India is the next big opportunity for western brands to leverage their intellectual property rights, at a time when the legal system here has created the framework for cross-border trademark licensing, coupled with projections of more than 50 per cent growth in retail sales to nearly $550 billion here over the next few years.
In addition, with 40 per cent of the population here below the age of 15, along with global licensing revenues of just 1 per cent, the long-term growth opportunities for licensing are very promising. The growing wealth of the Indian middle class has led to increased demand for licensed products, and retailers are allocating more shelf space and product choices.
Licensing is also fast gaining acceptability with several international brands entering the market, coupled with established Indian companies who have recognized the opportunities from licensing Western brands, and their resulting ability to defend and even improve market share.
The key trends related to licensing of western brands here:
- Corporate brands – It continues to be one of the fastest growing areas of licensing opportunities in India, and allows for additional product lines of a brand, beyond its core product category, and also creates an additional source of revenue. Several international brands across categories have entered India including Pampered Girls, Mountain Dew, Ford, Beverly Hills and Crew Only, amongst others, and have also entered into licensing deals with local companies in a variety of product categories, including jewellery, apparel, lifestyle accessories, toys and gifts
- Fashion brands – It has become one of the hottest categories as consumers are buying more licensed products and brand names, than ever before. Some Indian brands have had limited success with licensing, but western brands dominate this segment. The global fashion majors such as LVMH, Roberto Cavalli and Elle are among the new entrants in the Indian fashion scene, and expanding their reach in stores here is a key objective. In addition, LVMH, Elle, Waverly and Ed Hardy, amongst others, are just some of the big brands that are actively pursuing licensing opportunities here
- Licensed entertainment merchandise – Bollywood, is creating a number of licensing opportunities in this segment, with movies like Krrish 3 and Ra One. However, Indian movies have still not leveraged licensing opportunities like Hollywood, by capitalising on sales of licensed products at retail before a movie releases. Television is also increasing character licensing in India, with well known properties like Power Rangers, Ben 10 and WWE. In addition, Chotta Bheem is becoming a popular TV shows for children and licensing opportunities in a variety of categories including apparel, gifts, publishing, stationary and candy, amongst others
- Celebrity licensing –Movie stars, TV personalities and sports stars are driving sales for their licensed merchandise, coupled with legendary icons like Elvis Presley, Michael Jackson, Marilyn Monroe, and Princess Diana. Cricketer Harbhajan Singh recently entered into a licensing deal for a brand – Harbhajan Da Dhaaba. Apart from that, the India Premier League (IPL) licensing program has extended the brand into a variety of merchandise categories including T-shirts, caps, cricket gear, stationery, bags, retail bars and cafes. And, given India’s cricket crazy population, the IPL is set to be one of the biggest licensing games here
Licensing is still a small but fast growing business model in India, and some of the best opportunities for western brands are in fashion, entertainment, consumer electronics, household appliances, food and beverages, amongst others. In addition to the brand license, technology from the brand licensor can also be strategic for the Indian licensee.
Design rights, design support, patents, manufacturing technology, recipes and other proprietary rights granted to the Indian licensee, help make the brand more attractive and sustainable. Licensed products based on western brands that have the look and feel of the brand will have the best chances of success in the Indian market.