Licensing Trends in India
08 October 2012
With the advent of consumerism and an economic boom across the world, India has not been left untouched by the fast-catching trend of licensing and franchising. This part of our series on licensing in India will therefore focus on the licensing and franchising industry trends in India per se since this area is emerging as the next big thing in the country.
International franchises arrived in India as early as the 1960s, but the government in the late 1970s expelled foreign brands from India in order to promote home-grown brands. In the early 1990s, these concepts gained tremendous acceptability among Indian consumers, and the success of the same internationally triggered Indian brands to use licensing and franchising programs as an effective tool for propagation of their business.
International brands catering to the Indian market are making their presence felt in a big way almost everywhere.
Licensing of all kinds is gaining momentum and is leading to a large number of collaborations between international and Indian companies. These collaborations have led to economic growth and ample employment opportunities to various professionals related to the trade.
India witnessed its first international licensing event in New Delhi last November through the Brand Licensing India Conference 2008, which was supported by the Licensing Industry Merchandisers’ Association. The event served as a congenial forum for Indian companies to learn and share global licensing best practices, knowledge and “nitty gritties” of the business from their foreign business counterparts.
Indian consumers have become increasingly demanding, and the average spending power of consumers between the ages of 20 and 35 have led to a desire to have the best of everything that their money can buy. A plethora of international fashion brands are making the rounds in the Indian fashion industry, and well-known Indian fashion designers are licensing their products in overseas markets on a large scale. It’s considered trendy to wear branded and licensed products these days.
Apart from entertainment licensing (which has grown all the way to include a plethora of TV channels), sports licensing has recently become a multi million dollar business in India, with the formation of the India Premier League (IPL) being a good example of the action in this industry. The chairman of Reliance Industries had reportedly acquired the IPL’s Mumbai franchise for a whopping sum of US$111.9 million for a 10-year period. It is also noteworthy that BCCI, the organising board, has raked in nearly US$724 million from the franchise bids alone, according to The Economic Times.
The Indian Performing Rights Society (IPRS) and Phonographic Performance Limited (PPL) earn royalties for recording rights, performance rights and the copyrights on literary works used during these games.
Venues throughout the country use Hindi film and pop music on a large scale as part of the entertainment package to attract the audience, and the teams are required to pay the music licensing bodies their dues.
IPL branding has already been extended to merchandise including T-shirts, caps, cricket gear, stationery, bags and even to bars and cafes for wider coverage.
Rajasthan Royals, the champion of the inaugural IPL in 2008 and the joint owner of the team had partnered with a London-based entrepreneur and a Bollywood celebrity to boost off-the-field commercial potential of their franchise for the 2009 event.
The team had put into place extensive licensing and merchandising strategies that covered not only India but also various other countries where the team already had an extensive fan base. The franchisee also offered various sports products which were an instant hit with cricket fans.
Tie-ups with leading brands in India are being considered as a mutually-beneficial situation for both the brands as well as the cricket teams. With India’s cricket-crazy population and some of the biggest names in international cricket having been roped in, the IPL is set to be the biggest money-spinning game in the country.
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