Talk about the licensing industry around a decade ago, and one could only think of characters and TV properties conceptualised and extended into various categories. But now corporate licensing has emerged as an effective strategy to get major brands on board and tap a wider and a mature target group.
In licensing and merchandising industry, it is not about when a property or brand forays in India, but about when it is taken. Talking from licensee’s perspective, 6 years ago corporate licensing was a model only for certain kind of licensees so only big conglomerates used to practice corporate licensing. Others were peculiar about the characters and properties on screen.
The conglomerates like Reliance, Arvind Madura Garments were the league where corporate licenses were taken and extended. For instance: Espirit, the fashion and lifestyle brand falls into corporate licensing; Tommy Hilfiger first entering India through Murjani Group, the arrangement between Van Heusen and Madura Garments, Louis Phillipe, Arrow etc. taken by them. However, licensing was restricted to a certain level only, but in last 3 years, the entire market has changed, not only for corporate but every single genre.
Corporate licensing is pretty much booming in India. Such a strategy is not just an opportunity to enter India; it is about somebody taking the license as well. There is a plethora of conglomerates that have marked their presence in the licensing and merchandising industry but failed to make it to retail shelves.
How it started in India? Indian trade saw the light of different kind of licensing opportunities with corporate brands foraying into India. Initially people were very eccentric with just character licensing. The mindset was such that whatever is there on TV will sell which ruled the industry for decades. That perspective started changing with other brands being available. Bradford was the first one to get anything like that.
Other agencies and people who were into licensing gamut at that point of time were only and only practicing character licensing. We were one of the pioneers to get football clubs in India under proper licensing program besides of course Manchester United forming a retail alliance with Future group.
Be it sports licensing, corporate licensing, character licensing...it saw a complete shift in the way people perceived licensing. People are now more open to talking about licensing. When we started 10 years back, people were clueless about licensing and our pages were very different from what they are now. Things have really changed and the change has happened for multiple factors. Under corporate licensing, there is complete shift in the way people perceive and it is happening in every single way possible. Starting from mobile phones to stationary, home décor to fragrances and apparel to accessories, every single industry is now actually practicing licensing and going beyond characters.
Some licensee at that point of time had the maturity of leveraging on the model of corporate licensing and hence carved a niche for themselves. Now many of the people don’t even know that brands such as arrow and Van Heusen are not owned by Arvind, but have been licensed to them.
Then came a time when there came a clear dearth of brands in India. That is when corporate licensing became a feasible model for people to venture into brands. Then came retail boom which lead to crunch in shelf-space as retailers were only interested in stacking up ‘brands’ instead of entertaining every merchant. That prioritizing happens only through the brand power.
Today a lot of start-ups have entered into the retail eco-system who have fantastic quality but are not established as a brand power and hence face the credibility issue. In that case, getting a brand on-board benefits them the way a brand is to the retailers. People have now started looking at brand licensing as not just a mere tool to get brands, but a strategic tool for scaling up in their business.
Character vs Corporate The kind of licensing complete depends on the brand’s strategy and the target audiences and more than anything; it is majorly the target group that drives the licensing model. And also the investment capacity plays an important role in here. If suppose I extend Crocs kids to a licensee vs Cartoon network owned Ben 10. While the license in case of ben 10 is not available for more than 3 years in a row (both the parties have to renew the license), a corporate licensing deal will be no less than 5 plus 5 i.e. 10 years deal.
Again under character licensing I cannot do complete brand launch, it has to be one of the collections under my brand. If I am Mom &Me for instance, the collection would be a part of my entire collection and not a different store altogether. But if it is Marie Claire Kids, the licensee can have a Marie Claire kids store altogether or a shop-in-shop. Character licensing is at maximum restricted to shop-in-shop as the licensees lack the bandwidth to fill up an entire store. If it is Zara kids’ there would be entire store, but if Zara kids launch a Ben 10 Omni-verse collection as a licensed range, it is going to be one of the collections at Zara Kids store.
What’s in demand? Again the selection of brands for licensing varies from retailer to retailer. If it is the premium retailers, then they’d hunt for brand that are reputed and have a fashion appeal so as to woo the upper middle class and affordable luxury segment.
Thereafter we have certain retailers who have penetrated amazingly, but though unorganized retail and now want to be a part of modern trade. There they want a license which is not very niche but mass. They aren’t comfortable with niche segment.
Another segment is electronics and mobile segment where everyone has their own aspirations. Mass appeal is required along with a clear-cut positioning that a retailer wants to have in that segment. That becomes specific ambit for licensing.
Corporate licensing is also branching up in a lot of categories with real estate being the booming category. We see a lot of real estate developers approaching us for Paris Hilton, Lamborghini, Ferrari etc. and we have closed a deal for Fashion TV with Home & Soul.
...as narrated to Gargi Bhardwaj.