Produced by Mattel Films, the Barbie movie has set a benchmark of sorts with over 100-plus brand collaborations earning millions in merchandising revenue. From Crocs to Airbnb, from Aldo to Etsy, brands have put a Barbiecore spin on some of their popular products this summer. So you have Barbie-branded baby rompers, drinkware, make-up kits, accessories and every other kind of sartorial allusions that come to mind. Barbie’s owner Mattel has also released an entire collection of Barbie merchandise, including sweatshirts, bucket hats, hoodies to make the most of the doll mania.
Now try thinking of one Indian movie — just one — that has been able to build a web of collaborations of that magnitude. Nada? Maybe a tenth of that size? Still nothing?
That’s the point. Apart from a Chhota Bheem here or a Bal Ganesh there, there’s been little effort to build an ecosystem that can support the market for licensed merchandise in the country. As Jiggy George, founder and CEO, Dream Theatre, told this newspaper in an earlier interview, “Licensing is all about building brands, but in India, the majority of them get it wrong because they want to start with licensing without building brands.”
The global market for licensed merchandise was estimated at $347.1 billion in 2022, and is projected to reach a size of $489.8 billion by 2030, growing at a CAGR of 4.4% over the 2022-30 period. At roughly $3.5 billion, India’s licensing and merchandising sector accounts for about 1% of the global market. And the best known licensed characters here have a global lineage —when it’s not one of the Disney princesses, it’s usually Doraemon or a Pokemon.
What will it take for India to make the most of the opportunity in waiting? Not that “characters” are in short supply. With an average of 1,000 new films released in the country every year, the movie market could be a good place to start.
Looking for inspiration
Unlike a Barbie in the US or a Hello Kitty in Japan, the Indian character ecosystem is replete with heritage and historical character brands, points out Asish SK, founder, Punnaryug Artvision, & chairman, FICCI-AVGC-XR Forum. But experience shows this market thrives on “live-action” characters. Hence, brand building investments must shift to building on iconic movie characters like Bahubali and Pushpa that lend themselves well to merchandising opportunities.
Next, to thrive in this nascent, a licensor must be able and willing to make big investments over the medium to long term. Barbara Millicent Roberts, for instance, was not created in one day — the doll started its innings way back in 1959. Also, there must be a concerted effort to customise the offering to answer local preferences while building a global appeal, says Sandeep Ranade, head, quantitative research, Hansa Research.
Another issue is tackling knockoffs and fakes, which has roiled the market and coloured consumer perception and purchase decisions, notes Ranade. Due to price sensitivity, Indian consumers often opt for cheaper counterfeit merchandise. Sports jerseys and shoes are commonly counterfeited, with vendors selling them at a fraction of the price of originals. This impacts demand.
One reason for this rampant counterfeiting is the high cost associated with obtaining licenses and the lack of awareness, particularly among people in smaller towns and rural areas. This hinders the adoption of licensed merchandise, leaving the industry unstructured and fragmented.
“To overcome these challenges, the industry needs to focus on creating awareness among brand marketers about the benefits of licensing, developing strong anti-counterfeiting measures, and investing in training and development of manpower,” says Divyapreet Singh, marketing head, South Asia, Wella Company. Wella brand OPI has collaborated with the Barbie movie and in the past, with Hello Kitty and XBOX.
Not that the merchandising story in the country is over even before it started. The rise of Web 3.0 and the establishment of the Metaverse have the potential to change the script. They might open up new channels for Indian characters to gain popularity. More importantly, the industry is witnessing a shift — with many older consumers accepting and even patronising branded merchandise. Once the consumer base widens sufficiently, new avenues for growth will also open up, say experts.