creator is that you can wear 20 brands at the same time,” explains Aanam. “Brands don’t have a problem with collaboration because I don’t advertise my label at the time,” adds Sethi from Label S. added.
Of course, beauty and fashion are categories in which consumers frequently purchase products from multiple brands, which may be beneficial to both the intellectual property owner and advertisers. The fashion consultant Shruti Jaipuria believes that the freedom from conflict is also due to the fact that most D2C fashion brands are “young and inexperienced”. “Your primary goal is to get mentioned and increase sales. ” She says.
Worldwide, fashion influencers like Chiara Ferragni have taken advantage of their global fan base to launch brands, says Diksha Sachdev, founder of Fashion Solutions, a fashion and lifestyle marketing agency for young brands. “This has in no way diminished their authenticity or led to conflicts with other brands,” says Sachdev, who works intensively with foreign and local fashion brands.
The thesis “That worked in the USA and in China” contradicts the fact that people in these countries, in addition to a much more developed e-commerce scene, have a greater tendency to spend on hobbies and leisure time.
With an estimated ₹Currently, India’s $ 900 million influencer economy numbers are not on par with the U.S.’s $ 3 billion industry, much less China’s $ 210 billion influencer economy powered by a vibrant live Commerce ecosystem is powered. Recently, China’s top live streamer Austin Li Jiaqi (also known as The Lipstick King) sold $ 1.7 billion worth of various brands of products through Alibaba’s Taobao app during a 12-hour live-streaming session. A Business Insider report said another top live streamer, Viya, sold $ 1.25 billion worth of goods in her 14-hour marathon.
At least four influencer marketing executives Mint spoke to said brand collaborations are still making the lion’s share of the income for most creators while sales of their products remain low. “The model works better with a celebrity launching their own brand,” says Lakshmi Balasubramanian, co-founder of Greenroom, an influencer marketing firm running the business while the celebrity receives a portion of the profits. “Balasubramanian leads the example of actress Katrina Kaif, who entered into a joint venture with Nykaa to launch their Kay Beauty line in 2018. When the beauty market went public earlier this year, Kaif’s investment in the company increased tenfold in value ₹22 crore, according to market analysts.
A similar co-creation model with relevant influencers is an option that many brands are considering. Plum is one of those brands. StyleNook, a clothing recommendation service, is another. “The trend (of the creator brands) is inevitable,” says Kuntal Malia, co-founder of StyleNook. She would rather be a part of it than oppose it.
This is a necessary trend, says Lavin Mirchandani, founder of GetEvangelized, the agency that Sethi from Label S represents is likely to lose prominence in the long run. “
It is like production houses creating commissioned content as a service for TV networks, as opposed to studios creating IPs that can be networked and expanded into experiences, goods and books. Mirchandani argues that, in the end, creators have to be like the studios.
Qyuki’s Radhakrishnan expects niche influencers’ IPs to grow faster than lifestyle influencers. But for them, too, he predicts that it will take at least two years for the income from product sales to match that from brand cooperations.
But the Creator Brands model is not for everyone. As Mirchandani says, “Those who have failed to see the difference between an audience and a community should be wary of making money too soon.”
Subscribe to something Mint newsletter
* Please enter a valid email address
* Thank you for subscribing to our newsletter.
Never miss a story again! Stay connected and informed with Mint. Download our app now !!