Immense Potential for Licensing in India

In a candid conversation with Gunjan Piplani, Charles Riotto, President, International Licensing Industry Merchandisers’ Association (LIMA), discusses the huge potential in the Indian market, how consumers’ mindset has changed over the years and how Indian license market will evolve rapidly.

Retailer: What is LIMA’s plan for India?

CR: I visited India a few years ago and since then the industry has witnessed a remarkable growth. This time I’ve come here for a deeper understanding of the Industry. We have our representatives in India and we want to provide some localised services beside the global services that we provide as an organisation. We want to help, educate and tie together the entire Indian licensing industry and feel that communication and sharing information is the key for growth. That’s our strategy to help develop licensing sector in India. 

Retailer: You’ve been participating in Franchise India annual show and conference every year since 2008. So what is your perception of the Indian market?

CR: The Indian market has immense potential for growth. The country has a huge population with the niche group interested only in brands and better quality merchandise. For the business people, who understand how licensing works, it is a big opportunity to represent local as well as international brands that use licensing as an effective channel, both within India and outside.

Retailer: Since there’s a need for awareness and demand creation, do you think Indian retailers and manufacturers have understood this and are proactive enough?

CR: Today, the Indian manufacturers have definitely realised the advantage of licensing. If we study what is going on—not only in India, but also the rest of the world there are many global brands that convey the image of quality and status. I’m seeing that the middle class in India is going more and more towards reputed brands. Therefore, I think, if the manufacturers pay attention towards understanding licensing, it could be a great opportunity. When you acquire license, you acquire the recognition that the brand already has and that gives you the advantage over building a brand from nothing.

Our strategy is to build up an awareness programme. We really need to reach out to the general business community and explain its advantages, how licensing works, showcase successful works from other parts of the world and why they’re successful (there) in contrast to the Indian market. It’s not an easy process since it seeks peoples’ attention; however we’re committed to do so.

As far as events are concerned nothing happens overnight. We had a huge show in the US and even that started somewhere around 1985 with 20 exhibitors. But here, in India, this evolution will be faster since it already has the track record of models across the world where licensing had successfully worked out. What I foresee is an immense growth of licensing in India over a period of 5-7 years.

Retailer: What are the procedures for bringing the awareness? How is LIMA going to contribute?

CR: Our main mission is to grow the industry from within–business-to-business basis. And consumers will organically become aware of the brands and have a desire to acquire them. Having said that, I think consumers don’t understand licensing— don’t understand that it’s taking a brand from one property owner and giving someone the rights to use it. They don’t think in those terms. So when they buy a Ralph Lauren sweater, they don’t think that it’s being manufactured by somebody else. Our main mission is that the consumers should buy genuine articles, and not be encouraged to buy the camouflaged or parallel goods. We don’t really tell people to buy licensed products since they won’t be able to distinguish between licensed and ordinary products.

Lots of major licensors have licensing programmes and counter counterfeit programmes in place and they both work together. It’s a huge issue and, I feel, LIMA cannot take on all. Our main mission is to provide the education and information, without getting into policing the business.

Retailer: What was the time period for the licensing business to reach full-fledged maturity in the US? What are your expectations in India?

CR: The example for licensing goes back several years—from 1930s to 1940s. What was recognized as the major licensing programme in 1970s happened when the first Star Wars movie came out—probably the first organised licensing programme that covered the different product categories and actually made an impact on the market. So it took almost 30-40 years for the US market to reach this stage. However, in India this will be faster because there’s a model to follow, unlike the US which had no model to follow and evolve from. Now there is LIMA that can talk about the best practices in licensing—what is successful for the growth brand through licensing and what to look forward to. So I won’t be surprised if the licensing business grows three fold within 5 years.

Retailer: Tell us how the licensing business has evolved? What are the latest trends that rule the market globally?

CR: In the US, some licensing brands have done a great job in creating the image of a lifestyle brand, like Harley Davidson, as opposed to just putting in a particular category. The image of a lifestyle brand is something that is related to being healthy and energetic. In the US, the concept of direct-to-retail is very active where a retailer will manufacture and distribute a particular brand or property. It helps them in the profit margin since they handle the manufacturing themselves. Celebrity licensing is in vogue. Besides celebrities from entertainment, the celebrity chefs too have their own licensing lines; some have their own restaurants, foodline, etc. Home improvement products also have a lot of licensing lines such as Martha Stewart.