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licensing business 2015-09-12

More than building a brand, we are here to create category: Alkam licence’s MD

Subsidiary of Aero Pharma Group of Companies, Alkam Licence Products Pvt. Ltd offering range of personal care products Barbie, Hot Wheels, Disney, Chhota Bheem and Fisher Price.

Growing rage of licensing in kid’s personal care space has opened new avenue of opportunities for the manufacturers of wellness products offering kid’s range. With an objective to explain the benefits of licensing in gaining traction for the kids’ category of products, WI Bureau spoke to Alok Kamat, Managing Director, Alkam Licence Products Pvt Ltd, subsidiary of Aero Pharma Group of Companies.

Aero Pharma is known as India’s leading Contract Manufacturer of Cosmetics, Toiletries & Personal Care products since 1985. Under a strong leadership of Ravi Kamat, Founder, Aero Pharma caters to multinational like Unilever, Oriflame, Amway and domestic giants like Godrej, Marico and so on.

About Alkam Licence
Alkam was incorporated in 2009 and the ideology was to be into brand licensing only. Later, we got to know that we are no more the brand licensing, but character licensing. We do have licensee for manufacturing and distributing certain brands, which includes Barbie, Hot Wheels, Disney, Chhota Bheem and Fisher Price. We have been manufacturing and selling these products for big multinationals like Metal Toys that has Barbie and Hot Wheels since last 6 years. We are a licensing company, selling quality and have all authorised license from the main brand owners, which give license to us on contractual basis that is a time bound contract. We are not brand owners, but category owners. We only have rights to use these characters on the kid’s personal care products, which we manufacture.

Seal the Deal
There are a couple of brands, who want to get associated with us, but we are taking it slow. So this financial year, we have decided not to take new brands. We are now trying to go to the brands, which foresee brand extension into personal care. Thus, we want to be a company, which is concentrating only on personal care, which is manufacturing and distribution of these products.

Terms of the licensing deal

Duration of the license: The deal needs renewal in minimum 2 to 3 years’ duration.

Price points: The price range of our product starts from Rs 4 and goes up till Rs 599 to Rs 999.

Quality check by licensor: They regularly visit factory. Given the background and a legacy of 30 years of our parent company Aeropharma, brand owners are at little ease with the quality assurance of Alkam. At the same time, we have our internal checks made, where we get all the data of quality analysis reports jotted together. Our every fragrance product is IFRA approved.

Product marketing: In personal care segment, there are many brands for 0 to 3 years group, but not many brands for above age group 3. Given that, we target the consumer group. We are very clear that we will not spend on marketing out of our dedicated budget. Instead, we will make sure that we increase our category awareness. We deal with good child footfall outlets like departmental stores, toy stores, apparel stores, LFOs and the adult cosmetic outlets. We’ve placed our product at a place which is “visible enough to sell more”. As we do not do above the line (ATL) advertising, there is less awareness about our products among consumers. So we’ve kept our products at cosmetics outlets, where it catches adequate attention of parents who are accompanied by their pasturing children.

Regional traction
Big metros like Mumbai, Delhi and seven states of Northeast are the well demanding markets for us. Our major focus is personally into East, West and Northern region, which generate volumes. South is currently not generating good volume of demand.

Combating challenges
Not only I have to go and pitch to the retailers about our elaborate product range, but I also have to convince them that there would be consumers coming to their outlets seeking Barbie products. Finding a retail outlet with good brand awareness is a challenge we are facing since 2009. However, we make sure that our prices are completely affordable. Finding A+ chemist outlets which give us good display of products is the biggest challenge so far.

Year-on-year growth
While there is 100 per cent growth in demand and 30 per cent growth in retail counters, we are growing by about 60 per cent with an annual turnover of Rs 12 crore.

High demand product categories
Hygiene, beauty and wellness products have high demand in the market. Moreover, on a regular basis, we revive our product range.

Stock Keeping Units (SKUs)
We have about 100 SKUs and we are concentrating on existing age groups. Further, we are planning to categories them into different categories like hygiene, beauty, wellness etc. We are not here to make a brand; we are here to make a category with very good brand support.

Retail presence
We are supplying to about 7,000-7,500 retail outlets across the country. Out of these, 80 per cent outlets are mom-and-pop stores and remaining are standalone supermarkets and LFOs like Big Bazaar, Bharti Retail, Easyday and Hypercity. We also have online presence with Flipkart, BabyOye, Firstcry, Nykaa, and we also work with Home Shop18 and Shop CJ. Currently, we are in talks with few online retailers to explore shop-n-shop opportunity.

Online and offline sale
Our online sales constitute about 10 to 15 per cent.

Plans to touch small cities or EBO format
Neither we have planned to launch our own stores, nor are we targeting tier II and III cities. We are a FMCG company with selected and targeted outlets.

Target consumer groups
We are targeting certain age groups, which is not brand crazy but character crazy. With brands like Barbie, Hot Wheels, Chhota Bheem and Disney, we cater to the age group of 3 to 12. Chhota Bheem and Disney cater to 3 to 6 years old, and Fisher Price caters to 0 to 3 years old. Since 2009 we have been the only and exclusive company in India offering entire range of personal care products for 0 to 12 years old.

Roadmap ahead
Every year we are planning to increase our retail presence by 25-30 per cent. Further, we have decided to come up with the range of alcohol free sanitizers for kind, keeping in mind their delicate skin. Recently, in Disney, we came up with the range of ‘ultra-mild’ products as a concept, where everything is mild and good for kid. We are also looking at certain products which have something to do with fashion – it could be coloring hair product range for teens. We will be launching it under certain brands.

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