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Demystifying character licensing in kidswear

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A visit to the kidswear section of any MBO will bring alive the importance of character licensing and how the characters from animated films like Frozen, Minnions, etc., and cartoons like Chhota Bheem and Mickey Mouse rule the category. Be it for underpants or even socks and not to mention tees, tops, dresses and bottoms; a picture of their favourite animated character is sure to pull the young shopper towards it. Team IMAGES BoF checks out the market dynamics.

Demystifying Character Licensing in Kidswear
Today, the consumers tend to buy character licensed products, due to the strong affinity and emotional connect they have forged with their favorite stories and characters

Looking at the buzz around, we may as well come to the conclusion that character merchandizing in India is spread far and wide but to hear it from , Executive Director, Consumer Products – ; “The country is still a nascent market for character merchandizing.”

He adds, “However, more and more brands are beginning to realize the power of character merchandise. We, at Disney treat our stories and characters as a 365 day offering. Today, the consumers tend to buy character licensed products, due to the strong affinity and emotional connect they have forged with their favorite stories and characters. Having said that, the release of a big franchise movie gives us an opportunity to give that additional product push around the movie release helping us promote our merchandise offering.”

He points out how in the last few years, they have had some record-breaking brand associations for their movies. For example, they had 70 brand associations for Marvel’s Captain America: Civil War. Inspired by the film’s storyline, created an exclusive collection featuring Iron Man and Captain America for fans to pick sides in the epic war between the Super Heroes and flaunt their loyalties. Another collaboration was with Hasbro, their global toys partner who came out with a wide range of action figures, play sets and role play items for fans to indulge in ‘Marvel’ous fun.

The Game Changer

What makes character merchandizing score above other merchandize? , Licensing Head, has an answer to this. She explains, “An association of a product with a known personality/ character elevates its value, and makes it easier for the product to seamlessly reach the top-of-mind of its target audience and easing the entry level journey. A relatively lesser-known brand or a new brand gets the acceptability of its customer when it is endorsed by an established IP or character. Character lends itself beautifully to all the aspects of marketing – product, packaging, promotion, PR, etc.”

Let’s take the case of Chhota Bheem where with its licensing, many licensees began with their entrepreneurship journey like Yellow Sparks in the back-to-school category. It may well be noted that many well-known brands of India like Asian Paints, Savlon, Bikaji, etc., are associated with Chhota Bheem.

She further adds how the fans of Chhota Bheem and Mighty Raju want to experience their favorite character beyond the medium of TV/ movie and/ sports.

She says, “Therefore when a brand offers character merchandise to these fans, it immediately catches their attention and translates into sales, thus highlighting the brand essence and reach. Promotion and tie ups ensure that the brand stays close to its target audience, thus ensuring longer sustenance of the brand and finally strengthening the brand in the market.”

Mehta adds, “Be it Mickey, Iron Man or Darth Vader, it’s amazing to see the fan following our characters enjoy in the country. Hence, apart from aiding to create brand salience in a crowded, competitive market, creating products inspired by our popular and favorite characters helps brands add to the storytelling experience. While kids find these products fun, adults get to wear their attitude.”

, Managing Director, , that is the largest manufacturer of license based kidswear and merchandizing in India brings forth an interesting point when he says that the demand for character based merchandise and apparel. Depends from place to place, as the taste and preference of consumers change according to the awareness of that character in the region.

He shares, “In a region, where a particular character is popular, a customer does not mind paying a marginally diff erent price for a product.”

Pricing it Right

Revealing the most favorable price points for licensed merchandize, Prasad shares that they sell from a candy costing Rs 1 to kids’ furnishing ranging to Rs 5,000.

Elaborating on this, she shares, “Some of the very popular product categories are apparel (Rs 100 – Rs 500), Back-to-School, Gifts/Stationery (Rs 5 – Rs 1,000) and toys.”

Agarwal is of the opinion that people in India, do not want to spend too much since parents think that children will outgrow the purchase after a certain period of time.

He shares, “Character licensing is a business based on fast fashion and loyalty towards a brand is very limited. Parents buy from one brand today and from another brand tomorrow. As far as Eteenz is concerned, the ideal price point in India begins from Rs 199 – Rs 299 and goes up to Rs 399.”

Maintaining Exclusivity

Whether or not to opt for multiple licensing remains a subjective question. At Green Gold, they have maintained the policy of giving the opportunity of licensing to one partner per category.

Prasad shares the reason, “This helps the brand to sync seamlessly and also give the licensee the opportunity to grow and expand the market.” But on the other hand, Agarwal has a different take on this.

She explains, “In today’s competitive scenario one requires multiple licenses to sustain in the business. A licensing firm has to showcase a complete portfolio of licenses i.e. Something for every category whether it is for business-to-business or business-to-consumer. It is proven internationally, also we have seen failures that when a manufacturer does not go for multiple licensing.”

On the demand of licensed products that occupied the top most position in 2017, at Disney, it was the fashion and the back to school category and according to Mehta, this category seen a exponential growth and will continue to grow significantly in the coming years, given the increasing awareness on licensing as well as the consumer demand. Another promising category according to him is that of toys.

Prasad adds the dynamics witnessed at Green Gold Animation, “2017 has been a successful year. We received interest from brands across multiple product categories, be it personal care like hand-wash/ soap/ toothbrush to food and beverages to stationery and toys. Further we won the Licensor of the year at the Star Retail Awards the sixth time in a row.”

Making Moolah Out of the Business

The marriage between the licensor and the franchisee needs to have an equal contribution from both. Mehta explains this sharing what they do at Disney India, “Disney India works closely with a lot of strong consumer facing brands. Due to the popularity and demand our franchises enjoy, we are able to partner with brands to widen their reach even further. Last year Skybags, the stylish youth bags brand by VIP, launched the Marvel collection given the high affinity for this franchise among the youth. The new range of backpacks featured the iconic Super Heroes including Iron Man, Captain America, Spider Man and Avengers.

ITC Classmate school notebooks that are largely aimed for kids, launched a special range of notebooks featuring Mickey & Friends, Princess, Spider-Man and Avengers that strongly resonated among that age group. The notebooks did exceptionally well with its well established distribution network. With Jack & Jones we share a long-standing association, across our three brands — Disney, Marvel and Star Wars. It helps them enhance appeal of their fashion wear among the youth in the country.”

Prasad adds, “For any IP brands, licensing brings in additional revenue stream. It provides more visibility as licensed products are creating multiple footprints, resulting reassurance among the target audience. Better connect with fans by giving them a chance to experience their favorite character not only on TV but in and around them through t-shirts, bed linen, soap, books, toys and on many more merchandise.”

Some examples of successful licensing tie-ups are Chhota Bheem Parle G biscuits, Chhota Bheem- Asian Paints, Chhota Bheem-Camlin and Chhota Bheem-Bikaji.

Piracy Control

One of the major challenges faced in this industry is that of piracy. No sooner is a super hero or princess film hit, the characters are printed by small payers left, right and centre on the mechandize that they deal in.

Mehta shares, “At Disney, protecting the integrity of the products that consumers buy is of utmost importance. We actively work with industry bodies and Government to take strict anti-piracy action against wholesalers/ retailers who manufacture and sell counterfeit products.”

At Green Gold too, the team works hard towards taking care of piracy related issues.

Prasad shares, “Piracy is a big challenge for us. Popularity of Chhota Bheem has been exploited in the pirated market. We try to create awareness among customers and buyers and take help of the law. Time to time, based on the information gathered, we conduct piracy raids with help of law and agencies.”

On how they manage to protect the intellectual property rights, Prasad reveals, “When our licensee ties-up with our brands Chhota Bheem or Mighty Raju, he/she has legal right to sell the product to customers through defined trade channels, whereas these small time manufacturers who illegally source or manufacture cannot sell in organized retail/ online, as buyers of these channels are well informed of IP rights and know the perils of selling pirated goods. In fact general trade has also learned the danger of buying from these vendors, as there is always a danger of piracy raids and loss of goods, money and customers.”

Agarwal concludes with pointing out how the issue of piracy is not only faced in India but is a global phenomena. He shares, “This is not something to be feared but it should be fought with and a solution has to be made. We have examples from the fi lm industry, movies are crossing 100 crores mark inspite of the piracy business being there. So the character licensing business have to come out of the psychological dilemma of choosing between copied and non-copied, one has to control and win over it.”