Siddharth Chury, Associate Vice President, Global Partnerships, NBA India talks about the transformation of L&M industry in accordance with increasing fad for sports IPs.
As a global licensor, how have you seen brand licensing transform in the last five years?
The licensing business in India has witnessed a lot of growth in recent years which can be attributed to the increase in exposure & aspiration - Not only are consumers more exposed to global brands & IP's, but even licensees & retailers are more & more aware of the potential of licensed merchandise. Similarly, consumers, licensees & retailers, all aspire to associate with premium official global IP's, because that adds an inherent premium value to themselves.
The NBA benefits enormously from the fact that not only is it premium, aspirational & cool as a band, it also has a huge influence on overall popular culture [music, fashion, entertainment, etc.], well beyond the boundaries of the court & the sport. So, our consumers are not limited to fans of the sport, but span a wider group that are fans of "NBA Culture".
What according to you are the factors propelling the growth of licensing and merchandising industry in developing markets like India? How do you perceive these markets for sports licensing growth in next 2-3 years?
The market for sports licensing is expected to grow at a rapid pace. The already existent brands [e.g. NBA, Premier League, LaLiga etc.] are growing at a steady rate. The NBA itself added more than 30% new fans on social media platforms to its already large India fanbase just in the past 6 months; mainly propelled by a thrilling NBA Finals with the Toronto Raptors being crowned NBA Champions for the first time, and of course due to the immensely successful NBA India Games 2019 in Oct.
All these new fans are also new consumers for us. More importantly, they are also our brand beacons, spreading the love for the NBA throughout the country.
While the NBA continues to be active in traditional licensing categories like apparel, footwear, headwear, bags, socks, watches, sporting goods, etc.; in recent years we've seen the maximum growth in newer categories like gaming for example - be it NBA Fantasy gaming with Dream11, our console games with the NBA 2K series, our mobile games, etc. We're also actively exploring establishing a stronger presence for NBA's physical destinations - whether flagship stores, cafés & sports bars, experience centres, etc. This is of course a more long-term approach.
Traditionally character licensing with kid's merchandise had taken up majority of the licensing sphere but sports IPs have been on the rise recently. What in your opinion is causing this shift?
That's true. Earlier, licensing in India used to be limited to only entertainment & character licensing. Over the last few years, sports licensing has emerged as another strong pillar and has grown by leaps and bounds. This is especially true with the youth, as they are often early adopters to new & emerging trends. We believe it's been spurred by exposure to a lot of international sports properties in India. Football leagues, basketball leagues, sports properties from the US & Europe; they've been exposing India to their content across multiple platforms, building their fanbase, and eventually have started establishing their licensing programs. So that's what's led to the growth in sports.
What are the challenges in terms of penetrating the Indian market which is dominated by cricket?
Cricket deserves its due respect, being ahead of any other sport in India in terms of fanbase & viewership. However, there has been quite a visible shift in the landscape since the past decade. Indian youth, especially in urban India, are keen to adopt sports other than cricket, not only to play but also to consume across a variety of platforms. Leisure time, recreational spaces, and attention spans are all shrinking in the country; kids are looking for fast-paced sports which can be played in a smaller place in a shorter amount of time. Which is why basketball and turf football are the fastest growing sports these days. Even if you see examples like the Khelo India initiative by the government of India & the national games, that's also promoting the concept of playing multiple sports. India is no longer a cricket-only country, and hence it's no longer a challenge to sell the NBA here.
Also, interestingly in the merchandising space, we tend to have some advantage over cricket. Global leagues & teams across football, basketball, tennis, etc. have a much bigger licensing program in our country than our home-grown local sports leagues. We believe on one hand this is due to the higher aspiration & "cool" factor of the global properties among consumers, and on the other hand due to their more robust licensing processes & guidelines built through years of experience.
How are current and yesteryear players a good opportunity for licensing? Do you see the trend picking up in India?
Sports fandom is built primarily on two pillars - inspirational/unforgettable moments and star players. Sports stars not only influence the game, but often also the prevalent culture & society overall. I'm sure you remember, in the 90's everyone wanted to be like Michael Jordan; in the 2000's kid wanted to flaunt an attitude like Kobe, dress like Iverson, entertain like Shaq. While LeBron & Curry have been the most recognized faces in this decade, there are new stars beginning to shine on the horizon. A lot of these stars have massive personal endorsements & licensing deals. However, the real magic happens when the players, teams & league all come together as a package.
In India, cricketers have enjoyed such star status for decades, but now stars from other sports are also beginning to shine; and it is beginning to show in several endorsement/licensing ventures for these non-cricket stars. It's also true that often many global stars are far bigger in India than our own homegrown stars. As Indians continue to improve their performances on a global stage, this balance will also start tilting in our favour [e.g. badminton].
The NBA brings current players & legends to India every year. Seeing the active fan following they have here, a number of them are also looking to build stronger direct ties with India & pursue endorsement/licensing deals of their own. So overall, this space is only going to keep growing.
5 important strategies for successful brand licensing in your view. Also, please tell us about some of your recent collaborations.
I'm not sure there's a standard list of strategies that deliver success; to me it seems like different licensors have different game plans. For me personally, it's been an ever evolving & learning process. We've needed to be iterative as well as opportunistic as the situation demanded. We've also taken a leap of faith from time to time, which has often resulted in great success. For example, the NBA was the first global league to license an official fantasy game with Dream11 in India. Today, that partnership has grown into one of our top success stories.
One of our relatively new partnerships is the NBA Fanwear apparel range with Suditi Industries. Due to their awesome collection & great relationships in retail, in just a few months NBA Fanwear apparel is selling is more than 110 outlets among premium department stores.
Also, this season we've transitioned our official ecommerce destination NBAStore.in to Myntra.com. There's a lot of potential to grow this partnership to engage with millions of consumers & deliver a very lucrative year for both partners.
Also, on the sponsorships side, having NBA Games in the market helped us bring on board & activate many partners, including Reliance Foundation, ACG, Dream11, Gatorade, Harman International, JIOSaavn, Myntra, Nike, Tissot, Visit California.
Without trying to sound like some licensing guru, which I'm certainly not, I could share a few tips .
. Build the fanbase, create demand - Brands should invest the time, effort, and money in first building their fanbase & creating a demand for their brand & product, especially in a new territory. Only once they've reached a critical mass, should they look to start monetising in the market. Patience & long-term vision is important; not everyone has this though.
. Storytelling - Even once a brand has the fanbase & the demand, merchandise won't fly off the shelves without storytelling. You need to give the consumer a compelling reason to buy & buy now. Themed collections, popular athlete/team inspired collections, collaborations, marquee event-based ranges, products celebrating key moments . all this goes a long way in driving sellthrus.
. Brand value & fit - When selecting the right licensees to partner with, it's important to first ascertain the right value & positioning of your own brand, and then align with partners & categories that reflect the same value. Eventually from the consumers lens, it should look like an ideal match, not some odd misfit.
. Segmentation - This leads off from the previous point. Consciously use different partners and create different product ranges to best suit your intended different consumer segments. Segmentation can be based on various factors - consumer demographics, geographical spread, retail formats, etc. A one-size-fits-all approach rarely works.
. Don't oversell - This is probably the most difficult element. When a brand is successful, the common tendency is to try and milk the market. I've seen this often leads to clutter in the market, too much product trying to get a share of the same wallets, sales expectations far exceeding demand; and then eventually licensees suffer, as does your brand. Better to use a measured approach in your expansion strategy.