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Indian celebrities get ecommerce bonus

News, 12 August 2015

NEW DELHI: Celebrity endorsers in India are benefiting from the funds flowing into online and ecommerce businesses which are paying them fees of up to 200% over those being offered by offline brands.

The premiums depend on the category involved, according to talent management firms contacted by the Economic Times, but all were clear that a number of high-profile funding rounds for various ecommerce firms and start-ups were a factor.

"It's a function of valuations and the perception of them being heavily funded," explained Atul Kasbekar, promoter of celebrity management firm Bling. "Endorsement fees naturally tend to be higher."

And Vinita Bangard, chief executive of talent management firm Krossover Entertainment, added that as celebrities are the most influential opinion makers "it naturally makes a lot of sense for cash-rich start-ups and ecommerce companies to associate their brands" with them.

While exact figures are hard to come by, Bollywood actors such as Shah Rukh Khan, Aamir Khan and Amitabh Bachchan are understood to be asking up to Rs 12 crore for ecommerce endorsements, 25% higher than the rates they charge offline brands.

But they are being made to work harder for that money. "The endorsement has gone beyond plain vanilla appearances to integrations, appearances, digital – number of tweets or Facebook posts or blogs etc – and is spread across platforms," pointed out Vinit Karnik, national director, entertainment, sports and live events at GroupM.

Some celebrities are looking beyond an immediate payday and choosing to take an equity stake in the businesses they are lending their name to.

For example, Bollywood actress has been hired by Trunk Label, an ecommerce furnishing start-up, in a deal that includes equity, according to Afsar Zaidi, MD of talent management firm Exceed Entertainment.

"This is why the ecommerce endorsement deals are attractive," he said. "These celebrities are betting on the long-term potential of the startup."

The funds available to ecommerce businesses are not only affecting the endorsement market but are also having an impact on how agencies operate.

Debraj Tripathy, managing director, MediaCom India, outlined to Impact how the approach to advertising of these businesses is the opposite of a traditional offline company with a long-term view of brand building.

"These entrepreneurs have to first show results because their very survival depends on the funding and basic support of their investors," he said. So rather than track brand parameters they "track metrics only in terms of how much is advertising immediately impacting their business".

Data sourced from Economic Times, Impact; additional content by Warc staff