Brand licensing gains momentum in India

The demand of brand conscious consumers has accelerated the growth signal for brand licensing in India.
Brand licensing gains momentum in India

India abounds in heterogeneity both in culture and in business. This has signalled the market growth of various licensing segments including celebrity, sports, character, kids and entertainment. It is thus interesting to see how the brand licensing market in India is shaping itself.

More than 60 per cent of the population in India is under the age of 35 where about 50 per cent is below the age of 25. The demand of brand conscious consumers, especially the young, has inarguably accelerated the growth signal for the business of brand licensing in India, which is expected to reach great heights, provided, proportionate steps are taken into account.

“The size of the consumer product licensed merchandise market in India was estimated at $135 million and the sales are expected to rise over $500 million in another five years,” said Chris Evans, MD, Oxford Ltd, which is in service to provide management and development of the Oxford University’s brand licensing and retail programmes.

Emerging trends

The market-demand for rare product category like stationery especially credit cards and mobile phone covers are expected to rise due to people’s inclination towards purchasing such items. The good news is that the market here is experimental, and so are the consumers. But the work culture in India is equally appalling where the tendency to defy law takes centrestage inviting lawlessness that can adversely impact the overall business, also licensing.

Emotion quotient

As per Martin Brochstein, Senior VP, Industry Relations & Information, LIMA, the business of licensing and branding is all about emotion, where a licensor leases rights of brand extensions to a licensee manufacturer evoking an expectation of performance and a sort of emotion.

In India, majority of the licensees fail to meet the terms and conditions of the work procedure laid in the agreements even before the start of the deal. This calls for an outside expert, such as a licensing agent, who is skilled to commercialise the potential of a character, brand or design concept and with the help of his network implements those concepts into deals.

Relevance

Secondly, the relevance of a product category to license is a chief component too hard to be ignored in the business of brand licensing. As Evans rightly said, “We at Oxford are particular about the product category that we wish to venture through licensing. For instance, it would be an absurd idea for us to license a FMCG product like corn flakes, for the consumer would in no terms relate it with Oxford, as the university is a premier institution of education since ages.”

Style guide book

He further explained that besides this, India as a developing market needs diminutive but key essentials to be put into practice in the business of licensing to reap fruitful rewards. He emphasises on the need of a ‘Style Guide Book’ which besides incorporating the brand’s logos, trademarks and other IP related stuff should primarily lay down the background, objectives and strategies of the licensor brand. This, in turn, eases the licensee to help understand the licensor closely and aids him to form an idea of the product categories the licensor is looking to venture through brand extensions.

Future prospects

The enlargement of the licensing industry in India is solely dependent upon the growth of organised retail as licensors are attracted by the big players in retail and the retailers with a national and regional presence are at an advantageous position. Retail giants like Shoppers Stop, Pantaloons, Westside, Spencer’s and Lifestyles are established players in selling branded and licensed merchandise.

Therefore, the small retailers need to buck up to join the bandwagon of licensing business in India. The potency of digital capacity is rolling high as India has about 750 million mobile users, which in turn, accelerates the demand for shopping of branded and brand licensed products.

Character licensing is anticipated to have a gigantic growth in the country as famous characters like Disney, Nickelodeon, Doraemon etc have become top favourite in kids’ TV series and movies. Hence, toys and other related kids’ accessories including educational products fall under the popular licensed products categories.

The way forward

As India moves towards improvisation of its IP law infrastructure in compliance with the World Trade Organisation, the standard of licensing business is bound to rise and the growth is inexorable. Indian courts now give due acknowledgement to the needs of financial penalties to dissuade law breakers from infringing on IP rights’ holders.

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