Daybreak - How Youtube is challenging Instagram's social commerce dominance

Episode Date: December 14, 2025

Youtube launched Shopping in India in October 2024, and within a year, 40% of eligible creators adopted it. The platform is betting on high-intent audiences who research before buying—unlike Instagram's impulse-driven model. By building shopping infrastructure in-house and partnering with Flipkart and Myntra, Youtube offers creators high commissions.The shift is democratizing income for micro-creators, while affiliate GMV exploded from Rs 10 crore to Rs 300 crore in two years. Youtube isn't trying to beat Instagram at its game—it's doubling down on what it does best.Tune in.Daybreak is produced from the newsroom of The Ken, India’s first subscriber-only business news platform. Subscribe for more exclusive, deeply-reported, and analytical business stories.

Hi, this is Rohan Dharma Kumar. If you've heard any of the Ken's podcasts, you've probably heard me, my interruptions, my analogies, and my contrarian takes on most topics. And you might rightly be wondering why am I interrupting this episode too? It's for a special announcement. For the last few months, I and Sita Raman Ganeshan, my colleague and the Ken's deputy editor, have been working on an ambitious new podcast. It's called Intermission.

We want to tell the secret sauce stories of India's greatest companies. Stories of how they were born, how they fought to survive, how they build their organizations and culture, how they manage to innovate and thrive over decades, and most importantly, how they're poised today. To do that, Sita and I have been reading books, poring over reports, going through financial statements, digging up archives, and talking to dozens of people. And if that wasn't enough, we also decided to throw in video into the mix. Yes, you heard that right. Intermission has also had to find its footing in the world of multi-camera shoots in professional studios, laborious editing, and extensive post-production.

Sita and I are still reeling from the intensity of our first studio recording. Intermission launches on March 23rd. To get alert, as soon as we release our first studio recording, episode, please follow intermission on Spotify and Apple Podcast or subscribe to the Ken's YouTube channel. You can find all of the links at the ken.com slash I am. With that, back to your episode. If you've ever wanted to try out a new skincare brand or buy new earphones, you know the drill. You want to avoid a rash or a subpar audio experience so you comb through every product review you can. Or you decide to continue your research in a way that feels even more conclusive.

If you could follow someone you'd trust as they touch, feel and test the product over a few days, you get to see not just if it's safe to use, but if it actually works the way it's supposed to. The skin influencers and product recommendation experts on YouTube, you know, the creators with a majority of videos titled, I tried X so you don't have to, have been helping counter. people make the right shopping choices for a while now. Of course, YouTube isn't blind to this fact. In fact, here's what it noticed recently. Shopping related watchtime grew more than 250% in the past year. Thousands of viewers were coming to the platform to search for product reviews, comparisons and halls. You see, YouTube's numbers are stellar in India. It has nearly

40% of India's OTT share. And in just FY25, the platform brought in more than 14,000 crore rupees from just ads and subscriptions. The creative ecosystem that was built on the platform has contributed over 16,000 crore rupees to India's GDP. That's the equivalent of 9,000-full-time jobs. But despite these amazing numbers, YouTube has one major problem. Instagram.

Reels in specifics. You know, those short, catchy videos were all a little prone to getting addicted to. They have become the hub of social media-driven commerce in India. So, YouTube decided to capitalize on the wealth of content it already has. It launched its shopping affiliate feature in India in October 24. The feature is supposed to integrate e-commerce more seamlessly into the platform. And as a YouTube spokesperson put it, the point is to close out the loop on a shopping journey that actually began on the platform.

It's been working pretty well. Within a year, over 40% of eligible Indian YouTubers have already adopted it. The thing is, YouTube could make this move with confidence because it has something Instagram doesn't. High intent audiences. People who come to YouTube aren't just scrolling casually. They're researching. They're putting in work to make the best possible buying. decision for themselves. And YouTube's move to make the most of these consumers is possibly

rewriting the creator economy. Welcome to Daybreak, a business podcast from the Ken. I'm your host Richard Wreckies and every day of the week, my co-host, Nikita Sharma and I will bring you one new story that is worth understanding and worth your time. Today is Monday, the 15th of December. A lifestyle YouTuber with 2 million followers discovered YouTube shopping by a happy accident. After posting a Mintra Hall video, she noticed extra earnings of $1,000 to $1,500 in her analytics. That's when she realized that YouTube had auto-tapped the products in her video without her doing anything. On YouTube's end, this wasn't an accident. It was strategic.

A YouTube spokesperson told my colleague, the Ken reporter, Debanjali, that the platform has been rolling out an AI-powered tagging system. It automatically displays shopping tags the moment a product is smith. mentioned in a video. The aim is to capture user interest when it's at its highest. In general, the platform has been aggressively pushing its shopping feature. First, it lowered the requirements. Creators need fewer subscribers, views and watch time to use it. Then came the monetary incentives. Tech creator Yogi Yulendra, who has 2 million subscribers, explains that YouTubers make 1 to 15% commissions on shopping sales.

And to encourage creators further, YouTube has sweetened the deal by giving high-performing creators additional bonuses. For instance, anyone selling products worth over 1 lakh rupees can earn bonuses starting from $4,500 to $50,000. And it's not just creators. Brands are getting incentives as well. Elton Fernandez is the performance marketing lead at the Soul Store. He told DeBanjali that the platform gives away ads.

credits, which means brands can promote through influencers for free. Then there's also the shopping cart benefit. A YouTube employee explained that if a shopper has five non-affiliate items in the cart and adds another product from a creator's video, the creator gets commission on all six items at checkout. So why is YouTube pushing so hard? Because it knows that it's up against giants. Instagram is built for snackable content.

It's made for people who scroll quickly and passively, which means it's perfect for triggering small ticket purchases, especially in fashion and beauty. A study from Epsos, a market research firm, reported that 80% of people discover brands on meta. On YouTube, that number is a little less than 70%. Because, you see, YouTube is built a little different. As we mentioned earlier, the searches on YouTube are high intent,

especially for pricier items. And these are quite tough to sell directly from a video. The common observation is that consumers naturally explore various options before settling on anyone. This also explains why a brand like the sole store spends up to 80% of its performance marketing budget on meta. Fernandez told us that Instagram offers much higher discoverability. Basically, the company relies on Instagram for impulse buys. Or the other hand, YouTube is for showk. Facing detailed product features.

Of course, YouTube is well aware of this difference. Sahibah Dhandanya, the CEO of Influencer Marketing Agency Confluencer, told Dibanjali that YouTube is now strategically linking short-form and long-form content. Here's basically how it works. YouTube shots hook you onto your product as you're scrolling. Then, the linked long-form video acts like a funnel, leading you to the in-depth information. In comparison to Instagram, which is mostly relying on creators to do the selling, YouTube is deeply involved in making shopping work.

More on this in the next segment. Instagram launched its shop tab back in 2020. It was a dedicated button for browsing products. But by 2023, Meta had it removed. Why? Well, because it didn't work all that well. It lacked proper search functions and didn't have any reviews or ratings. So right now, Instagram has scaled back its shopping to brands alone.

Here's how it works. You click an ad while scrolling through your feed or reels. It opens the brand's website right inside Instagram's app. You can then check out their products and even finish purchases through that page. But there's a problem. If you change your mind or get distracted, you can't just close the website and return to it later because it doesn't save your progress. Even other forms of social commerce on Instagram are,

third party managed, like brand deals and affiliate marketing. One of the main third party players is Vishlink. Divian Shrameta, the co-founder of WishLink, told us that the creator-led commerce platform handles over 60% of all shopping done on Instagram India. It lets creators set up personalized storefronts linked to their bio while managing everything on the back end, from negotiating commissions to securing free products and even providing analytics and facilitating brand interactions, Vishlink does it all.

YouTube's shopping feature, on the other hand, does most of this in-house. Ameta explained that it displays its own product tags, generates its own affiliate links, and provides dashboards and analytics to the creators. This has clear advantages. Of course, creators make more money, and YouTube gets a seat at the table on deals that were once exclusively between brands and creators. But here's the key impact. Being able to track transactions means YouTube can start charging creators fees on every transaction in the future because they're being hosted on YouTube's

own platform. What also helps is YouTube's tie up with platforms like Flipcard and Nica. This kind of partnership builds audience trust, offers competitive prices and discounts which leads to higher conversion rates. That said, YouTube doesn't want to control everything. If Mintra wants promotional content for a specific sari brand, YouTube won't connect the company to influencers. That kind of a role still falls to platforms like Vishlink. But YouTube still has a challenge. While affiliate shopping is definitely gaining momentum, creators' preferences lies elsewhere. Stay tuned. Affiliate marketing is still quite nascent in India. Dhandanya, the influencer marketing CEO we mentioned earlier, told us that right now,

creators prefer collaborating with brands for sponsored content. Then they sell advertising rights for brands to promote this content further. All four influencer marketing agencies we spoke to focused up to 90% of their budget on brand deals. The reason is simple. Gora Varura, the co-founder of Digital Marketing Agency, Social Panga, told Devanjali that creators want upfront payment. Large creators charge rupees 5 to 10 lakh per brand collaboration. So they don't really see value in affiliate commissions. Those depend on sales volumes, which are lower and quite unpredictable.

For microcreators though, it's different. Those with about 10,000 to 100,000 followers can do quite well with affiliate marketing because they don't have the popularity to command large upfront brand deals. What's interesting is that the entry of shop, has shifted creator dynamics. Earlier, YouTube's ecosystem naturally sidelined smaller creators who didn't have the resources for long-form videos. Yogendra, the tech YouTuber we mentioned earlier,

told us that a million views on a shot would only pay about $400 to $1,000. The same views on a long-form video would pay $35,000 to $40,000. Now, shopping makes shots more viable. creators can monetize short form content through affiliate links. The YouTube spokesperson claims that it's the only platform that has cracked the code for shots on connected TV. It offers a high-definition environment where viewers are more receptive to products. That said, shots still has miles to go before catching up with reels. The Ipsaw study we mentioned earlier found that Instagram users also spend almost 20% more daily time on reels than on YouTube shots.

And so, YouTube is trying every trick in the book to drive adoption. A YouTube employee said that the platform informs creators when partner marketplaces have sales so that creators can actually time their shopping content accordingly. Chris Neal Perez, the co-founder of an agency, told us that recently Samsung even approached agencies. They wanted creators to promote its smartphones via shopping during Flipkarts Big Billion Days sale. To be fair, YouTube has always done some things quite right. For instance, it has always had a strong partner management system.

The lifestyle YouTuber from earlier said that creators can connect with their partner manager in minutes, whereas with Instagram it feels like reaching out into the dark when you're trying to get help. Also, content on YouTube is evergreen in a way that reels can never be. As Aurora from Social Panga told us, videos can be searched repeatedly. Whereas brand collaborations on Instagram go viral for a while before inevitably dying down. So affiliate marketing could very well be YouTube's next big thing. And the numbers back this up. The gross merchandise value of products handled by Vishlink and sold by creators on YouTube

jumped to rupees 300 crore in 2025 from just 10 crore rupees two years ago. Top creators are earning rupees 20 to 30 lakh a month in commissions. Right now, the YouTube employee told us that the platform's partner marketplaces pay an annual fee. And while that might be sufficient for now, it won't be long before YouTube finds other ways to capitalize on this growing market. Daybreak is produced from the newsroom of the Ken India's first subscriber-focused business news platform. What you're listening to is just a small sample of our subscriber-only offerings. A full subscription offers daily long-form feature stories, newsletters and a whole bunch of premium podcasts.

To subscribe, head to the ken.com and click on the red subscribe button on the top of the Ken website. Today's episode was hosted and produced by my colleague Rachel Vargis and edited by Rajiv Sien.