The Impact of Virtual Influencers on Social Media: Driving Customer Engagement and Strengthening Brand Loyalty in the Indian Millennial Market

This study investigates the influence of virtual influencers (VIs) on customer engagement and brand loyalty within the Indian millennial market (ages 18–35), a demographic highly active on social media platforms. Anchored in the Source Credibility Model, the research evaluates how algorithmically generated persona traits—such as perceived authenticity, entertainment value, and trustworthiness—affect user interaction and loyalty outcomes. Using a structured questionnaire administered to 290 respondents, data were analyzed through Structural Equation Modelling (SEM). The findings illustrate that algorithmically-generated persona simulations designed for thrilling and credible interactions markedly enhance customer engagement, which subsequently fortifies brand loyalty. Moreover, trustworthiness serves as a critical bridge connecting authenticity and engagement. These findings demonstrate the strategic value that virtual influencers can offer for sustaining enduring brand equity within a technologically driven culture like India.