Way to go ahead

Footwear licensing falls under the broader umbrella of fashion licensing. A designer or brand owner uses licensing as a way of extending the brand into tangential areas including accessories like footwear. Licensing is another way for reputed international brands to enter the Indian market. For example, Winner Sports Pvt. Ltd, a wholly-owned subsidiary of Pantaloon Retail India Ltd, partnered with Sketchers USA to license and distribute the brand.

 

There are players like Provogue, Skechers, M&B, Louis Philippe and Numero Uno which have been into footwear licensing since long. However, there are also new players joining the bandwagon like DQE which has recently signed a merchandising agreement with Off Road, a top European footwear manufacturer, to produce a collection based on the former’s animation series - The Jungle Book.

 

Choosing the right candidate

 

A good brand has no boundaries when it comes to merchandising, which can be exploited in a number of ways. Product categories could range from indoor slippers, beach slippers, sneakers, children’s shoes, rain boots to snow boots among others.

 

Mr Manoj Mishra, Sr. VP, Global Licensing and Distribution, DQ Entertainment International (DQE) says, “We do believe that choosing the ‘right licensee’ for a particular product is of the utmost importance and the L&D team at DQE undertakes a thorough study of the market, potential partners as well as a brief study on the licensee to ensure that our brand is parked in the right channel and right partner who will do justice to the property.”

Ms Riya Guha, Brand Head, Skechers India says, “Compliance is one major criterion which helps maintain international brands’ standards.”

 

“We actively supervise our distribution to ensure smooth and effective distribution. Thus, to facilitate smooth processes, as an advantage, licensing ensures a better style development and inventory management distribution”, comments Mr Akhil Chaturvedi, Director, Provogue (India) Ltd.

 

Keeping brand value intact


It goes without saying that in a well-executed, tightly run licensing programme, the brand owner maintains strict control over design and quality, and the licensee carries out manufacturing based on the agreed upon specifications so the brand image is seamlessly maintained.

 

“Strict approval procedures, as prescribed by international brands, are followed religiously to maintain brand equity,” comments Mr Guha. “We are very particular when it comes to selecting partners and we have great trust in them. However, we have got our set of approval milestones to be met in every single phase of the product development and never compromise on quality that would hamper the brand as a whole,” opines Mr Mishra.

 

Undoubtedly, design and detail remain to be the souls of any prospective brand. Mr Chaturvedi avers, “We take every care to ensure the smaller details of the product. Our designs are created with a view to the likes and comfort of the Provogue customers whilst keeping the fashion quotient intact.”

 

Target audience and promotional strategy


As per Ms Guha, licensed products have increased the target consumer for international brands especially the middle class whose disposable income is increasing day by day. Whereas for DQE, the target audience is usually show/animation series oriented. Each show has a specific target audience. For example, Jungle Book is oriented towards a target audience of age group 6-9. “Carving out a new segment of customers will be a challenging assignment as we will then have to consider the likes and dislikes of that target group. It is a very difficult task and involves a lot of risk, but at the same time it has its own pros and cons. We would definitely like to take this challenge in the near future and explore the best possibilities to reach maximum customers,” opines Mr Mishra.

 

When it comes to promotional strategies at Skechers India, a grand launch cum fashion show is employed to kick off the launch. Apart from that, advertisements in magazines and newspapers, grass root level events, posters and hoardings form the other promotional strategies to popularise the brand.

 

At DQE, the strategy is quite simple - greater the audience, larger the followers it creates. Mr Mishra avers, “We are very well placed when it comes to the broadcasting part of the show. Jungle Book has been sold to more than 110 countries and still counting. Equal emphasis is given to both the pay and free TV broadcasters so that the show reaches maximum audiences.”

 

At Provogue, the brand itself and its licensee, M&B Footwear, is dedicated to meeting the footwear needs of all age groups creating a one stop shop for the customers.

 

Addition to overall revenue


Every merchandise product plays a significant role to play when it comes to the revenue generation. Mr Mishra opines, “There are several ways of licensing/ merchandising your product. Think of one such category and 10 other ideas will pop up. Footwear is a major category and is expected to generate good revenues for the organisation.” Ms Guha comments, “Licensed products have shorter lead times and give MRP benefit to consumers, hence increasing revenue shares.” Mr Chaturvedi adds, “We have licensed our footwear and there is tremendous growth in the revenue every season, not just in our stores but also through other footwear stores. Provogue footwear is retailed through Metro Shoes, M & B, and Lifestyle, etc. There is growth of almost 25 per cent YTY (Year to Year) in this licensed category which has more scope for further expansion.”

 

Referring to the investment involved for a licensing agreement, Mr Chaturvedi comments, “The investment in the licensing brand is made by the licensee who in turn pays a royalty to the principal. Significant investments are in product development, R & D, technology on a continuous basis to upgrade the product and usage experience.”

 

What the future holds


Licensing is not exactly an on-off relationship. It is a business arrangement for long term perspective and requires a symbiotic relationship.

 

Another important consideration to be kept in mind is that imported products are susceptible to high duties/tax rates and currency fluctuation in India. Hence, licensed products are the only means of survival in the Indian market. High import duties, thus, make way for the wider acceptance and bright future for licensed brands.

 

Mr Mishra avers, “Licensing in footwear category is really catching up and I am sure we will be able to monetise it through strategic alliances and timely launch of the proper footwear while still maintaining a high quality for the products.”

Mr Chaturvedi concludes by saying that licensing has lots of scope for future development and growth. “Provogue is also looking at licensing other categories in the future,” he further adds.

 

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