Influence, interrupted: How India’s creator economy grew up

Influencer marketing in India has shed its experimental skin. What began as a niche tool for D2C discovery is now an integral lever in full-funnel digital campaigns, with creators—especially in the short-form video space—morphing into measurable assets on media plans. This evolution isn’t anecdotal; it’s backed by scale, spend, and structure.

Kofluence’s newly released Decoding Influence: The 2025 Influencer Marketing Report—based on inputs from over 1,000 creators, marketers, and experts—captures this shift. It positions influencer marketing not as a tactical bolt-on but as a mainstream pillar in digital AdEx, one that’s shaped by data, steered by tech, and judged by business impact.

“India's influence economy has not only seen growth but also a decentralisation of influence,” said Sreeram Reddy Vanga, CEO and co-founder of Kofluence. “There is a dynamic shift with creators in tier 2 and 3 cities, often creating content in regional and vernacular languages, who are building strongly engaged communities through hyperlocal narratives.”

From virality to viability

India’s influencer marketing industry is now valued between INR 3,000 to  INR 3,500 crore. It’s no longer about reach—it’s about resonance and returns.

The report notes that 23% of this spend comes from e-commerce brands, followed by FMCG at 19%. Interestingly, over a quarter of brands increase their influencer budgets specifically for launches—an indication that creators are driving not just brand awareness but conversion.

The preference for short-form video is no surprise. Platforms like Instagram Reels have emerged as the preferred monetisation vehicle, with creator rates ranging from INR 500–INR 5,000 for nano influencers and exceeding INR 2 lakh for celebrities. Sponsored content, rather than ad revenue, remains the dominant income stream.

"With India crossing 900 million internet users, the creator economy is poised for continued expansion, fueled by government initiatives as well as significant technological advancements," said Ritesh Ujjwal, co-founder of Kofluence.

Decentralisation meets personalisation

The power base has clearly shifted. The growth of micro and regional influencers—especially in languages beyond Hindi and English—is remapping the terrain of influence. Over 52% of marketers in the study identified creators with 10,000–100,000 followers as best suited for hyperlocal engagement.

Seasonal surges also reflect this trend. Diwali remains the most active campaign period, with the majority of brands starting planning two to four weeks in advance. In these windows, creators offer speed, adaptability and access to niche micro-communities that traditional media struggles to reach.

“Thanks to the strong governmental push for India’s growing creator economy, we are increasingly seeing local talent reach beyond borders and share their unique stories on the world stage,” said Vanga. “We are moving towards the phase of integrated influence in which content, community and commerce will begin to dissolve together.”

The tech stack behind influence

As third-party cookies vanish and regulatory scrutiny around ad targeting increases, marketers are turning to contextual influence. This is where tech-enabled influencer marketing platforms come into play.

According to the report, 61% of brands are already using platforms to streamline influencer operations, with nearly one in five fully integrated. Additionally, 29% of marketers have started using generative AI for content creation, making it the most prominent use case of AI in influencer campaigns—followed by performance reporting and campaign management.

Ujjwal noted, “Decoding Influence 2025 is built on strong platform intelligence and first-party data, and will give marketers strategic insights on a rapidly evolving industry that is being transformed by AI, cookie deprecation and shifting creator-brand relationships.”

AI and authenticity: friends or foes?

The generative AI boom is reshaping the creator ecosystem as much as it's changing digital marketing. Creators are now working alongside AI-powered co-pilots, streamlining everything from video scripts to thumbnails. Yet, the human edge—empathy, relatability, vulnerability—remains irreplaceable.

“Successful brands are pivoting toward contextual relevance. Technology is quietly helping make this happen,” said Vanga. “At Kofluence, we’ve observed that brands achieving breakthrough results are usually those embracing the full spectrum of technology in their influence chain.”

As synthetic media grows, so too do demands for transparency and authenticity. Regulatory bodies across markets are tightening norms. In some regions, influencer endorsements without disclosure can incur fines up to $250,000. India, too, is seeing increasing push for clear labelling, transparency and authenticity, especially in categories like health, finance, and sustainability.

Not just a metro phenomenon

A key evolution is the move beyond metro-centric content. Nearly 65% of India’s new internet users are from Tier 2 and Tier 3 towns. With regional influencers commanding trust and relatability, hyperlocal campaigns are now a key strategy.

“Last year, we saw Tier-2 and Tier-3 regions buzzing with hyperlocal influencer engagement and businesses harnessing micro-communities to produce meaningful results,” said Ujjwal. “Meanwhile, the content and commerce connection grew deeper; creators are now influencing not just discovery but also purchase decisions.”

The Indian government’s $1 billion creator fund, announced in March 2025, is expected to give regional creators an even larger runway to scale influence—potentially helping position India as an export power in global creator markets.

Where media meets commerce

Alphabet and Meta together command 60% of global digital ad spends. But increasingly, e-commerce platforms are becoming the second-largest destination for digital spends, at 17%. This reflects a larger trend: the blurring of content and commerce.

With creators increasingly embedded in product launches, review cycles, and affiliate sales, influencer marketing is no longer about impressions—it’s about the last mile of the funnel. Tools like live commerce, affiliate tracking, and AI-generated call-to-action prompts are reshaping what influence actually delivers.

The days of “like-for-a-fee” are giving way to multi-metric evaluation—engagement, conversion, sentiment, and share of voice.

Integrated influence: the next frontier

If 2024 was the year of creator-first planning, 2025 is clearly about integrating influence into the full digital stack. Influencer-led discovery is now joining search, programmatic and social media within unified campaign plans.

Kofluence’s report hints at what’s next: a unified influence ecosystem where creators, platforms, tech tools, and advertisers operate as a single supply chain. In such a model, metrics, compliance, optimisation, and even creative can be managed at scale—mirroring what programmatic once did for display.

“As synthetic media abilities evolve every day, and authentication technologies also advance, we’ll see unique possibilities for creative expression alongside increasing demands for transparency,” said Vanga. “How we navigate this tightrope will probably define our industry’s next chapter.”

Influencer marketing in India has evolved from cottage industry to cornerstone strategy. What was once the preserve of start-ups and social-first brands is now being embraced by legacy players who realise that storytelling, authenticity and trust can’t be outsourced to ad formats alone.

But as with any maturing ecosystem, the rules are changing. With AI driving efficiencies, privacy rules rewriting data access, and creator fatigue setting in for some audiences, influence will need to adapt, not just scale. The platforms and partners that bring creative agility, contextual smarts, and transparent reporting will define the next phase of growth.

As Ujjwal summed it up: “Influencer initiatives now firmly find a place alongside search, social and programmatic within integrated digital plans.” India’s creator economy isn’t just growing—it’s growing up.