With schools re-opened after the summer break. Has herald yet another season of brisk sales for those retailing in the various items that children need to go back to school. In fact, such is the variety of merchandise now available in this section that sales can only be compared to the highs of a major festival like Diwali. According to a survey conducted by Deloitte, the back-to-school (BTS) shopping season accounts for about 50% of the annual school-related spend.
In a market that continues to be dominated by character and entertainment licensing, BTS along with apparel is one of the key licensed categories in India. This category includes school bags, lunch boxes, water bottles, pencil boxes, loose and gift set stationery, notebooks, etc. Here, awareness via viewership has reached a substantial level but a big revenue stream which remains untapped is licensing and merchandising.
Indicating the wide scope this category has in terms of current size and growth potential, Sanjeet Mehta, Executive Director and Head, Disney Consumer Products points out, “Disney is the largest licensor and a market leader in character-based products segment in the country and the back-to-school category contributes to a strong double-digit share of the overall consumer products business in India.”
POPULARITY DRIVES THE DEMAND
The traditional licensing industry in India is very strongly linked to brands popularised by TV, with franchises being the only exception where a brand like Marvel – though having a limited TV presence via animated shows – makes a dent via a movie release through both theatrical and satellite channels. “Character affinity is one of the key factors that drives the BTS segment,” adds Mehta.
The top performing properties in this category include Disney franchises such as Avengers, Spiderman, Cars, Frozen, etc. The other franchise that has traction is the Warner DC franchise of Batman and Superman. The TV characters include Pokemon, Chhota Bheem, Doremon and such others.
The girls’ space has properties like Hello Kitty, Barbie and Dora the Explorer which continue to be popular along with the Disney franchises like Frozen and Princess. There are a few brands like Minions, Peppa Pig and PJ Masks that have garnered excitement and a quality following too. While the potential of the category for licensed play is huge, the category has a few peculiar trends. “The category is marked by the absence of the big players as licensee, with the exception of Camlin in stationery, and is run by business entities that have been in the B2S business for a long while,” says Jiggy George, head of LIMA India.
“There exists a huge gap that the big brands in paper stationery, writing stationery, school bags and luggage can fill, but have strangely stayed away from,” adds Samir Jain, CEO and Executive Director of Green Gold Animation. In short, there is a huge growth opportunity here that could ratchet up B2S as a category in licensing in India, given the legacy of the brand and the distribution strength that branded players have.
GETTING PAST THE HURDLES
While licensing and merchandising is growing, piracy continues to be the biggest challenge with cheap knock-offs dominating the market in quick time to a character or property’s popularity.
Commenting on the same, Mehta says, “We work closely with law enforcement authorities and trade bodies to ensure that consumer rights to genuine branded products is protected everywhere.”
Jain of Green Gold Animation cites that some times, the lack of awareness amongst manufacturers is to be blamed for counterfeits as they are unaware of the procedure to get rights for any particular character.
And this a big loss for the industry since even if school bags are in demand only during the start of the season, the rest of the stationery items or lunch boxes and water bottles record sales through a year. Therefore, it is important to have partners who have a robust distribution network across all online and offline channels to be able to not only capitalize on the opportunities but also ensure that pirates do not get a free hand.
Even if character and entertainment licensing has taken off in a big way in India, the surprising fact is that it has not yet managed to get a grip in the school itemsâ€™ category.