Licensed merchandise business is buzzing
Fashion brands in India are increasingly using popular characters like Harry Potter, Marvel superheroes, and Squid Game for themed merchandise aimed at a wider adult audience. The licensing business is growing at 13% in India.
As a consumer of fashion brands, you may have noticed an increasing use of popular characters on clothing collections. From ‘Harry Potter’, ‘Batman’ and ‘Friends’ to ‘Mickey Mouse’ and ‘SpongeBob’, from OTT series ‘Squid Game’ to popular Japanese anime ‘Demon Slayer’. The licensing extends to personal care products, food and beverages and electronics. Marvel Studio film ‘Deadpool & Wolverine’ releasing on July 26 has collaborated with 25 brands including Coca Cola, Nestle Polo, Titan Eye+ and Too Yumm! to launch themed merchandise in India. The superhero t-shirts, jackets, denims etc are being launched by The Souled Store, Myntra, Max Fashion and Pantaloons.
Japan’s ‘Hello Kitty’ caps, crop tops, skirts and t-shirts were launched last week by omni-channel fashion retailer Bonkers Corner, facilitated by brand licensing agency Dream Theatre that also manages merchandise deals for Pokemon and FIFA World Cup for the India market.
Licensed merchandise in India is not new. However, it has transitioned from being a children’s affair with cartoon characters slapped on their clothes, school bags, stationery and toys, to targeting a wider adult audience – from 13 to 30 years -- through more and more entertainment franchises and newer product categories.
India’s young demographic is driving the licensing business for entertainment and sports brands, says Vikram Sharma who leads Warner Bros. Discovery’s Global Consumer Products team in APAC. “75% of our business in the Asia Pacific comes from young adults and 25% from kids. For young consumers, we’re on trend in fashion and exploring opportunities in emerging categories,” says Sharma. The company has ‘Harry Potter’ jewelry with Carat Lane, and introduced ‘Game of Thrones’ inspired whiskey in partnership with Indian single malt Indri.
Priya Nijhara, director, Disney Consumer Products, India, says their character licensing spans 145 categories here and she’s particularly pleased with the ongoing deal with TVS bikes and scooters for special edition ‘Captain America’, ‘Iron Man’ and ‘Black Panther’ two-wheelers.
Bhavik Vora, founder and CEO of Black White Orange that represents Netflix in India is preparing to launch ‘Squid Game’ and ‘Stranger Things’ merchandise to align with their upcoming seasons. Youth segment became big for licensing after the prolonged closure of schools during covid and stricter safety norms for toys in India that diminished these major merchandise segments for kids, Vora says.
This coincided with deeper penetration of the Internet, rise of social media and streaming and the emergence of e-commerce with pop culture brands like The Souled Store, Bewakoof and Myntra online. “There’s propensity to spend on things GenZ thinks is an extension of their identity. When they wear a ‘Deadpool’ t-shirt, it’s actually them flaunting who they are. That’s emerged as a really good trend for licensing for us,” says Nijhara.
Besides characters, licensed merchandise and services include corporate brand licensing (Coca Cola, Nike, Ford), sports licensing (IPL, FIFA) and collegiate (Harvard, Yale) licensing, among others. Globally, character licensing contributes to around 40% of total business followed by corporate licensing at 25-26%.
“With the Warner Brothers and Discovery merger, we now operate in two of the biggest licensing segments. The Discovery portfolio allows us corporate licensing opportunities in customer segments like adventure and outdoors,” Sharma says. Globally, licensing was a $341 billion business in 2022 up by 8.2% over 2021. India market is barely 0.6% of the overall merchandise and licensing sales but growing at 13%.
Indian consumers have high exposure to international content, are well travelled and know their brands. But the dearth of organized retail is a real bummer, says Jiggy George, founder of Dream Theatre. “There’s a direct correlation between the growth of organized retail and the growth of licensing as a business. India’s scattered mom-and-pop stores limit licensing,” says George since store sizes and the ambience are unsuitable for licensed products. Piracy is a menace too.
Sharma and Nijhara feel India’s nascent market still needs to be educated on brand licensing. New-age brands understand the benefits of licensed merchandise better than legacy brands.
Yet the growth potential is attracting more players like Sandeep Dahiya, founder and CEO of Brandquila, an integrated marketing agency, who is launching Beyond, a brand licensing and franchising subsidiary. Scale may be a challenge but the eyes are on scope. Dahiya should know since he drove TV channel MTV’s brand licensing in India several years ago in categories like lingerie, condoms, deodorants and mobile phones.