Rise & rise of American pop brands: How the products became a hit in India

Hollywood cashes in on the growing appetite for branded merchandise in India, but home-grown characters and celebrities struggle to play the game

The market for licensed merchandise in India is exploding; according to a recent report by ESP, a Group M company, licensing and merchandising (L&M) is a staggering Rs 870-billion plus industry in the country. This constitutes between five and seven per cent of the global L&M market, small but significant enough for every superhero franchise to flood the market with a figurine or branded accessory. However, less than 10 per cent of the total Indian L&M pie comes from Indian brands. Hollywood and American pop culture rules the niche, even though TV, Bollywood and sports leagues have put their might behind their merchandised icons.

 For Hollywood, the L&M business plays a vital role in their movie marketing strategy for India. This year, for instance, Disney has a range of merchandise around its latest Star Wars movie (The Last Jedi) just as it had for Thor: Ragnarok in 2017. Sony Pictures has an assortment of products ready around its latest release Jumanji 2. But none of the big Indian releases over the past two years (Baahubali 2: The Conclusion is an exception) have even come close.

Not just child’s play

Merchandise is not just a kids’ game; that is what most Bollywood producers and Indian television magnates do not understand say industry experts. So far the maximum effort has been towards nurturing the kids’ entertainment genre—from Chhota Bheem (Turner) to Motu and Patlu and Shiva (Viacom18), most products have been aimed at school-going kids. 

However this is a rather myopic approach believes Bhavik Vora, founder and CEO of brand and licensing consultancy Black White & Orange Brands. Especially because online marketplaces have opened up an effective sales channel and the Hollywood playbook shows that young adults and even people in the late twenties to early thirties are big consumers of merchandise.

“While kids’ (entertainment) brands have got traction, it is a limited audience. What is attractive, from a business point of view, about the licensing rights from Marvel, DC and some of their TV shows, is that it lets one tap into the 14-35 year age group, which is a scalable proposition.”  

Underestimating the opportunity

Jiggy George, founder, Dream Theatre, a company that works with international studios on their merchandise development in India says, “The focus on homegrown IPs started only three to five years back. Indian broadcasters were late to the party. In addition, there seems to be barely any effort to work towards growing the eco-system.” 

George believes that the potential (even in the kids’ genre) for L&M is huge. This is evident from the huge viewership numbers many of the kids’ shows stack up. But converting this audience into merchandise fans is a hurdle that few have been able to cross. And just as the game has spun away from the domestic content producers in the kids’ genre, it could go the same way for Bollywood and sports—two areas that have big merchandising potential in the country.

The Indian Premier League franchises like Kings XI Punjab, Kolkata Knight Riders, Bengal Warriors (Pro Kabaddi) and the All India Football Federation have tried to play the game, but with limited success. Ditto for Bollywood. In the past, films like Ra.One, and Krrish have launched merchandise around their movies as have recent titles like Raees and Rock On 2 but the response has been tepid. 

“The most important lesson that Bollywood could learn from its western counterparts is the way it looks at merchandising. Here it is still treated like a marketing tool more than a revenue stream. For the L&M piece to make business sense, a significant investment and a long term plan needs to be in place,” Vora says.

One area that could see some traction this year is celebrity licensing and here many believe, Indian sports heroes have learned their lessons well. Be it Virat Kohli, Anushka Sharma, Sachin Tendulkar and several others, many are building ‘merchandisable’ avatars. However, the big challenge will be to protect the celebrity’s brand value while commoditising it. “For celebrity owned labels or merchandise to work, the product has to be immaculate. The Indian consumer is cost and quality conscious and if the product is not up to the mark, it could back fire,” says George. 

Celebrities also need to ensure that their labels eventually turn independent of their success or failure. Vora believes the only Indian brand to have done this is Salman Khan’s Being Human. No amount of controversy or failure keeps fans away from his label; now that is a sweet spot that most celebrities would stake an arm and a leg for.