Licensing in its various forms has been growing in India with Sports Licensing setting a benchmark as it has a readymade global fan base supporting either a sports star or a sports team.
According to a report by the International Global Sports Licensing agency, English Soccer Club Manchester United has about 56 million fans in the Middle East, which is clearly indicative of the fact that these deals open doors for a business to capture a large target market closely aligned with built-in loyalty with the sports brand (s). Striking a similar note, BD Nathani, CEO, G&D Trade Zone shares, “Typically, organisations use sports licensing as a deliberate tool to build relationships with supporters.”
The brand licensing market in India is $450 million in retail, where sports licensing, is poised to grow phenomenally over the years. The emergence of sports leagues such as the IPL and the World Series Hockey (WSH) lately has reshaped the industry scenario in the country with the sports category being top favourite to vie for by the licensees. ‘Formula One’ has a huge fan following in India. Other popular teams cashing in on the growing demand for sports brands include, WWF, MotoGP and football clubs like Arsenal and Manchester United.
It is the team that a fan is more inclined towards rather than a sports star. Therefore, in this segment of business, unlike in celebrity licensing, where an individual is the focus whether for controversies or for any negative act, licensing product via a sport team has its own advantages.
Michael Okebiyi, Co-founder & Managing Partner, Tyrek LLC points out, “Here, a sports star can be taken out of the team for committing any immoral act, but the reputation of the team remains unaffected because what matters is the team, not the individual player.”
Thinking outside the box is paramount. To commercialise the overseas fan base, it is essential to build stable and durable marketing platforms. Michael further added, “Each overseas market requires detailed understanding, multi-sector experience, excellent local network and perseverance.”
A close watch
Distribution strategies are critical to the success of a licensing programme, where the focus on building distribution of licensed products in major retail chains alongside eCommerce operations should be a key decision.
Licensed products are susceptible to the activities of counterfeiters who use brand names or logos without the legal authority to do so. The poor quality of counterfeit merchandise can have disastrous effects on the reputation of the sport and associated products.
Licensed product sales are expected to increase to over $500 million in India over the next five years, due to increased product loyalty and creation of demand among the consumers. International sports brands like Nike, Reebok, Adidas, and Puma catering to the Indian market are making their presence felt in a big way routing their way through licensing.