“Licensing is the business of the future!”

Mr. Kelvyn Gardner

…says Mr Kelvyn Gardner, MD, LIMA-UK. Mr Gardner has been involved in the international licensing business for almost thirty years. It was in 2006 that Mr Gardner became the Managing Director of the UK division of LIMA, the Licensing Industry Merchandisers Association. Mr Gardner in a candid conversation with License India shares his elite views about licensing around the world.

License India (LI): What according to you could be the reason behind India taking so long to adopt the concept of licensing?
Kelvyn Gardner(KG): The business of licensing exists in the West for past fifty years or more. The primary reason as to why India has taken long to adopt this practice is the comparatively late advent of organised retail in the country.

Also, Indians were a little laid back when it came to patenting their innovations, which has improved a lot in the recent years. Patenting a product/design/innovation is the first step to leverage the benefits of licensing in converting a product into a brand.

LI: Do you see a synergy between Indian’s current licensing scenario which is in its initial phase and the initial phase of licensing in the West?
KG: It’s difficult to compare the two. India being a land of diverse culture and multiple languages imposes a lot of challenge for international companies/brands that intend to venture India. It is extremely difficult for foreign brands to understand the nerve of customers based in different regions to cater to their requirements. It is extremely difficult to gauge what will be a hit and what not across the nation.

For instance, consider character licensing. There are children who understand English at the same time there are others who only understand their respective mother tongues. This makes it difficult for stake holders into character licensing to address them in uniformity as their preferences in terms of cartoon characters vary.

However, the factor that works in India’s favour is the television. When licensing was catching on in the West, in the 1940-50s, there was no TV which is undoubtedly a major source of information transmission. India, on the other hand has this advantage of having various TV channels, unlike the West, to compliment the business initiatives in the field of licensing.

Licensing is definitely the business of the future.

LI: What is the most important aspect of licensing?
KG: The intellectual property-product alignment has to be kept in mind to ensure that the right products are introduced in the right categories.

LI: Which are the sectors which experience maximum introduction of licensed merchandise in India? What is the target audience, in general, for such merchandise?
KG: There are different sectors like apparel, publishing, and toys etc which form the prospective categories for licensed products. About 40 per cent of the India population comprises youth, which is the group that is targeted the most for licensed merchandise.

Also, children form a considerable chunk of prospective customers for character licensed merchandise.

LI: How does it work, is it always a licensor who takes the initiative and approaches a licensee/manufacturer or it also works the other way round?
KG: It happens both ways as both the stake holders in the licensing arrangement are in a win-win situation. Thus, both are keen to make the most of each other’s brand value and benefit out of the arrangement in the best possible way.

LI: What are the criteria to identify a prospective licensee?
KG: There are several factors of concern like product development, quality of product manufacturing, ability to reach out to customers via a strong distribution network, and financial strength among other things.

LI: Is there is a benchmark for licensing fees/royalties etc in the licensing industry which is followed across nations and across categories?
KG: Usually, the royalty asked by a licensor is anywhere between 5-20 per cent. A lot also depends on the product category and volume of the product etc.

LI: How aware are the brands/businesses/customers in India with respect to licensing?
KG: There is a lot of awareness vis-à-vis what it was a couple of years ago, given information drivers like mass media, publishing, events and shows etc.

Interviewed by Ccholena Chaturvedi, written by Vrinda Oberai

Interviewed by Vrinda Oberai