Impact of Micro-Influencers on E-Brand Loyalty of Online Consumers in Sri Lankan Ayurveda Cosmetic Industry: Moderating Effect of E-WOM

Abstract

This study examines how micro-influencers affect online consumers' e-brand loyalty in the Sri Lankan ayurvedic cosmetics industry, with a particular focus on the moderating role of electronic word-of-mouth (E-WOM). The digital era has significantly impacted the corporate environment, with social media marketing becoming a primary strategy for marketers to shape brand loyalty among their target audience. Influencer marketing has grown significantly in the digital era, with a global valuation of $21.1 billion in 2023. In Sri Lanka, the market for influencer advertising is expected to generate US$17.23 million in ad spending by 2024. Among various influencer categories, micro-influencers are seen as crucial in the growing significance of influencer marketing because they engage with niche audiences to shape consumer experiences with more personal and interactive content. Despite the growing importance of influencer marketing, gaps remain in understanding how micro-influencers influence brand loyalty, particularly in the Sri Lankan context. This study addresses these gaps by exploring how key micro-influencer attributes such as expertise, trustworthiness, and attractiveness impact e-brand loyalty and how E-WOM strengthens these relationships. A quantitative research approach was adopted, with data collected through an online survey. A sample of 385 participants was targeted, yielding 288 valid responses for analysis. The study measured key variables using a five-point Likert scale. Micro-influencers' trustworthiness, expertise, and attractiveness were considered independent variables, while e-brand loyalty served as the dependent variable, and E-WOM functioned as the moderator. Statistical analysis, including multiple linear regression and Andrew F. Hayes’ Process Macro in SPSS, was used to examine the relationships and moderating effects. The findings indicate that micro-influencer attributes significantly influence e-brand loyalty. Specifically, trustworthiness and attractiveness had a strong positive impact, whereas expertise showed no significant direct effect. However, the association between micro-influencer variables and e-brand loyalty was considerably modulated by E-WOM, which increased the influence of attractiveness and trustworthiness on e-brand loyalty outcomes. Given that the study focused exclusively on the Sri Lankan Ayurveda cosmetics market, its findings may not be generalizable to other industries or geographic regions. Additionally, reliance on self-reported data introduces potential biases, such as social desirability effects. Moreover, the study did not incorporate qualitative insights from brands or influencers regarding effective micro-influencer strategies, which could be explored in future research. This study makes important theoretical and practical contributions. It extends the literature on micro-influencer marketing by contextualizing its effects within the Sri Lankan market and examining the interplay between influencer attributes and E-WOM. By aligning with the Source Credibility Theory, the study enhances understanding of how micro-influencers foster brand loyalty through perceived trustworthiness and attractiveness, particularly when reinforced by E-WOM. From a practical standpoint, the findings offer valuable insights for marketers and policymakers, emphasizing the importance of building authentic, visually appealing, and trustworthy influencer relationships while leveraging E-WOM strategies to enhance consumer engagement. Additionally, the study provides a conceptual framework for future research in emerging economies, where digital marketing is rapidly evolving alongside cultural and technological shifts.