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The small manufacturers can be benefitted from brand licensing as they will gain tremendous exposure in their categories
India has emerged as one of the prime retail markets all over the world not just for brands, but for entertainment properties also. These properties are foraying into Indian landscape, and creating a scenario where there is an increasing push towards organized business than before.
But somehow this push has affected the small manufacturers, who have been following the unorganized business mode right from the small T-shirt manufacturers in Ludhiana to the toy manufacturers in Agra.
The need here is to first get into the mainstream retail, and then remodel the retail channels. In such a scenario, brand licensing is the way out for these small manufacturers. It not only helps them shifting towards the organized side of retail, but also addressing the challenge of visibility.
If a manufacturer chooses to get rights of a brand via licensing, it gains tremendous exposure in its category in every retail store the product is sold. When sold into major chain retailers, the brand can gain thousands of additional feet of brand exposure in each category.
Samir Jain, COO, Green Gold Animation, said: “A lot of small toy manufacturers are entering the brand licensing market, this is good for us and for the industry. This way the unorganized market is getting into organized mode by taking licenses and upgrading themselves from being unorganised toy business.”
“We in fact have many licensees, who are first timer and have moved out of the unorganized sector. This is helping the industry in growing and also benefitting the licensing fraternity,” Jain added, who has on boarded a plethora of licensees for Green Gold’s iconic property Chhota Bheem.
Vikram Goel, the owner of Infotech Resources, said: “Often manufacturers’ find it difficult to enter large retail chains like Shoppers Stop, Crossword, Hamleys, etc. But when they approach with licensed products, it attracts the larger chains, and often helps them make a break through.”
By licensing the brand to a manufacturer, which currently sells into a retail channel where the brand does not have a presence, the brand can gain access to that channel via the licensing relationship. Also, akin to new channel access, a manufacturer can gain entrée into new regions via brand licensing and improve his scalability.
Anand Singh, director – South Asia, Cartoon Network Enterprise, said: “The more independent the licensing business becomes, the more it will deduce the dependence on import, and it is better for economy, license and for the local market.”
Too much dependence on Chinese imports, fluctuating currency sometimes can make the licensees run for cover because they may be planning a range when the dollar was at 64, and then suddenly it goes to 50 leaving everything go haywire.
The credits goes to the small manufacturers getting into the brand licensing business, a lot of things have changed in the past two to three years. For instance, three years ago, bicycles were imported 100 per cent. There was no licensed bicycle made locally, but today the entire licensed bicycle industry has shifted to Ludhiana, including Hero and Avon, and the market has become much localised.
That helps not only helps the licensees, but also benefits the retailers to control their timelines, price points and deduced stock-outs.