It pays to be open minded

Start Licensing’s Ian Downes on why it is difficult to pigeonhole things in the current climate.

I am sure most of us that work in licensing have been asked to explain what our job entails. My stock answer is to say I work in a Mickey Mouse business and quickly explain how a Mickey Mouse t-shirt happens. This explanation is effective but is getting a little dated so I have been delighted to see how high street optician Specsavers has embraced licensing. I now use it as my go to example to explain the business of licensing.

Specsavers is a company that uses licensing across different product ranges and age profiles. Currently it is promoting a Disney Mickey Mouse range prominently in the windows. This is linked to Mickey’s 90th anniversary. This anniversary seems to have been leveraged well by Disney and it has pulled together a number of interesting partnerships. Anniversaries offer brand owners a good opportunity to shine a light on a brand, coupled with a chance to kickstart things. I am currently working with Aardman on Wallace and Gromit’s 30th anniversary which is next year.

A lot of planning has gone into it to deliver a range of activities, new design resources and opportunities for licensees. Anniversaries are opportunities but ones that need to be proactively managed.

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Returning to Specsavers, it uses a variety of marketing techniques to engage with consumers and licensing is intertwined with this. It is well known for its TV commercials and strap line, but it invests in window displays and also produces a couple of customer magazines. One is Specsavers for Kids. This combines some product information with activity pages and competitions for children.

The current issue highlights a new range of products featuring the Transformers movie Bumblebee and the issue is themed around this. Here Specsavers is making the most of a high profile movie adding some new dynamics to the product offering. I imagine it manages the inventory carefully and it is a time limited range.

For the film, this partnership has created a fresh communication platform and opened up some new retail space. Other children’s brands that Specsavers currently sells include JCB, a perfect brand for tough and durable spectacle frames. It also sells Mulan, Winnie the Poohand The Gruffalo.

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Specsavers also publishes a magazine aimed at adults. The cover star of the current issue is Zoe Ball. A good example of how it uses celebrity spectacle wearers to promote the products. Other personalities it features in specific promotions about particular topics include Eamonn Holmes, Louise Redknapp and Hairy Biker Dave Myers. This is an example of how brands are tapping into the celebrity market and using celebrities as voices for specific campaigns.

Specsavers has recognised that spectacle frames can be fashion wear and trend driven. With this in mind it has a track record of working with designers and brands.

Current brands featured include Red or Dead – this product is interchangeable whereby the arms and frames of the spectacles can be changed allowing the wearer to mix up colourways and designs. It also has strong links with celebrities like Kylie Minogue and Will.i.am who have curated and designed collections. The celebrities talk about their designs and collections adding gravitas to the partnerships. Other featured brands include fashion brands Lyle & Scott, Karen Millen and Balmain. This theme extends to ranges with Tommy Hilfiger, Hackett, Quiksilver and Cath Kidston.

Fashion licensing is obviously a good route for Specsavers. I think it licences a lot of things directly, but I imagine it also tops up the offer by stocking product from licensees. The latter approach would allow it to respond to new trends and styles.

Specsavers is a really good example of how licensing is playing a role in different types of businesses and products. A reminder to us all that new business can be developed in genuinely new ways.

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As we approach Remembrance Sunday, there have been more examples of licensed products and partnerships between brands and the Royal British Legion featuring the iconic poppy. One clever and timely product are pin badges produced in partnership with football clubs. I think this official programme will reassure fans that they are buying official merchandise with money flowing back to the Legion.

I bought my Millwall Poppy badge directly off the Legion website although they were on sale in the club shop as well. Apparently they sold out on the first day in-store so more were ordered. One aspect of official licensing campaigns we can overlook is illustrated by this example. Officially licensed or produced products can be a great reassurance to consumers.

I think these football club Poppy badges are a very smart move by the Legion, not least as there seems to be a plethora of pun badges on the market.

The other Royal British Legion Poppy product I thought stood out was a half pint mug from Emma Bridgewater. £5 from purchase of the mug goes to the Royal British Legion. The design features poppies designed in the signature Emma Bridgewater style. It is a lovely product that has a real keepsake quality to it and one that befits the brand it features.

It is hard for organisations like the Legion to strike a balance between raising funds and quality controlling the use of their brand. In this case I think it is a really effective partnership and it has created a product that works really well in a unique retail channel.

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Finally, I think we are all finding the retail market challenging and confusing at the moment. One piece of activity I spotted this week added to my confusion but is probably a sign of the times – the times being that retailers need to find new ways of engaging with consumers and achieve cut through.

I saw online retailer Not on the High Street not quite on the high street, but on the station concourse. It had a pop up retail unit at Waterloo Station. I think this shows that retail is rapidly changing and it is difficult to pigeonhole things.

An open minded approach to selling and reaching consumers is probably the right mindset at the moment and remembering retail examples like Specsavers which show that licensing can be a valuable tool in a confused retail market if used wisely.

Ian Downes runs Start Licensing, an independent brand licensing agency. His Twitter handle is @startlicensing – he would welcome your suggestions for what to look out for.

Originally appeared on: https://www.licensingsource.net/indepth/the-licensing-lookout-it-pays-to-be-open-minded/

Ganesh Subramanian

Possibilities in Retail through AI & Robotics: From GiTex

By Ganesh Subramanian

Founder & CEO @ Stylumia

We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten. Don’t let yourself be lulled into inaction – Bill Gates

The combination of artificial intelligence (AI) and  collaborative robotics has the potential to change the world. AI unlocks entirely new capabilities for robots, which, without AI, are rigid and unresponsive to the world around them. We were able to spot many real life applications at the intersection of robotics and AI. This edit is a recap of some of our observations. 

Lead innovations in retail will start to happen in the area of mass public consumption. By keeping a close watch here, you will be future-aware and get future-ready.
 
#1 Robotic Cocktail/ Mixologist

Cooking is an art for chefs, and when a mixologist readies a glass of drink to meet the customer’s expectations and satiate his thirst, it’s both art and science at play. Watch a robotic mixologist in action here or click the image.

#2 Shop Comes Home

Why go to a shop when the shop can come to your door step. A smart combination of Cab Hailing, Self-Driving Car and Shopping all in one. Watch this innovation here or click the image below.

#3 Robotic Pharmacy

From prescription to tendering the medicine, this robotic pharmacy is fully self-serve. With digitisation of the medical system, this explodes the possibility of using data to improve both the doctor’s diagnosis and future prescriptions. You can watch this innovation here or click the image below.

#4 Offline Retailing Personalised to One

With a face scan, pick up a self help scanner and start your shopping. As you scan an item, contextual offers, promotions, marketing messages pop-up. Complete your shopping, check out with your wearable. This is retailing to the level of one which best of companies are able to practice online now, coming to offline soon. You can watch this innovation here or click the image below.

Here is an unmanned store concept. Enter with your Face ID, shop and keep moving.

#5 Localised Automation

Automation need not be at the scale of a Store. This innovation is a clear example of automating one process, for eg., Check-out scanning. One of the key issues in bar code based scanning is many bar codes are not readable and there is plenty of time wasted and customers have to wait. This 3D scanning machine with computer vision can recognise the products irrespective of where the bar code is and even if the bar code is missing (using the image and text on the packaging). You can watch this innovation here or click he image below.

#6 Computer Vision: Possibilities

Computer vision provides machines, the cognitive capabilities which helps machines now to do a lot of skilled jobs at scale. The following possibilities are covered in the video below

a) Object Identification
b) Weapon Detection
c) Character Recognition
d) Personality Identification
e) Violence Detection
f) Emotion Detection
g) Drowsiness detection

You can watch this innovation here or click the image below.

#7 Smart Wall

This is a see through smart screen which can be fixed in malls or retail stores with a camera right on top. As the people walking by stop there, they will get personalised recommendations of brands and products. They can interact with the screen and shop. The walls collect information on the people who came using the camera and share the details on customer profiles and their interactions with the brands. Consumer research and interactions made simpler and at scale.

Social and humanoid robots will help us do a lot of mundane tasks in the time to come. I had the opportunity to interact with Sofia, the world’s first robot citizen, and Han (a humanoid robot created by Hanson Robotics). I also interacted with another mini social robot which converses with us and slowly becomes like ours, a huge potential in changing education and user interfaces in the time to come. We captured these memories below.

You can watch Sofia in action here or click the image below.

Hope these innovations are stimulating some thoughts in you for the business you are in.
 
With the capabilities of machines improving by the day, what we need to do as human is changing rapidly. If you are not seeing it, it is coming to you faster than you think. It is important for each one of us to look at the skillsets of our teams and organisations in this context to be future-ready.

Apart from bringing the AI technologies to fashion and retail industry, we at Stylumia would like to play a role in the skill enhancement with respect to understanding the technologies available today.

If you would like to know more about future skill-sets required for a fashion brand or retailer, please get in touch with me on the following  – Email: support@stylumia.com : Mob +91 8010812602

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Sports Licensing in India – On field to Off field

Sports merchandising not only creates great value for the brand but also creates engagement with the FAN off the field.

The community of FANS not only defines the legacy of the brand but also its shelf life.  It can’t be truer for one of the biggest forms of licensing i.e SPORTS.

Globally, Sports Licensing is one of the biggest licensing categories for entertainment and has seen some hugely successful programs on Brand Extensions. There are typically 2 models that the teams/talent follow, and there have been successful case studies in both.  Sports Licensing is currently valued at USD 24.9 billion and is expected to make USD 48.17 billion by 2024.

Sports Teams are built by their fans or fanatics, as they are popularly referred to, because of their excessive enthusiasm for their favorite team or player, and the devotion towards them.

India has been an untapped market when it comes to sports licensing. As far as sports is concerned, India has traditionally been a cricket dominated country, however, that hasn’t really translated into a merchandise program, except for IPL team Jerseys, which are predominantly sold during match days, and face severe issues with fakes. With technology and a large youth population, there has been a considerable shift in the genre. The rising e-commerce and online sales have further positively impacted market growth.

Some things to look out for…

IPL Merchandise will gain momentum

rcb-merchandise-virat-kohliIPL has already completed a decade and some of the teams, which have maintained consistency in players, culture, communication & performance, have developed a large fan base and are completely license ready. With the right strategy, they can create a very successful and long-term consumer product program. At Black White Orange, we manage the licensing program for the RCB (Royal Challengers Bangalore) & I’m happy to say that we’ve already initiated steps in the right direction. Hopefully, it’s a matter of time when others follow suit. With RCB, we’ve conceptualized the strategy, created an exhaustive style guide, found the right partners and products are now in stores! We’re planning to launch products across categories during & after the IPL this year. The support we’ve received from team RCB is immense & that goes a long way in projecting the right image & sustaining the brand.

International Sports Teams will expand their presence –

Football is becoming the preferred sport among youngsters and kids not just in viewership, but also in terms of play time. ISL has had a great start already. The success of the merchandise program is directly linked to the success of the league as well as consistent & competitive performances from the teams.

The NBA probably has one of the highest penetrations as a sport at school level, outside of cricket& are running a very successful grassroots level program. This strategy helps create a fan base at a young age, which starts consuming the brands and products very early.

Popular Sports Stars and their Extensions –

There has been a massive movement in this space with some of the top sports personalities venturing into their own line of products. The internationally co-branded line between sports personalities & brands has seen huge success with the biggest of them being Air Jordan with Nike. Messi and Ronaldo also have a similar line with Adidas and Nike respectively. Closer Home, Virat Kohli has led the way with the launch of WROGN & the recent addition One8, in collaboration with PUMA. Yuvraj Singh’s brand YOUWECAN that launched last year, has also been accepted well by the consumers.

Local Sports Leagues will be a big future

Sports outside of cricket are becoming a big draw and the success of Pro Kabbadi league and popularity of players like PV Sindhu, SainaNehwal& K Srikanth is a big testimony to that fact. There will definitely be some action in this space.

School & College Sports merchandise has massive untapped potential.

This is a 7 Billion dollar business in the US but completely unexplored in India, and as sports become a key part of School & College life, consumption of owning a piece of your school and college team is going to gain massive momentum.

Challenges in India;

Product Design Capability is a big challenge and creating high quality & aspirational creative assets, which translate well into products, is the key ingredient of a successful licensing program.

Indian brands should look at merchandising as a revenue model and not a marketing tool; it needs to invest in creating the right strategy, the right culture and the right infrastructure to get maximum value.

Counterfeit products pose a massive challenge for this business and immediate measures are required to curb this menace.

About the author:

black-white-orange-logoBhavik Vora, Founder & CEO, Black White Orange Brands Pvt. Ltd

A new-age start-up driven by experienced and passionate minds, Black White Orange provides merchandising solutions and helps brands, celebrities, media, and retailers find ways to strengthen their relationship with the most important stakeholder – the consumer. We offer services in retail, distribution, syndication, brand consulting & creative solutions, both within India & overseas.

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Emerging Markets And Brand Licensing by Dave Sharat

EMERGING MARKETS AND BRAND LICENSING
What benchmarks successful Brand licensing in emerging markets ? Surely there are more than one factor that steers the business, in as much as the several pitfalls that render deals going south. It would be hard to have a consensus on all but here are some that would ring a bell from your own times perhaps.
BITING OFF MORE..
This goes both sides of the fence.. licensors and licensees falling on their own swords. Over zealous expectations from a market and the need for presence in a new market on the one hand and in trying to “win”  the license, the prospective licensee often providing the licensor with a “best case scenario” instead of a more realistic case, on the other, are deterrents. The often hyped initial projections will then form the basis to develop minimum sales targets and royalties, which will then go into the contracts. Trouble looms when both sides agree to just about “any” terms in order to have a “get go” and the inability to achieve the objectives ultimately result in a stalemate. Getting in over one’s head, prospective licensees often try to secure multiple regions or channels as part of the deal. This may be because the licensee really believes it can take full advantage of all of the rights offered and sell its product into each of the channels or regions.
Creating unrealistic expectations also comes when licensees may not fully understand the true strength of the brand whose license they just acquired. The licensee may overestimate the power of the brand, believing the brand alone on their product will result in acquiring new clients or larger programs with existing clients.
Licensors often want the licensee to treat the licensed category with the same care they would treat a product category in their own organization. They expect the licensee to develop the product following the brand’s style guides carefully and to follow externally a similar protocol to the one that the licensor follows internally. The licensor wants the licensed product to be of a quality that the licensor would be proud to have on a retail shelf next to the internal product. Optimizing expectations on both sides is what’s key


DUE DILIGENCE 
The classic and most frequent mistake is to assume that a formula for the licensing or franchising of a brand in one market will work equally well, unamended and unadapted, in another market. There are many examples of brands which are large and successful household names in their home markets but have tried and failed in emerging markets.KFC Vs McDonalds in China, HOME DEPOT closing in China whereas B&Q  flourishing by consistently reading the market better have been highlighted before too. The animated cartoon ‘Little Krishna’ which was a hit on Nickelodeon India is another eg. Bu then to launch a merchandising range featuring bath mats and bedroom slippers was a great mistake: Little Krishna was, after all, still a god and never, ever would you place your feet on an image of a god! The lesson is – selling in a particular market would need understanding the minds of the buying public or the target audience. What works in one part of the world may not work at all in another part of the world.

TRANSCENDING BRAND STRENGTHS 
Assuming the brand is as well known and as highly prized in the local market, as it is at home, is another cry. It is remarkable how deluded senior executives in leading “Western” corporations are about how well-known their brands are in other markets. Even with the advent of the Internet, a brand may simply not be known to large swathes of the population in large parts of the world. As a result, in a negotiation with a potential licensee, the brand owner needs to articulate to the licensee the value proposition that is being brought to the table, and not to assume that this “speaks for itself”. Thus in a market which it plans to develop, a licensor would be well advised to offer additional marketing support and funding in order to assist a potential licensee,. This could include allowing the local licensee to get the benefit of bulk purchasing discounts on marketing materials, to offering prizes to fly successful sales staff to the head office. Patience and persistence in building up the brand in critical. A striking example of the difference between what might appear to someone sitting in the UK and what might appear to someone sitting in China is the story of Stockport County football (soccer) club which has just as much as brand resilience as Manchester United but then Stockport County club does not figure in any serious football rankings. This was because of the energetic efforts of the Commercial Manager of Stockport County, who regularly visited China, made sure that Stockport County was known in many different places, organized events and flew the team out for exhibition matches. As a result, the amount of goodwill attaching to the Stockport County brand in China was remarkable – even after the team’s fortunes in the UK had plummeted! At one point, one third of the club’s revenues came from China !

DIVERSE LICENSEE GENRES
Assuming that the licensee in emerging markets will have the same attitude to the license relationship, as licensees in mature markets is overrated. In many emerging markets, e.g. Africa, Russia, the brand owner must educate local licensees about what is involved in operating and managing a successful license, not just simply negotiating a deal, sitting back and waiting for the royalties. In Asian markets, the licensee will often take the view that if the license relationship has an initial term of 3-5 years it is likely (for whatever reason) not to be renewed. Thus they will be pushing for the best returns as they can, as quickly as possible, before the license is taken away from them. This, ironically, is at odds with the emphasis, much spoken of in Asia, about “developing a long-term relationship” with business partners. It perhaps suggests a certain cynicism towards Western licensors. Thus decisions which may not be in the long-term interests of the brand may be taken just to make a short-term profit. Licensors should invest much effort in selecting and educating licensees for the long term, who understand the overall strategy for the development of the brand. Naturally the licensor’s actions should support their long term assurances.

HASTY ALLIANCES 
Assuming one can quickly find the right partner and tie up a successful deal gets in the way eventually. It is very unwise to fly into a country to sit down for a few pre-arranged meetings, expect to tie up a successful and long-lasting deal with a licensee, and fly out a few days later. That is simply not how business works in many emerging markets. The importance of doing whatever it takes to check the track record, background and bona fides of licensees cannot be over-emphasized. It is prudent to invest time and find the right partner or agent. than close a deal with any partner. Plan for multiple visits.

EXIT STRATEGIES
Contrary to the above if a deal has to be done quickly, one must at least make sure that in the license agreement there is an ability on the part of the licensor (and this need not necessarily be reciprocally granted to the licensee) to terminate the license arrangement quickly, easily and cleanly if things are not working out. We know of situations of a license agreement entered into for a key territory for 10 years which was only terminable on breach of contract or insolvency. In a later acquisition of the licensor’s business, the purchaser could walk away from the deal when it discovers the license, not being prepared to buy the business with a commitment to that territory for 10 years and which could only be exited on breach. On the other hand, of course, one needs to give the licensee a reasonable “run in” period in order to establish the business and the profile of the brand and to generate revenue. Three years would usually be a minimum.
IP PROTECTION
Don’t worry too much about protecting your IP – it can be fixed later if need be. Wrong..wrong..wrong ! Especially in markets which are highly liable to infringement and piracy, if anything can be protected, it should be abinitio… not later. What may be considered “adequate” protection in Western markets from a trade mark perspective may well not be enough in emerging markets. The obvious example is the local language variations of the brand, including in local script if applicable. In several Asian markets, a brand will be known by a local  name, whether ones chooses it or not. It is always wise to control this. A similar problem arises if one allows the local distributor or licensee to register the local version of their name. When the parties fall out there is nearly always a fight over ownership.

In addition, all logos should be separately registered (this is not a situation where you should cut costs by registering the word and logo together) and different variations of the name (e.g. MARY QUANT and QUANT MARY.) In addition, domain names should be covered to a reasonable degree, and other types of intellectual property, such as design registrations, should be protected where possible. The more official certificated registrations that are on files, the stronger is the position will be when problems (as they very likely will) arise.

REGISTERING LICENSES
As a sequel to the above there are still some countries where recording a trade mark license agreement perse with the respective government authorities is important. These include China, Malaysia, Singapore and Thailand. This will secure the rights of the actual trade mark owner in terms of “use” of the trade mark, countering any vulnerability to cancellation for non-use, and will enable the trade mark owner to take direct enforcement action. In addition, it can be very important to ensure that royalties can be remitted from the country to the brand owner. In many countries an abbreviated or pro forma version of the license, which does not give away the sensitive commercial terms, is sufficient for registration purposes. Naturally, this kind of registration must be kept up to date when the licensee changes or other significant alterations take place.

SUPPLY CHAIN AUDITS
Failure to carry out checks on the supply chain can be disastrous for the brand owner. There are examples where there has been a good “master” licensee who has done everything required of it under a license agreement in the emerging country, but was given a free rein to appoint sub-contractors (and sub-sub-contractors). The result was that the product manufacture was poorly policed so that overproduction and counterfeits flooding the market. The answer is to exercise a great deal of vigilance over who is to be allowed to carry out parts of the distribution or manufacturing under sub-contract and in default refuse to allow this unless the ultimate brand owner has vetted such sub-contractors. Another aspect of this issue is what might be termed “brand hygiene”. Brands, have struggled ever to recover their public image and credibility after it was discovered that products at the end of their supply chain being made for them in “sweat shop” factories involving child labor. The complexity of the problem gets further accentuated by the fact that once these factories are shut down, the wave of local complaints of it destroying a key part of the local economy have to be combated.

ROYALTY AUDITS
It is extraordinary how many licensors, whether in emerging or any other markets, seem to have a fear and reluctance of enforcing the commonly-included rights of audit under license agreements. The most usual excuse given for this is that “this might be seen as an aggressive move by the licensor”. However, in experience, over 95% of these exercises reveal underpayments of some kind. Very often underpayment of royalties is not done deliberately or maliciously but simply through incompetence or an over-narrow conservative interpretation of what is covered under the license terms, especially as new product ranges come on stream. To overcome the issue of alleged “licensee hostility”, the best approach is to automatically audit all licensees on a rotation basis, say once every two or three years, so that licensees do not feel that they are being “singled out”. Having a pre-revenue audit can be helpful in checking/helping the licensee understand what is required and checking that the appropriate accounting processes are in place.

PIRACY ACTIONS
Some brand owners, comfortable in their home markets, ignore the problems of counterfeit goods in distant emerging markets. Levi’s Jeans is an example in Asia. The problem is that, unless you “stop the rot” early, it will grow and grow.Then the counterfeits not only will flood the emerging markets, but they will begin to start damaging sales in your “home” market. Inclusive provisions for dealing with the problem of counterfeiting in your brand management budget, followed by swift and aggressive action is necessary. This is far easier to do than it was 10 or 15 years ago. Today, there are well organized firms with extensive networks able to give early warning of problems and take swift action. In any anti-counterfeiting programme, the key thing is to make sure that the goods are destroyed (and not merely impounded, because they may well be sold out of the back door by the official authorities once the brand owner has disappeared…) and to make sure that any enforcement action is publicized loudly in the local press so that there can be no question that the counterfeiters know that you are a brand owner who will stand up for your rights. Often in that situation the counterfeiters will shift their attentions to your competitor, who does not take action to enforce its rights, seeing it as a “softer” target.
These are just some of the alerts in the process of licensing brands in emerging markets. It sure requires consideration of multiple issues: legal, cultural and commercial and it is always advisable to seek expert local advice if need be.
About the Author:
Dave Sharat has spent many years in licensing with companies like Disney, 4 kids entertainment and Animation International managing businesses laser focused on markets in Asia including India.
rohit-sobti

Major Licensing Trends in India for 2017-18 by Rohit Sobti

1- Rise in Celebrity brands:
Over the last few years, Indian celebrities have realized the true power of their famous first names and glamorous images. Superstars Salman Khan’s Being Human, HrithikRoshan’s HRX and ShahidKapoor’s SKULT to dazzling divas DeepikaPadukone’s All About You, Alia Bhatt’s eponymous fashion line and BipashaBasu’s The Trunk Label to sports icons Mahendra Singh Dhoni’s Seven, ViratKohli’s WROGN and Yuvraj Singh’s YWC Fashions are a few who have taken their brands to retail with their fashion creations. Nearly two dozen celebrities are waiting in the wings to enter the market with their unique brands across lifestyle offerings. With their name at stake and greater awareness about  Intellectual Property Rights, everyone’s looking for unconventional  and additional revenue streams. Fashion will dominate the category, but celebrities will leverage their brand beyond the conventional, extending it to home, jewellery, accessories segments.

2- New business models:

With greater awareness, better understanding and the evolution of licensing business, new business models are getting executed.In the early days, it was common practice was for the licensee to pay a fee and / or royalty to the licensor for using his name or character. Today, licensors , licensing companies and licensees are co-creating brands, thus introducing joint ventures, acquisitions deals etc.

3- Emergence of corporate brands:

Licensing has predominantly revolved around loved characters and popular celebrities. In recent times, owners of strong corporate brands have become aware of the benefits of licensing. Brands are now exploring how to leverage the power of their established brands via licensing, reach latent markets of brand aficionados and create additional revenue streams beyond the core businesses.  A classic example is Royal Enfield India, which now has stores offering apparel, accessoriesand more, for the growing biking community and is fast becoming a lifestyle brand. Internationally, corporate licensing programs have been solid business propositions approximating $50B in retail sales and forming almost 20% of the $ 250B industry. Corporate Brands will be following the same route in India too.

4- GST will ease distribution and attract new players:

Implementation of a uniform indirect taxation, the Goods and Services Tax (GST, effective 1st July 2017) across the country will eliminate the multiplicity of taxes and reduce the overall high burden and of taxes, thereby improving the overall sentiment for licensing and merchandising players in the country. In the retail sector, GST will lead to easy movement of goods across the states, lessen paperwork, encourage central warehousing and streamlining the supply chain. The ease of distribution and reduced costs will help players to enter tier 2 cities and grow the offline retail presence for licensed products.

5- Need for 360 degrees, licensing solutions:

With licensing business growing stronger and getting more organized with each passing year in the country, there’s an inherent demand for agencies to provide holistic licensing and branding solutions – Concepts, Creative, Legal, Sourcing, Retail Distribution, Promotion, Activation, Social Media etc. this will also aid the cohesive development and execution of a brand through licensing and merchandising.

6. Awareness of LIMA:

LIMA is the largest and most authoritative body on licensing and merchandising across the globe. With international players entering the domestic market, rise in local players in the segment and the surge in business, LIMA’s knowledge will be necessary for seamless growth.  LIMA will also aid in creating awareness, educating and solidifying the foundations of local businesses. Licensing is still looked at as a marketing tool by a certain segment of  manufacturers and marketers and that will see a sea change with the growth of knowledge in licensing.

7- Disney will continue dominance and innovations:

The Indian management of the Walt Disney Company recently restructured and realigned their businesses in the country. Disney will now focus on its two most successful business – consumer products, along with distribution of Hollywood films. Often the two businesses have leveraged  and enhanced each other’s profits. In 2015,  Disney signed 50 brand licensing associations for their tentpole Marvel releases, Avengers: Age of Ultron, thus creating a record for highest number of deals for a film. In 2016 they managed highest number of strategic brand licensing deals for an animation film, with Finding Dory. With core businesses shifting to Hollywood movies and Consumer Products, there will be a new level of innovation and associations in licensing from the leading player.

8- Indian brands will go global:

In the last few years, homegrown properties are also gaining foothold in foreign shores. Bollywood content is already popular in more than 100 countries. Chhota Bheem is becoming one of the most sought after brands in the South Asian markets. Indian celebrities like Priyanka Chopra and Deepika Padukone have become popular faces on  red carpets across the globe. This is indicative of the fact that Indian brands have the potential outside of India too.

9- Reinvention of Retro:

Media, brands, consumer products are reinventing nostalgia for reach and growth. Disney’s latest live action adaptation of Rudyard Kipling’s The Jungle Book is an example. Disney’s India team picked nostalgia as the theme to leverage the film to a generation that grew up  reading the story and watching the series. The film’s box-office collection touched unexpected numbers, setting a benchmark in the country. Chacha Chaudhary, created in 1971, saw a revival and the growth of its brand, again based on retro and nostalgia. Indian players are not only looking at licensing, contemporary characters but also re-looking at classic IPs from the vast treasure trove of Indian stories.

10- More international brands in Indian market:

Many international brands have made their presence felt in India, albeit small at present, this trend is bound to grow. The penetration of and influence of the Internet in everyday lives, the steady economy, the second largest population and their aspirational living, is going to attract more international brands to India as a market.

11- Licensing beyond characters and superheroes:

Traditionally licensing revolved around characters, celebrities and more recently corporate barnds. With the emergence of a new digital  world, the millennials are discovering new sets of admirers, specially the YouTube stars who operate their own content channel. Licensing opportunities will start raising its head for these new stars as well.

12- Awareness of intellectual property rights:

Licensing and merchandising has been essentially a business practice of popular celebrities, characters and established brands. With the steady growth of the business and awareness of intellectual property rights, there will be scope for new and small brands to take advantage of licensing and merchandising. Not only will IPR empower lesser-known personalities and entities, but  itwill enable them to explore unconventional routes to grow their  revenue.

13- Course in licensing studies:

For long, the licensing industry in the country has been thriving on self-learned and motivated workforce to develop and take this new form of business forward. It has been a decade since licensing and merchandising business grew to prominence in India and now there is a growing demand for trained professionals who are well-equipped, understand the field and have knowledge of  the business. Like digital marketing, licensing and merchandising will soon be taught as a professional course for people interested in the business.

14- Retailing and E-commerce Trends:

With the influx of licensing and merchandising in the country, we are getting access to  original products and artworks and the quality of locally-manufactured products, across categories, is improving. Companies like Disney, Viacom and others who started the business in India, adhere to international quality guidelines while creating merchandise for the local market, thus, pushing local manufacturers to adopt better practices. Meanwhile, the retailers, offline (Modern& Traditional Trade) and online, have realized that licensing and merchandising are integral to and crucial for their growth. So more retailers are creating space for licensed merchandised on their shelves. E-commerce  has had a prominent role to play, by taking brands to small towns, that are not served by traditional retail, with lower inventory risks than traditional retail.

About the author:

Rohit Sobti – Co-Founder – Brand Monk Licensing

We are passionate about brands. We understand the Indian market and its consumers, and know what it takes to create, activate and manage a robust Licensing Programme. Our projects are executed with a process driven approach and guided by international best practices. With a full-service design studio that delivers creative graphic designs and Style-guides, Brand Monk Licensing provides content solutions for creating and managing 360° of a Licensing Programme.

LICENSING IN INDIA: A FORCE? by Rahul Gupta

A famous playwright once said “ What you consume is what you become”……

THE CASE FOR THE LICENSING BUSINESS IN INDIA

Today our planet consumes all kinds of natural resources and some unnatural resource as well. When I refer to unnatural resource I mean brands. We eat them, we LIVE them, we drink them and we dream about them. There is no escaping them. Brands hit us in all forms and sizes…be it superheroes, coffee, toys, apparels and even events. They leave an impression on us.

India is possibly the worlds youngest population filled nation. More than 500 million people in India are under the age of 40. They are not just 500 million in number, they are 500 million with smartphones, internet access, good education and an aspirational mindset. If somebody were to find the two inflection points in Indian consumer evolution, I would pick 1991-92,1995,1996 and 2009.

In 1991 India opened its doors to liberalization and a universe of ideas and opportunities.

In 1992 with Tamil Sun TV, India forayed into private television broadcasting.

In 1995 Cartoon Network first launched its India channel becoming India’s first kids channel.

In 2009, HTC launched HTC Dream, India’s first smartphone featuring a Google O/S.

Today we have over 28 million smartphones with data, 857 TV Channels and over 450 million Indians have access to Internet.

The above landmarks represent the landmark shift in consumerism in India.First came great content, then came great fanhood. Today people consume their favorite stars, brands on multiple levels. You might love watching Pokemon on TV, but you can now have a Pokemon lunch box, T shirt, stickers, toys and more. These expanded consumer product/ service related to a specific intellectual property or creative is essentially the face of the licensing industry. Licensing in India largely related to the consumer products space.

Licensing is not very old in India. From my perspective, Licensing industry is an industry created for the fans and people who hold mad love and passion for heroes, brands etc.

The need for licensing is there because somebody needs to assuage the hunger of fans!

The Licensed products consumer group

Lets delve into this. Somebody who knows a cartoon character, star or a hero decides that consuming just on TV/Theatre is not enough. He/She decides to display their love and passion for them by buying a product or service. This act is the first sign that there is a special relationship between the consumer and the brand as he/she buys a product which essentially gives them a license to celebrate this relationship. Kids are top rate consumers in this category as their affinity for their favorite stars extends into dozens of categories. Delhi toddler Arjun Gupta at 6 years owns around 17 different products with Captain America on it. There are countless kids in your locality who do exactly what Arjun or any other fan kid does.These children represent the eruption of a new age consumer, the consumer who wants the fullness/ wholesomeness in his brands experience.

A WORLD DOMINATED BY THE PERFECT CREATION, LED BY CHILDREN

Now what makes a cartoon character or star license worthy? He/She should have qualities which are not present in a normal human being and he/she should generate interest in themselves by their adventures and activitites. For Eg Kids love the costume of Captain America and the principles of “Faith” and “Honor” which guides his stories in beating up bad guys. Barbie still remains every living girl’s dream doll, it just weaves some magic into generations of kids by its appearance. Be it ChottaBheem,Spiderman, Wolverine, Superman or Batman, they all  connect with their fans at some “spiritual” level.

In order for this to happen, companies need to create world class literary characters who suit the palate of a variety of audiences. The writers/creators of characters and superheroes have to create a world which attracts audiences and invites them to live in it with open arms.

AN INDUSTRY TO RECKON WITH

The Indian licensing products industry generates a revenue of over $350 million USD

(Rs 2340 crores) in retail sales according to some estimates but the potential is at least 10 times of that. This industry operates at multiple levels.

First, there is the studio/tv channel/production house who own a hit TV Show/movie etc. Second, there is a licensing division of this company or uses an independent licensing agency to license its cartoon characters or IP’s, Third are the licensees/ entrepreneurs/companies who pick up licenses of different IP’s for different product lines. Eg Hindustan Lever etc. And the last mile is the distribution/retailer ecosystem which sells products to the consumers directly.

The major licensors in India are Disney, Viacom 18, Warner Bros, Dream Theatre, Green Gold Animation, A.I.Licensing, Black White Orange, Carving Dreams and a clutch of selected agencies.

The products range from foods, apparels, toys,board games, back to schools products ( tiffin boxes, pencil boxes, backpacks, stationery products, sports items etc), book publishing and more.

Formula One Grand Prix also gave out license to build The Buddh International Circuit to Jaypee Group which put in an investment of over $200 million.

CHALLENGES BIGGER THAN IMAGINED

If one looks at the organized and unorganized retail market which is pegged at over $24.5 Billion USD in 2015 in a report by IBEF, the size of licensed merchandise business is tiny at $300 Million USD in retail sales. According to a recent study by VcCIRCLE and Technopak, the Indian education industry itself which is home to 10,000 plus colleges and over 1 million schools is estimated to be generating revenues of over $100 Billion USD with over 52% coming from schools alone. The licensing industry pales in comparison. WHY?

Lets try to get a perspective…

A SEMI BAKED PIE

Licensing is an extension to the entertainment business which is already reaching 75% of Indian households through television, mobile phones, radio, internet. This ensures the brands get a huge audience and fans. So what is the reason the sales are so tiny. A lot of Licensees complaint of not being offered a fair market to sell in. As in piracy and smuggled goods reach retailers very fast who are not willing to pay the steep license fees and minimum revenues share. The case of for MG’s come from the high expectations of the Indian retail business. Somebody high up in Disney or other studios drum up the logic of a country of half a billion target consumers with at least a billion dollars in revenue. The reality of this is quite different. These overestimation of business revenues from India results in this lopsided state of the licensing industry in India. Then there are sectoral problems like high real estate prices, high rents and expensive man power. Otherwise what will explain this mismatch of $300 million USD for a market size of at least $20 Billion annually. Moreover 95% plus retail business owners (small family run businesses) in India don’t know about licensing and its benefits.

I have been engaged in producing and executing kids expos and help children brands improve their brand experience for over half a decade.The kids market is attracting 100’s of new entrepreneurs joining in every year.

In my experience , the following benefits can enable entrepreneurs kickstart their businesses from the licensing business. :-

1. The Licensing business already gives you a readily built brand. For an entrepreneur that’s the toughest thing to do. Telling a customer who visits your store about who Doraemon/Angry Birds is a non existent issue. The buyer knows exactly what he wants, all you need to do is give a good product at a competitive price.

2. Connects the entrepreneur to a global brand and its practices. As a license is obtained, a licensee is expected to match up to high quality manufacturing which ensures global exposure to him/her.

3. As we head to GST, and a more sharper tax regime, the licensee is far better equipped as he tabulates and manages his numbers more transparently as opposed to a regular business owner.

4. Content for television and film is exploding at the seams which ensures that the licensing business is here for many years to come. This should help entrepreneurs to plan for the future and even raise capital. Content ensures that the fan is always ready to buy a product.

5. The humongous growth of modern retail is here to stay, giving larger shelf space and more visibility to licensed products.

6. The potential of the kids space/licensed products is immense and is fundamentally a strong consumer story.

NEED FOR THE GOVERNMENT TO STEP IN AND TREAT LICENSING AS A PURE INDUSTRY

As licensing industry is only at less than 1% of its minimum potential, the Govt should look at Licensing as a made to order industry at a time when they are cracking on black money, changing currency and continuously reforming the tax structure. Licensing has everything transparent to offer. A good clean ecosystem, a sector which deals with the future generation of the nation and a unicorn area which can explode if given support.

I feel the government can do the following things :-

  1. Set up a Licensing committee at FICCI and CII to give the industry a voice on a big platform.
  2. Educate entrepreneurs and people in general through start up India and Make In India initiatives as a business/job of choice.
  3. Engage the I&B Ministry in the industry more actively
  4. Set up a anti piracy task force to crack down on fake goods in the market. This itself will give a revenue fillip.
  5. LIMA India should be involved in policy making to do with children consumer group.

 

THE FUTURE

In a country dominated by fans with their undying love for sports and entertainment, the future is nothing but bright for licensing businesses. With increasing tele density and wider coverage of 4G networks and a vast network of cellphones retail, content will reach more than 90% of India’s population. This will give fillip to both Indian and foreign content. Netflix and Amazon Prime TV have set up massive budgets for local content production in India.

Recently Mattel India created the exclusive Krrish action figures and merchandise for The Krrish movie franchise. The products were of world class quality. It was the first time an Indian IP went into such high quality merchandise strategy. Green Gold Animation’s stellar ChottaBheem character too has crossed borders by having a growing base of fans in Asia.

Theatrical Films release of Hollywood titles now has parallel release dates in India as with the US and other western markets. This keeps in full access to their favorite superheroes and cartoon characters.

India should eventually create an ecosystem of top rate licensed and should be the worlds top 5 licensing market given its enormous population and love for entertainment and sports.

Entertainment and Event properties are mushrooming all over India. IPL , ISL and Pro Kabaddi League are India created IP’s which can do phenomenally well as they are having a hug fan base.

In addition, the digital and web ecosystem are creating their own superstars like AIB,TVF etc.

Its my view that licensing as a business will grow exponentially. It just needs the right support and a fair playing field. With a revenue potential of billions of dollars, the Govt. should have a look at this promising industry which will benefit the consumers and the establishment.

Godspeed!

 

About The Author:

Rahul Gupta is the Founder of World Children Expo(WCE) in India. In addition he runs a brand consulting outfit which helps kids focused brands/start ups in the edtech and retail spaces in fund raising and improving customer experiences.Rahul earlier worked with The Gotham Group in Los Angeles. He Holds a CFM from New York Film Academy and an MBA from S.P.Jain Institute of Management & Research, Mumbai.