 "Femina Flaunt")
It is not a magazine, TV channel, radio station or newspaper.
Femina Flaunt, the latest offering from one of India's largest media firms, the Times Group, is a brand of clothing, footwear, accessories and bags. It will be launched later this month across 20 Shopper's Stop stores in a one of its kind partnership - Shopper's retains the right of first refusal to buy the brand after its hits a planned Rs 100 crore in retail sales in five years. By mid-2016 Femina Flaunt, priced between Rs 800-Rs 4,500, should be in twice as many stores. It might just offer beauty salons and fitness bars too. In two-four years it should have its own line of colour cosmetics and personal care products. While Femina Flaunt is targeted at the 25-40 year old woman, the Mi (Ms India) range will target 15-24 year olds and Ms Diva 21-30 year olds. The last two are in the making. Besides this expect a Good Homes range of furniture, ed and bath and tableware, an ET Panache range of products for men and extensions around Filmfare.
The estimated Rs 7,200 crore Times Group has over the years extended it brand across non-media services such as education. This move, though, is intriguing. Licensed merchandising or selling consumer products and services around characters based on film or TV shows is an area defined by Disney, Turner, Viacom18 and Green Gold Animation (creators of Chota Bheem) among others in India. Globally consumer product licensing is a huge business. For instance, it brought in about $4 billion of The Walt Disney Company's $48.8 billion revenues last year. But in India, after over the 15 odd years of existence, consumer product licensing hasn't really set the market on fire.
So why get into it?
"Licensing is a very limited term. We are benchmarking against Vero Moda and Forever 21 not other media companies," says Sandeep Dahiya, director and business head, brand extensions, Times Group. "In licensing if you want Rs 1,000 crore in royalty income from the brand it translates into over Rs 5,000 crore in retail sales. In the US you could tie up with a Walmart and get access to 5,000 stores. Here the biggest chain would have 250. Shopper's Stop and others have 60-80 stores each. Therefore, to scale and ramp up, the game to play is as partners and through revenue share. If our partner (Shopper's Stop) makes money, we make money," says he.
The idea, he adds, is to create value around the brand so that over a period of three-five years, irrespective of the general decline in publishing, brands such as Femina, Filmfare, Ms India command a valuation that is at least three-five times the current one. "If you think of licensing as a subsidiary business you would do at best 10 per cent of top line. As a separate business, extensions can be five-eight times of current brand top line, if things fall in place," says Dahiya.
Anand Singh, director, Cartoon Network Enter-prises, South Asia, says licensing has remained small in India not because of lack of opportunity but because of "piracy and a complex retail story". The total retail value of licensed merchandise from media firms in India is estimated at Rs 3,500 crore. (Note that media firms get only 10-15 per cent of that as royalty or minimum guarantee.) More than half of this is products based on kids entertainment - Ben10, Chota Bheem, Doraemon and so on. The rest is from youth brands such as MTV or sports and fashion brands among others. Singh reckons that the unlicensed or pirated version of merchandise sells six times the legal levels.
A bigger scale seems more possible now. Saugato Bhomick, senior vice-president, consumer products, Viacom18, points to the biggest change and therefore opportunity the business has seen in the last couple of years--the rise of e-commerce. It has given consumer product firms a direct route to sell everything from water bottles and school bags to bed sheets and T-shirts to consumers across the length and breadth of India. "Viacom18 has been tripling its revenues over the last three years," says Bhomick. "E-commerce is taking licensed merchandise to consumer homes. People in small towns are buying. Someone in Gorakhpur just bought a 32- inch batman figurine," adds Singh.
"In the brand-building stage, the touch/feel/environment is very important. Once the brand is established the consumer will be confident of ordering a size or colour online," says Dahiya about attempting to ramp up using e-commerce. For now then the group will stick to hybrid partnerships or joint ventures. By the end of March 2016 he expects 16 categories of products between three brands - Femina, Good Homes and Ms India. For perspective note that Turner, which also sells on behalf of Warner Brothers, offers 48 product categories across brands such as Tom and Jerry, Batman and Ben10. Viacom18 has more than 25 active categories ranging from toys, back to school products, publishing and health beverages.
Could selling bags and shows prove tougher than selling newspapers and radio stations for the old lady of Boribunder?
