Alkam finds brand licensing a safer & proven way to scale up

An alumnus of The University of Nottingham, Alok Kamat found brand licensing to be the best bet for vertical expansion of his family business, and thus incorporated Alkam License Products – a 100 per cent licensing driven company. Associated with powerful brands like Barbie, Hot Wheels, Fisher Price for personal care segment, Kamat finds licensing as a safe and proven way to scale up.

Talk to us about your stint with licensing.

I was first exposed to the world of licensing when I was a contract manufacturer for a licensee. There came an opportunity where Mattel Toys was looking to expand their range in kids’ personal care segment. They were looking for someone with a strong manufacturing background. Without too much of doubt we got the contract in 2009 and so far we are together and looking to renew soon. The journey has been exciting because through licensing, in a way you become the owner of a particular brand for your segment.

What made you go the licensing way?

As a manufacturer we were always doing B2B and as a second generation in business there was always a wish to do forward integration, either horizontal or vertical. In vertical integration, either you can have your own brand or go the licensing way. Licensing option seems to be a little more safe and proven and in terms of licensing one thing was that at least the brand enjoys awareness, we just need to ensure that the category is sold to the retailer. That’s why we ventured into licensing zone rather than adapting any other model.

Back in 2009, what were the challenges and how did you manage to cope up with them?

The very fact that licensing works on a model where certain amount of fixed guarantee is to be given, is the biggest challenge. Operating as a B2B, we were never in the position where we had to commit something even before earning something. Other challenge in terms of marketing particularly for character brands was that character is well known for certain retailers, big market players but when the same character goes on to a shampoo bottle, face wash or a sanitizer, unfortunately those products are mainly sold in chemist shops. So either the retailers were not willing to keep those products because they didn’t understand why a toy brand would be sold from serious retail point like a pharmacy. Other way round was that big retailers for kids’ apparel or toys knew the brands but they didn’t know the product. The challenge was integrating both sides, which we did by spending huge on BTL marketing, window display and brought retail space or floor space. Further, given our background, the retailers trusted us and kept the products to test waters. This lead to complete hammering and since the brand was good, the first time consumer came back again and again. It took us good 4-5 years to set our foot, but now we are the market leaders in this category.

Earlier you had Disney IPs in your portfolio. What made you drop them?

There was too much of cross licensing which is not a healthy position for any licensee because if there are many players carrying the same brand name and serviced by different company, then the consumers and retailer both are lost and the market shares are hampered. Infact we are not on any exclusivity deal with Mattel Toys, but there is a trust and exclusivity under-written that until there is a big mess-up done by us if the numbers start falling, they won’t look out for other licensees.