Expanding Horizons: Merchandising, a Way to Revive Esports Retail Market in India
Expanding Horizons: Merchandising, a Way to Revive Esports Retail Market in India

During and after the COVID era, it was considered a golden period for the Indian gaming industry. However, one must not overlook how the growth of the Indian esports industry struggled to grow, causing financial challenges for esports team owners in the country. The reason behind this slow growth was due to the limited options available for expanding revenue streams. Nevertheless, merchandising consistently remained a viable option for these esports teams, serving as a tool to periodically boost their income.

It should be noted that the Indian esports industry is expected to grow from $40 million in 2022 to $140 million by 2027, according to the State of India Gaming Report 2022 from AWS and Lumikai. The report found the number of esports players in India grew four-fold - from 150,000 in 2021 to 600,000 in 2022 - and is expected to grow 2.5 times over the next five years, reaching 1.5 million by 2027. Furthermore, esports revenue, currently at $0.04 billion, is a small segment but is likely to grow rapidly at a 32% CAGR through 2027.

Merchandising as a Revenue Stream

Varun Bhavnani, Chief Gaming Officer & Co-founder of Entity, stated, “Globally, Entity is among the top teams in the Dota 2 circuit, and every LAN event is a sales opportunity. We roughly sell about 80-90 percent of our drops at Dota 2 LAN events. The European division is doing great in that regard; we are partnered with a leading esports wear company, We Are Nations, that’s been a vendor for Valve events.”

Talking about the Indian merchandising market, Bhavnani said, “If tapped into the merchandising market in India correctly, we can produce substantial profits. Merchandise acts as a placeholder for branding, and that’s more revenue from the brand deals we get. This allows us entry into newer consumer bases. It boosts brand loyalty, especially when you’re in the competitive business of esports. That’s how I look at it, one tool to build and bolster the brand marketing facet.”

Devam “Dev” Vyas, Vice President at Gods Reign, said, “The merchandising and licensing segment is poised to become a significant contributor to our revenue growth as Gods Reign strategically prepares to launch its exclusive merchandise line. We have diligently worked on creating a seamless structure to ensure the delivery of diverse and attractive merchandise that will provide our fans with the best possible experience. Anticipating the imminent launch in the month of March, Gods Reign is committed to setting new standards in the esports industry with a compelling merchandise offering.”

Community Connect

With merchandising being at a very nascent stage for the esports team in India, Orangutan is hoping to generate 10-15 percent via merchandising to their overall revenue, Jai Shah, Co-founder, Orangutan said, “Last year we announced our partnership with Puma. Since then, we focused on a slow and steady way of introducing different forms of merchandise for our community. We want to ensure that at every step, we engage the community with new merchandise that we introduce and provide them with a seamless experience. We want to provide the best for our community and make them feel that they are valued and very important to the organization.”

He adds, “As for expansion, currently, we have launched our Home and Away Jerseys along with a travel polo. We aim to launch active-wear jackets and hoodies and get into many more SKUs. Furthering our plan for expansion in merchandising, we also hope to get into streetwear and apparel as time comes.”

Stressing on the importance of merchandising as an important revenue stream Shah said, “Merchandising helps everyone monetize their community, be it an individual creator/influencer or an organization. Merchandising is the first or the most basic step in which anyone can continue to stay connected with their community.”

Looking for Partnerships

Bhavnani of Entity said, “We have been popping off with our fanbase steadily in the domestic and international circuits. Nevertheless, we are actively looking for new vendors for licensed partnerships. In fact, we have found a few local manufacturers with good supply chains which I’m hoping to close by the end of the first quarter.”

He further said, “We see a lot of potential with the awareness of competitive gaming raising so many eyeballs in the region, which is helpful in our pursuit of finding meaningful connections. For now, we get our merch made from Planet Superheroes, which is a wholly-owned subsidiary of Nodwin Gaming.”

Vyas of God’s Reign said, “Looking ahead, our expansion plans include a nuanced and calculated approach towards broadening and deployment of an expansive and diverse merchandise portfolio, encompassing jerseys, oversized T-shirts, polo shirts, hoodies, jackets, sneakers, and other premium items. This initiative aligns with our commitment to delivering unparalleled quality and aesthetic appeal for the community.”

Vyas further stated, “Beyond the current portfolio, we envision introducing exclusive collaborations, limited-edition releases, and strategic partnerships to further diversify our range. As we uphold the tradition of having the most beautiful and premium jerseys in the country under the banner of Gods Reign, our future plans are geared towards not only sustaining but surpassing these standards across our entire merchandise spectrum.”

Facing Challenges

The Indian esports industry has been exposed to multiple challenges, mostly revolving around maintaining esports rosters. Inflated player salaries, limited brand sponsorship deals, a toxic fan base, and controversies related to cheating scandals have affected the Indian esports industry drastically.

Bhavnani, while elaborating on the challenges faced while expanding the merchandising business in India, said, “It is a bit of a challenge to make merchandising bring you revenue. We’ve tried partnering with a few vendors in the past like The Souled Store, but it didn’t work out for us. What I’ve learned from my conversations with such brands is that there are supply chain and warehousing issues, and as a brand, I will have to bear a huge capital to get my merch rolling.”

He further said, “While stall spaces at tournament venues are also one way to do the sales. Unfortunately, tournament organizers in India have not paid attention to this angle of brand activation yet. Stalls are only for gaming festivals and conventions for now, but I’m hoping we’ll get there someday. Hence we kept our drops limited and sometimes on demand. We are exploring the side of innovative designs in hoodies, jackets, and caps with our limited drops.”

Vyas said, “In addressing the ongoing challenges faced by esports organizations in India with regard to revenue growth, we at Gods Reign acknowledge the pivotal role that merchandising and licensing extensions play in advancing our brand within the domestic market. By leveraging these avenues, Gods Reign aims to tap into the passionate eSports community, creating deeper connections through exclusive and premium offerings, setting us apart as a trendsetter in the Indian gaming scene.”

Though merchandising is a wait and watch game for the Indian esports industry, the brand extension route can definitely pull the sinking revenues of esports team to newer heights.  

 
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