Brands scale up youth merchandise
- Amit Shah says ‘Save the Constitution’ is Congress’ campaign to save dynasty
- Google CEO Sundar Pichai poised to cash in $380 million award this week
- Facebook rejects Australia media calls for regulation
- News in Numbers: 2,116 girls below the age of 12 became victims of rape in 2016, says NCRB
- India may burn, but Modi only interested in becoming PM again: Rahul Gandhi
New Delhi: The consumer products division of Viacom18 Media Pvt. Ltd is scaling up its youth merchandising range, launching new product categories and expanding its existing range. Viacom18 recently added MTV deodorants, footwear and cosmetics to its portfolio and introduced new ranges of sunglasses, watches and apparel, targeting youth between the age group of 13 and 25 years.
Viacom18 is a content creation company that has interests in films and owns television channels such as MTV, VH1, Nickleodeon and Colors.
Disney India, popular for its cartoon and animated characters like Mickey Mouse, Bambi and Marvel, is eyeing adult fashion too. The company has tied up with fashion brand Vero Moda to launch a limited collection clothing line inspired by Bambi in November. Earlier in August, Disney partnered with Only and launched a Mickey Mouse inspired apparel range.
“In the past two-three years, youth fashion has really started to pick up and we are seeing a very strong growth there. Youth fashion has become almost a third of our fashion business,” said Abhishek Maheshwari, vice president and head, consumer products at Disney India. Industry estimates suggest that the merchandise business of Disney is valued at Rs1,500 crore in retail sales in 2015-16 and is expected to close 2016-17 with Rs2,000 crore.
Companies such as Viacom18 are banking on the adult segment for growth in their merchandise business usually associated with children’s categories like toys, stationery and other accessories.
“We are operating over 35 categories in youth segment. We have more than doubled our business in youth licensing in the past one year and we are growing around 70% this year, driven by apparel, accessories and footwear,” said Saugato Bhowmik, business head at consumer products and integrated network solutions at Viacom18.
Viacom18, apart from owning rights to its own television properties also owns third party brands like Charlie Brown. It also has the master licensing rights to sell the Spanish football club FC Barcelona merchandise in India.
In November 2015, Viacom18 launched FLYP@MTV café in the youth segment in the capital and plans to expand the café chain across cities.
Motorcycle maker Royal Enfield is developing its merchandise range as a separate revenue stream too. The company sells riding gear and apparel suited for riders (lifestyle jackets, denims etc) under its merchandise business and targets adults (above 18 years) for apparel and accessories.
According to Samrat Som, head for gear (apparel and accessories) at Royal Enfield, growth in the adult segment has been phenomenal. “Our business has grown four times in the past one year. We are expanding the range to complete our core product offering to our consumer. We don’t call it merchandising. It is a new business altogether,” he said, adding that the company has a very small offering in children’s and women’s category and focuses on men’s range.
Company executives attribute this growth to a several factors. For starters, the online marketplaces such as Amazon, Flipkart and Myntra are helping companies reach consumers in smaller towns. “With internet reaching tier II and tier III cities, youngsters are able to buy merchandise of the brands they associate themselves with. It is not possible for a brand to physically reach these towns,” said Tuhin Mishra, managing director and co-founder at sports marketing firm Baseline Ventures which was recently appointed as the exclusive licensing agency of the Premier League football club Liverpool across three countries—India, Sri Lanka and Bangladesh.
The company will be selling official Liverpool merchandise including apparel, footwear, stationery products and mobile phone covers in the three countries and expects to earn $4-5 million as licensing revenue by the end of 2017---- at least 40% of which will come from online channels.
Secondly, a lot of global companies are increasingly looking at the Indian market to popularise their brands here. “For example, football clubs have a huge fan following in India. Youngsters associate themselves with these brands. These have just started to enter in India and people can easily buy their merchandise now,” said Rajat Wahi, partner and head (consumer markets) at consulting firm KPMG.
Wahi further added that the regulatory changes in single brand retailing will further help the companies expand their merchandising business which is a small category right now. In November 2015, the government allowed single-brand retailers with foreign investment to sell online, which consequently paved the way for companies to set up their own e-commerce portals.
According to the retail consultancy Technopak, the merchandise market (including sports, media, cartoon and celebrities) in India is currently valued at Rs 4,500 crore, up from Rs 3,000 crore in 2014 and is growing at the rate of 15% per annum.