Is India lagging in the Virtual Influencer race?

Remember when Rae stepped onto the stage at Cannes Lions 2023, alongside the representatives at Dentsu Creative Singapore and their client CapitaLand Investment, she captivated the audience with the story of how she ended up with over a million fans as an influencer with a sold-out streetwear collection. The notable difference? Rae wasn't human. As a virtual influencer with over a million followers across Instagram and Weibo, Rae represented a growing global phenomenon that's reshaping the influencer landscape, one that India is still catching up to.

The global virtual influencer market is experiencing a growth valued at USD 6.33 billion in 2024 and is projected to reach USD 111.78 billion by 2033, growing at a CAGR of 38.4%. The same can’t be said about India. The country's virtual influencer market generated just USD 120.8 million in 2023, accounting for a mere 2.6% of the global market. Though India's market is expected to grow at an impressive CAGR of 45.4% through 2030, reaching USD 1,660.6 million, the United States is expected to maintain its leadership position.

The contrast between global and Indian markets becomes even more apparent when examining virtual personalities worldwide. Brazil's Lu, created by retailer Magalu in 2003, boasts an estimated 32 million combined social media followers with annual earnings projected to reach $17 million. The virtual influencer has been on the cover of Vogue Brazil, appeared in music videos, endorsed major brands and even advocated against domestic violence.

In the U.S., Lil Miquela has amassed over 3 million TikTok followers and 2.4 million Instagram followers since her 2016 debut. She earns approximately $2 million annually from partnerships with luxury brands like Dior, Calvin Klein, and BMW.

India's Virtual Influencer Landscape

India's virtual influencer scene, while growing, remains comparatively nascent. Kyra by Futr Studios, India's first virtual influencer, has gathered over 200,000 Instagram followers and collaborated with brands like boAt and Titan Eye. Myntra's Maya, a digital fashion stylist, has over 160,000 Instagram followers, while Naina by Avtr Meta Labs leads with over 400,000 followers. Recently, Collective Artists Network unveiled Kavya Mehra, India's first virtual mom influencer, who has quickly gained over 1,300 followers.

Despite their growing presence, Indian virtual influencers have yet to achieve the mainstream recognition or commercial success of their global counterparts.

The earning potential of virtual influencers in India suggests that the market is still finding its footing. Kyra earns between ₹5 lakh and ₹10 lakh per video, comparable to human content creators. Naina currently quotes about ₹6 lakh to ₹8 lakh per reel, with larger campaigns like one with Oppo generating around ₹22 lakh.

Reports suggest that virtual influencers with 200,000 to 400,000 followers can earn ₹5-10 lakh per campaign, compared to ₹40,000-1 lakh for human influencers. This suggests a potentially more profitable model, though research by Twicsy.com contradicts this, claiming human influencers can earn 46 times more than their AI counterparts.

This poses the question: Is India lagging behind in the virtual influencer space?

Cultural Disconnect and Brand Hesitancy

Preranaa Khatri, Chief Business Officer at Only Much Louder, believes India's slow adoption stems from cultural factors. "Indian advertising relies heavily on emotion-driven storytelling and unique narratives, which makes it challenging for AI influencers to create the same depth of connection as their human counterparts. I believe we're still a few years away from fully embracing virtual influencers in a meaningful way."

She notes that our culture and society thrive on celebrating public personalities and celebrities. If AI influencers are to find acceptance, brands will need to create a gripping, emotionally charged narrative to fill in for the absence of a human touch, according to her.

Indian brands appear cautious about embracing virtual influencers. Sudeep Subash, CEO of Big Bang Social and Chief Revenue Officer at Collective Artists Network, identifies mindset as the primary barrier. 

"Many brands still associate influence with real people, so we have to show them how a virtual personality can have an equal impact." He continues, "Another concern is ROI. Brands want to know how a virtual influencer will drive engagement and sales. Once they see the results, they start to realise the long-term value."

Sahil Chopra, Founder and CEO of iCubesWire, attributes the hesitation to audience preferences and technical constraints.

He shares, "Indian audiences are engaging deeply with real influencers, valuing authenticity and relatability over digital perfection. In addition, the technology required to create high-quality virtual influencers is quite expensive."

However, Chopra continues that brands have full creative control and 24/7 access to virtual influencers. While they don’t have the earning power of human influencers, their appeal as potential brand ambassadors is steadily growing.

Brand Safety and Ethical Concerns

Dhiraj Gupta, Co-founder and CTO of mFilterIt, highlights additional barriers related to brand safety and comments that Indian brands are cautious when it comes to adopting virtual influencers, primarily due to concerns related to brand safety, authenticity, and audience trust. 

He elaborates, “While AI-generated personalities offer brands greater control over messaging, they also pose unique risks. Consumers value relatability and real-life experiences.”

A virtual influencer, could be meticulously designed, but still struggle to form genuine emotional connections, as per Gupta. “With AI-generated influencers, there is always a risk of misleading claims, deepfake controversies, and ethical concerns."

He notes that tech-savvy brands in fashion, gaming, and fintech may lead the way in adoption. 

However, AI personas may be used as brand mascots or to supplement human influencers in digital campaigns, instead of fully replacing real influencers.

Meanwhile, global brands are leveraging virtual influencers with remarkable results. Hyundai Morocco's campaign with Kenza Layli, the world's first Miss AI, reportedly generated 10 million views on Instagram and YouTube, with an engagement rate of 8%, compared to the industry average of 5%.

What’s more? Research from Harvard Business Review reveals that followers show 13.3% more engagement with virtual influencers' paid posts compared to their organic content, whereas human influencers' sponsored posts garnered 2.1% less engagement than their unpaid content.

British fashion house Ralph & Russo's campaign with Hauli, a virtual model, achieved 19.4 million views worldwide, with an estimated media exposure value of $65.1 million. In China, livestreams featuring AI-powered virtual influencers are drawing massive attention, with providers like Baidu and Silicon Intelligence claiming that live-streaming anchors can be created in minutes.

Human influencers still have an edge

While virtual influencers offer unique advantages, there's a human side to consider. Traditional influencers have built careers on authentic connections with their audiences, sharing personal stories, showing vulnerability, and creating genuine bonds that AI cannot easily replicate.

As Sahil Chopra notes, "Traditional influencers will always have an edge with their relatability and real-life storytelling, which strongly appeal to Indian audiences." 

Human influencers often spend years cultivating their craft, developing their voice, and building communities. Virtual influencers bypass this through technological shortcuts. As the industry evolves, the livelihoods of many content creators may be affected, raising questions about the ethical implications of this transition.

Despite India's current lag, experts see potential for growth. Sudeep Subash observes increasing curiosity from Indian brands and notes, "Many brands are exploring how virtual influencers can fit into their marketing, whether in ad campaigns, social media, or even live shopping.”

India has a massive and evolving digital audience, and brands are always looking for ways to stand out. While it's still a new space here, the potential is huge, he continues.

Preranaa Khatri, on the other hand, remains cautiously optimistic. "It's too early to make any sort of definitive predictions, but while the industry will grow in India, I expect it to remain niche. Given how vast and diverse our country is, we really need to cater to regional audiences by bringing cultural nuances for mass adoption and acceptance."

She is optimistic that technological advancements will enhance realism, making AI influencers more interactive and relatable over time. However, she remains sceptical about AI-generated personalities becoming mainstream in marketing. 

“To me, they will continue to be interesting experiments that brands adopt occasionally to increase conversations and drive engagement, rather than a fundamental shift in influencer marketing."

As India continues its technological evolution, the gap between global and Indian virtual influencer adoption may narrow. But the question remains: will India embrace this digital future fully, or will the deep cultural value placed on human connection keep virtual influencers on the periphery of India's influencer marketing landscape?