Just kidding with licensing

With the apparel category scaling up the business and major players such as Spykar, Lilliput, Reebok, Toon Kidz and Spacetoon already established in the licensing business, licensed apparel kids industry is undoubtedly increasing very consistently each year. Licensing is being considered a new trend among apparel makers who are gradually realising its true potential to woo the not-too easy-to-convince little customers.

Mr Rajiv Sangari, MD and CEO, Spacetoon India opines, “Character licensing generates over $42 billion through annual global retail sales. It’s difficult to put down a definite number to the licensed apparel kids industry, but it’s a given fact that it’s increasing with many new players coming every single month.” Characters like Pucca, Ben10, Power Rangers, PowerPuff Girls, Johnny Bravo and Dexter, to name  a few, are a hit with the young audiences and it is this liking and affection for the characters that make kids desire to possess and flaunt them on various merchandise as well. Many top brands like Pantaloons and Benetton have cashed in on these famous characters to achieve greater heights adding to their retail success.

Business leverage through licensing

Licensing plays a crucial role when it comes to retail success and for a business to consider licensing as an impending option, it must be considered whether their property is merely a product or is a ‘real brand’ in the eyes of the target consumers. The brands not only have access to retail shelves but also share the consumers’ mind space by transforming the emotional connect to merchandise across retail shelves.

Disney, for instance recently joined hands with Global Trendz Retail to enter the organised apparel retail market in India. Global Trendz has been appointed as the exclusive licensee for two brands from the house of Disney - Disney Baby and Disney Jeans.

“Market analysts observe that licensing the brand enables licensors to provide consumers genuine alternatives to unauthorised products that are currently being sold in the market. It also generates incremental revenue for licensors through increased sales of core product and royalty revenue from the sale of licensed products,” comments Mr Venkat RV, MD, Toon Kidz.

Ms Nandini Sethuraman, Head of Marketing, Marks & Spencer Reliance India Pvt Ltd says, “We do have licensing tie-ups from time to time with characters that are popular with children. In the past we have had Hello Kitty, Thomas the Tank and Bob the Builder, etc. and these change frequently based on our global licensing arrangements.”

Licensing: An effective marketing tool

The critical factors in business however remain to be effective pricing strategy, brand building exercise and creating market presence through better retailing among others. Mr Venkat says, “Today, Indian brands are using the licensing practice after the huge success of the strategy in the international market. The inclination for making business through licensing has assisted many companies to post some big alternations of the otherwise ‘own brand’.” However Mr Sanjay Vakharia, Director - Spykar Lifestyles Pvt. Ltd opines, “We do not invest so heavily in the licensed business as we prefer promoting our own brands, licensed brands are more tactical and period bound.”

It is however noticed that it is very much feasible for a licensee or a retailer to take up licensing and bank upon licensed merchandise for materialising potential business prospects. Mr Sanghari says, “Licensed goods in most cases, and in most likelihood is always more effective than the normal goods. The industry average says that almost 22 per cent more goods get sold compared to the unlicensed ones.”

A bit of research

Marketing plays a huge role when it comes to promotion of merchandise and reaching out to audiences which at times sidelines the product itself. “One has to basically understand the character, its appeal in our country, and the target audience. Also see if what work has been done with the characters in other markets to understand the scope of the brand. Besides this, one has to most importantly, figure out the longevity of the character and the effort on promoting the same,” comments Mr Vakharia.

The market needs to be thoroughly studied, understand the target group, their buying behavior/pattern and locate the target areas and audiences accordingly.

Consumers’ response

The little ones in the context, are brand conscious and very much into flaunting merchandise with their favourite characters or property on it. “ToonKidz ushers in trendy fashions with an element of fun that appeal to youngsters and parents. Design elements are inspired from famous cartoon characters like Ben10, Bakugan, Power Puff Girls, Bob - The Builder, Sesame Street, Thomas & Friends, Dragonballz, Doraemon, Fafa & Junu, Marvel Xtreme range like Spiderman, Hulk, etc. are incorporated into a wide range of products for kids including apparels, toys, games, stationery kits, back to school merchandise and accessories associated with rapidly escalating upscale lifestyles of today’s children,” comments Mr Venkat.

What the future holds

With eight dedicated kids’ channels offering 24 hour visibility to children of their lovable characters, the kidswear apparel industry is set to gain eye balls. The segment is the fastest moving licensed category.

“The urban kidswear market is estimated to be about 60 per cent of the total kidswear market. The potential for India to benefit from the licensing industry is huge. The emergence of modern and more organised retail in India, estimated at $200 billion, has been projected to grow at 5 per cent annually and has set the pace for new collaborations between international licensing companies and Indian business houses,” opines Mr Venkat. The comment itself points out the mounting influence of licensing on kidswear market.