Licensing & Brand Extension Trends in India
Major Licensing Trends in India for 2017/18
1. Rise in Celebrity brands
Over the last few years, Indian celebrities have been realizing the true power of their famous first names and glamorous images. Superstars Salman Khan’s Being Human, Hrithik Roshan’s HRX and Shahid Kapoor’s SKULT to dazzling divas Deepika Padukone’s All About You, Alia Bhatt’s eponymous fashion line and Bipasha Basu’s The Trunk Label to sports icons Mahendra Singh Dhoni’s Seven, Virat Kohli’s WROGN and Yuvraj Singh’s YWC Fashions are the few, who have created a space on the retail shelf with their fashion creations. Nearly two dozen celebrities are waiting in the wings to throng the market with their unique brands across lifestyle categories. With their name at stake and awareness about strengthen of Intellectual Property Rights, everyone’s looking for unconventional additional revenue streams. Fashion will dominate the category, but celebrities will acquaint to leverage their brand beyond the conventional, and extend it to home, jewellery, accessories segments.
2. New business models
With the emergence of awareness, understanding and evolution of licensing business, newer deals and business models are beginning to be adopted in the industry. In the initial stages of licensing business in the country, 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 been predominantly revolved around loved characters and popular celebrities. In recent time, owners of strong corporates have become aware of the benefits of licensing as a route to leverage the power of the established brand, reach latent market of brand aficionados and create additional revenue streams beyond the core businesses. Classic example being, Royal Enfield India has stores catering to the needs — apparels, accessories, Bike Gears and more — for the widespread biking community and becoming a Lifestyle Brand. Internationally, corporate licensing programs have been long-term staple of the business approx. $ 50B (20%) out of $ 250B industry , which will follow suit in India too.
4. GST will ease distribution and attract new players
Implementation of a uniform indirect taxation — (on) Goods and Services Tax (GST, effective 1st July 2017) — across the country will eliminate multiple and excessive taxes, thus improving the overall sentiment for licensing and merchandising players in the country. In the retail sector, the GST will lead to easy movement of goods across the states, less paperwork, single tax, Central Warehouses thus adding more vendors in the supply chain. The ease of distribution and reduce costs will aid players to enter 2-tier cities will offline retail.
5. Need for 360 degree 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. It also aids towards cohesive development and execution of a brand through licensing and merchandising.
6. Awareness of LIMA
LIMA is the highest and single 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 surge in business, LIMA’s knowledge will be necessary for seamless growth. LIMA will also aid to create awareness, educate and solidify foundations of local businesses. Licensing is still looked at as a marketing tool by a small proportion of manufacturers and marketers.
7. Disney will continue dominance and innovations
The Indian management of The Walt Disney 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 to enhance each other’s profits. In 2015 Disney signed 50 brand licensing associations for their tentpole Marvel release, Avengers: Age of Ultron, thus creating a record of the highest deals for a film ever. In 2016 they managed highest number of strategic brand licensing deals for an animation film, with Disney.Pixar’s 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.
9. Indian Brands will go global
In the last few years, homegrown properties are also gaining foothold in foreign shores. Chhota Bheem has become one of the most sought after brand in the South Asian markets. Indian celebrities like Priyanka Chopra and Deepika Padukone have become popular faces on the foreign red carpet now. This is indicative that Indian brands are looking at spreading wings and flying far away. Bollywood content is already travelling to more than 100 countries.
10. Reinvention of retro
Media to brands to consumer products are reinventing nostalgia for reach and growth. An indirect citation of the reinvention of nostalgia meted success is for Disney’s live action adaptation of Rudyard Kipling’s The Jungle Book. The Indian division of the Studio picked the sweet spot of nostalgia to leverage the film across a generation who grew up watching the series or reading the original stories and a new fan base of millennial in the country. The film’s box-office collection touched unexpected numbers, setting a benchmark in the country.
Chacha Chaudhary, created in 1971, was revived and the character was licensed for products across categories due to its strong and wide fan base in the country. Indian players are not only looking at licensing contemporary characters but also old classic IPs from the vast treasure trove of Indian stories.
11. More international brands in Indian market
Many international brands have made their presence felt in India, yet it’s a small number of the total of established. The dynamic penetration of and influence of the internet in people’s lives, the steady economy, the second largest population and their aspirational living, is going to attract more international brands to enter the market.
12. Licensing beyond characters and superheroes
Traditionally licensing revolved around characters, celebrities and more recently corporates, but with emergence of a new world that is always connected through the digital medium, millennial are discovering new set of admirers and aspirations every day especially the Youtube stars and Popular channels.
13. Awareness of intellectual property rights
Licensing and merchandising has been an essentially a business practice of popular celebrities, characters and established brands. With the steady growth in this 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 enable them to explore an unconventional route to raise revenue.
14. 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. As it’s a decade since licensing and merchandising business arose in India, there’s a rising demand for trained professionals who are well-equipped, understand and have knowledge of business. Like digital marketing, licensing and merchandising will soon be taught as a professional course for people interested in this business.
15. Retailing and E-commerce Trends-
With the influx of licensing and merchandising in the country, we are getting access of original products and artworks and hence the quality of locally-manufactured products, across categories, is improving. The foremost companies like Disney, Viacom and others who initiated the business 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 realised that licensing and merchandising are integral and crucial for growth. Thus, all the players in the segment are including licensed merchandised on their racks. While retail stores extend brand customers, e-commerce takes the brand to small towns with low inventory risks.