Pursuant to a lawsuit filed jointly by Reliance Industries and B62 Studios, the Madras High Court last week injuncted Amazon Seller Services, Flipkart, Facebook, Instagram, among a host of other marketers, from permitting unauthorised sale of merchandise based on copyrighted work from Dhurandhar and sequel Dhurandhar: The Revenge.
That, in a nutshell, is the biggest stumbling block in the merchandising industry’s growth path — a low signal to noise ratio. While the film Dhurandhar 2 is well on its way to crossing Rs 1,500 crore in box office collection worldwide, there is very little merchandising activity around the franchise apart from the Ranveer Singh-signed clothing etc available on fashion e-retailer Ajio. “Not exactly a category on fire,”says Ravi Adhikari, brand lead, Chupps, a footwear brand that also sells merchandise in partnership with a handful of IPL teams.
Compare the buzz — or the lack of it — around Dhurandhar merchandise with that around some Hollywood movie franchises. In its first year alone, Frozen generated over $5 billion in merchandise sales, driven by immense demand for Elsa dresses and Olaf merchandise. Then there is the Harry Potter/Wizarding World, a franchise that generates massive revenue through products like magic wands, robes and LEGO sets. And even before its live-action remake, The Lion King established a massive merchandising line of plushies and apparel raking in close to $3 billion in global sales.
That is not to say India is a new player in the movie merchandise story. One of the earliest Bollywood films to launch over 200 products in partnership with brands like Mattel, Ceat and Archies was Dhoom 3 (2013), the third installment of the high-octane action franchise from Bollywood banner Yash Raj Films. A couple of years before that, the Shah Rukh Khan-starrer Ra.One (2011) set off a trend of sorts with an extensive online store and action games for mobile devices.
More recently, the 2017 Tamil/Telugu hit Baahubali: The Conclusion shook up a jaded category with high-quality figurines of key characters Baahubali and Bhallaladeva and official merchandise such as weapon replicas, lifting hopes of many in the business.
Then there was the big lull.
“Merch is treated as a cost, not a revenue channel. When no one’s tracking what it does, the budget stays thin year after year,” says Adhikari from Chupps.
With a growing number of youngsters wearing oversized t-shirts with anime, Marvel and DC action figures embossed on them, why is the merchandising industry still waiting for its breakthrough moment?
Experts put it down to a fragmented retail landscape, rampant piracy, the lack of regulation and price sensitivity among consumers. So while the market is valued at around `4,000 crore (with 80% of the revenues contributed by entertainment), the products on offer remain unimaginative and growth tentative.
Slow & unsteady
Jiggy Goerge, founder & CEO, Dream Theatre, says the problem is not demand, it is the broken retail system of India. India can be a strong market with consumers deeply familiar with global intellectual properties (IPs) like Disney, Pokémon, DC and Mattel; but “the real challenge has been distribution”. “Retail in India is highly fragmented, making it hard to build scale and reach,”says Goerge.
Entertainment and cartoon-based characters still dominate the merchandising landscape in the country. Chupps’ Adhikari adds most of the business runs through informal networks, local printers and small gifting vendors, with little standardisation in pricing and quality. “That’s not a foundation you can build on,” he says.
Even in sports, which is a Rs 1.8 lakh crore ecosystem, the merchandise business remains underwhelming. Prasanth Shanthakumaran, partner & head of sports sector, KPMG India, puts India’s sports merchandise segment at `19,000-23,000 crore in FY26, projected to grow at a CAGR of about 15%.
“The merchandise business in sports suffers due to high prices, with cheaper alternatives and knockoffs available quite easily,” says Shanthakumaran. While an original IPL team jersey might cost about Rs 2,000-3,000, a knockoff can be bought for anything between Rs 300 and Rs 500. Second, since cricket earns its biggest revenue from broadcast rights, there is little attention to merchandise.
“European football leagues have built their fanbase over centuries; India’s franchise league story is just a two decade story. In cricket — a country-first game rather than a club-first one — fanbase and sentiment building will take time,” says Ambar Aneja, co-founder & CEO, Six5Six.
There is reason for hope. Digital and quick commerce are opening up the addressable market. “Consumers now have access to authentic licensed products at more accessible price points. If there was ever a right time for the licensing business in India, it is now,” says Dream Theatre’s George.
There is also institutional focus. Take The Souled Store, which describes itself as a “one-stop shop for everything pop culture”. About 40% of the 13-year-old company’s top line of `492 crore is contributed by merchandised apparel with licences from Disney, DC and Marvel.