The licensing industry has recognised the role of ‘pester power’ in the purchase decision along with the rapid evolution of the needs of children, often as young as three-years-old. It’s no surprise that along with traditional merchandising categories like apparel, shoes, toys and books, licensors are increasingly expanding their offerings to include back-to-school products and interior solutions for homes inspired by popular icons.
As part of this initiative, Supertech had earlier entered into a partnership with Disney, and is offering children’s rooms at its proposed residential project, Fable Castle, Greater Noida, which prominently features legendary characters from this global licensing giant.
“Children are also playing an important role in the purchase decision of a home, and we are offering them a special ‘experience’,” said R K Arora, chairman and managing director, Supertech.
And, while the broader economy may still be struggling, but senior managers at several retail chains pointed out to “strong demand” for back-to-school products including school bags and stationery, and with an emphasis on value for money offerings.
Striking a similar view, Madhav Prabhala, Vice President (Sourcing & Licensing), Green Gold Licensing & Merchandising, highlighted that back-to-school products along with toys and accessories are their best sellers. This licensing house had created the popular character Chhota Bheem and an array of related merchandised products.
Pampered kids
The overall kids’-related products category is valued at nearly Rs 60,000 crore each year, with the licensed segment accounting for about Rs 1,000 crore, and one of the fastest growing in this market. And, licensors typically earn Rs 90 crore in royalties each year, given their agreements with third-parties.
And, the long-term growth opportunities in kids’ licensing industry resulted in several players entering this segment as well as expanding their offerings. For instance, leading content providers including Disney, Cartoon Network and Nickelodeon, are expanding their repertoire of offerings via programmes like Roll No 21, The Smurfs, Hanuman and Adventure Time.
Senior managers at these entertainment networks pointed out that advertisement revenues contribute a smaller proportion of total revenues vis-à-vis channels in other segments due to government regulations. And, licensing and merchandise-related activities which currently account for about 10 per cent of children’s channels income are expected to reach 20-25 per cent over the next few years.
Similarly, mid-sized players, like Vinod Padmanabha D, Founder, Only Kidz Impex, marketer and distributor of consumer branded lifestyle merchandise for kids, stressed on the role of licensed products which has helped his operations expand “manifold” in a short span of time.
Sharing the above, B D Nathani, CEO, G&D shoes, a leader in the children’s segment, recently became the licensee for a global and local icon, and it has enabled him to considerably expand his offerings.
Upcoming categories
Globally, licensing has expanded to include kids’ recreation zones along with theme parks and play schools, but they have not yet made an entry in our markets.
Saugato Bhowmik, Senior Vice President, Consumer Products, Viacom18 Media, stressed that these categories offer long-term growth potential in tune with the global trends, but entrepreneurs would need to find a viable business model.
Clearly, no licensor can ignore the growth opportunities in this segment.
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