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.