Tapping Bollywood glam

It is a very simple proposition – take an A-list celebrity (music, movie, TV, fashion) with clear brand attributes; develop thebrand extension opportunity; test the concept and understand the target demo; find a category/retail expert to partner with; and launch a new business. This has translated to multi-million dollar businesses for celebrities such as Britney Spears,Jennifer Lopez, P Diddy, Jay Z, just to name a few, across a plethora of categories from fragrance to apparel to children’s educational tools.

 

THE INDIAN TOUCH

 

In India, a country that treats its celebrities like gods, it would seem logical to develop robust celebrity brand licensing

programmes. In fact, Amitabh Bachchan, arguably the most famous celebrity to grace Indian cinema, was forward thinking

enough to launch his own branded products in the late 1990s. However, because of the lack of modern or organised retail

and a few other significant issues, it met with little success. Fast forward 15 years, retailers and manufacturers today still

use that as a case study as to why Bollywood celebrity licensing would not succeed in India. Now that modern retail is here

and growing fast, it is the perfect time to introduce a programme like this.

 

To understand the opportunity in the context of numbers, it is important to understand the macro retail landscape.

Organised or big-box retail today makes up about 7% of the retail market in India, which is roughly $30 billion, according

to a recent AT Kearney study. Within this world, sales turnover numbers of some of the top brands in India are roughly as

follows: Benetton – $100 million, Nike – $150 million, Reebok – $350 million, and Levi’s – $100 million.

 

So, can a celebrity brand do these types of numbers? Absolutely, no doubt! An A-list Bollywood celebrity’s media machine

is literally unaffordable and cannot be rivaled by any brand in India. In fact, if you have the right celebrity, the right brand

extension, at the right price, I believe the opportunity can be much larger.

 

CRUCIAL CRITERIA

 

However, it is not about putting a celebrity on a product, for example, fragrance, which is something we are seeing in the

market. It is absolutely crucial to:

 

Find the right A-list celebrity in India with very clearly defined brand attributes (I believe there are only 3-4 in the market).

Due to the large and over-saturated endorsement market, a celebrity will often endorse an apparel brand, computer brand,

pen brand, watch brand, tyre brand, cement brand, shoe brand at the same time. In this case, the celebrity, no matter how

famous they are, has diluted their brand – launching their own brand would undoubtedly confuse the consumer and enforce

the logic that their brand is no more important than a brand they are endorsing.

 

Define the extendable categories and understand if there is a retail opportunity or gap in the market. Looking at

the fragrance example, one, there isn’t a large retail opportunity or gap (in revenue terms), and two, there is a lot of

competition from top tier global brands with significant brand heritage and recall. By launching in that product category,

the celebrity brand is setting up for a tough battle for very limited market share.

 

Extensively test the brand/concepts/price with consumers.The celebrity or licensing agency must clearly understand the

target demo and understand their price elasticity and propensity to purchase the product. By realising that the hardcore

fan following for most of the celebrities are primarily in the Sec B class, a celebrity or manager might think twice before

launching unaffordable $40 cologne. It is important to determine – one, who is the target demo? Two, does this target demo

purchase what you are trying to sell? And three, can they afford the product?

 

Find the appropriate manufacturing/retail partner who has the distribution capability and believes in the opportunity and

will invest in the long run.

 

EXPLAINING BY EXAMPLE

 

Playing the scenario out further, assume a celebrity brand can compete with and command the same marketshare as Levi’s (one of the most successful brands in India). If a $100 million business is built in five years, the celebrity can earn $10 million in Year 5, with a 10% royalty rate. The opportunity cost to the celebrity for those five years is the amount of money

they could have made doing endorsements for that specific category, based on the current market could easily be 3-4 times

of their potential royalty revenue. Taking a hot newcomer and proposing this model will fall on deaf ears because this

would preclude him/her from a consistent and much needed revenue stream, a Land Rover, and a nice flat in Juhu that is

achievable via endorsements compared to a business opportunity that may or may not work via brand licensing. So, who is left? Essentially, the A-list star with a big bank account, who can not only take a chance, but believes in creating an evergreen property and differentiating themselves in the market. All that is left is to get past the agent, brother, or cousin who is managing their business affairs and whose salary is based on commission generated from transactional

deals (ie endorsements).

 

THE FINAL NOTE

 

In the US, it is easier, opposed to 10 bankable stars, there are 100, and the retail market is very sophisticated and mature.

 

However, to be clear, there is no doubt that Bollywood celebrity licensing is and will be a huge opportunity in India, but

it has to be executed with strategic rigour, a forward thinking celebrity and management team in place, and a retailer or

manufacturer who is willing to change the game and not follow their peers.

 

Case and point – look at the Hrithik Roshan and the Hot Wheels/Team Xtreme partnership that was developed by my

agency and Talent Management Company – Carving Dreams with Mattel. There is an A-list celebrity with very clear

brand attributes and position that is synonymous with Hot Wheel’s brand attributes, there is a very clear target demo and

strategic objective, and there is top manufacturer/retailer developing and marketing the programme, resulting in a tent-

pole programme that will launch multiple categories of consumer goods, nationwide, with global potential. Strategically

speaking, this is the most exciting celebrity brand extension that has been executed in India.

 

However, if you ask me who is going to be the next star, I would tell you to keep an eye on the ‘B& C’ list – vertically

focused celebrity/socialite in the e-Commerce space – over the next three years.

 

Sid Shah, the author is President, The Wild East Group