“Licensing helps to get products at a cheaper price”

Ms Nidhi Modi

…says Ms Nidhi Modi, Executive Director, Radiohms Agencies Limited (RAL). RAL is one of India's largest Channel Distribution Company dealing in FMCG brands. It has Joint Venture partnerships with brands like Ericsson, Matsushita and Panasonic. Catering to more than 5, 00,000 retail outlets and 100,000 plus wholesale outlets across the country, covering the smallest village grocery shops to mega lifestyle chains and hyper markets in metros. Ms Modi in conversation with Vrinda Oberai, License India, gives an insight into the company’s licensing activities.

Vrinda Oberai (VO): Are you the exclusive distributor for the international brands – Nippo, Glide and Nuby, in India? Do you also manufacture the products offered by these brands in India?
Nidhi Modi (NM): We are the exclusive distributor for only Glide and Nuby in India. No, we don’t manufacture the products offered by these brands.

VO: What are your plans to introduce and distribute more international brands in the near future in India via the licensing route?
NM: We are in talks with several brands which are domestic as well as international to distribute in India. We judge a brand on a few parameters like its market size, brand strength, the parent companies’ business plan and their marketing plan to build the brand in India.

In the absence of these factors, it is not possible to successfully launch and establish a brand.

VO: When it comes to drafting a licensing agreement with the parent companies, which are the highlighting points for both the licensor (parent company) and the licensee (in this case-your company)?
NM: For both the companies, it is very important to follow and verify certain things like duration of the agreement, royalties attached and exclusivity.

VO: How do you perceive the current and the future market scenario with respect to licensing?
NM: Currently the market size is not that big but as costs are increasing globally, more and more companies are moving to licensing.

Licensing for any company helps to get the products at a cheaper price as the importing costs are not involved. Thus, licensing benefits not only the licensor and licensee but also the customer, which thereby increase the sales of the products.

VO: What percentage of the total revenue generated is contributed by your licensing ventures?
NM: Currently, less than 5 per cent, but we aim to make it 25 per cent in the next two to three years.

VO: How do you see the future of licensing with respect to FMCG products and how it can help retailers explore various non-core categories in conjunction with reaching a variety of audiences?
NM: This will depend on critical mass volumes. If the volumes are large enough only then will it be viable to license rather than just import from foreign countries.

Interviewed by Vrinda Oberai