New Delhi: SpongeBob SquarePants, for those who may not know, is a sea sponge which lives in the underwater world of Bikini Bottom along with various other cartoon characters.

Click here to view a slideshow of products featuring entertainment characters in store

Thanks to Colgate-Palmolive India Ltd, he will no longer feature just on the television channel Nick, but is also seeking a prominent bathroom presence in the form of so-called bubble-fruit flavoured toothpaste.

Children (and adults presumably) looking to vary their brushing experience can also try strawberry-flavoured Dora the Explorer toothpaste.

Colgate-Palmolive launched both products in India two weeks ago, joining other personal and home care products firms such as Hindustan Unilever Ltd and Dabur India Ltd as well as a handful of lesser known manufacturers that are using television characters to cater to children, whose pester power is increasing.

“Today kids take the buying decisions and parents only pay," said Anwar Ali, store manager at Delhi’s Mom and Me, a retail store chain that’s part of Mahindra Retail Pvt. Ltd. “We see a lot of excitement in our consumers towards these character products as compared with the general ones. Even the companies have become more aggressive in pushing such products into the market with more inventory."

No kidding: A child making her choice from a range of products at a mall in Bangalore. The market is flooded with pencil and lunch boxes, stationery items and school bags emblazoned with cartoon characters. Hemant Mishra / Mint

Shop shelves have been flooded with personal care products featuring characters such as Barbie, Tom and Jerry and Garfield, among others. A Hindustan Unilever spokesperson confirmed that the company currently has Pepsodent toothpaste packs in the market with characters such as Barbie, Superman and Tom and Jerry.

Hello Kitty will also enter the Indian market through Spacetoon India Pvt. Ltd, which has partnered with Japan’s Sanrio Inc. to become its official licensing representative.

“There is a huge list of categories we will enter including fast-moving consumer goods such as personal care items and confectionery for children," said Rajiv Sangri, chief executive officer of Spacetoon. “Currently, we are talking to a leading modern retail player in India to manufacture and sell these product by March next year."

To be sure, licensed entertainment characters is not new—the market is flooded with pencil and lunch boxes, stationery items, school bags, toys, games and even children’s garments emblazoned with Barbie, Dora, Hannah Montana, Tom and Jerry and many others.

However, it’s the first time that personal and home care companies are tapping into the character licensing opportunity for their personal care range as well as, in some cases, food products.

“The licensing arrangements are more useful for lesser-known brands which can ride on the popularity of the characters to increase sales," said Sandeep Dahiya, vice-president, consumer products, Viacom18 Media Pvt. Ltd, which tied up with Colgate-Palmolive for Dora and SpongeBob.

But it’s the licence owners who really stand to benefit. The distribution networks of the bigger of these companies go as deep as it’s possible to go in India, said Dahiya. “Their marketing and distribution penetration far exceeds the reach of our brands, clearly benefiting us in the process," he said. For the character owners, it is about strengthening their relationship with the consumers as the character plays a role in their day-to-day lives, he added.

Little surprise then that Maneesh Pharmaceuticals Pvt. Ltd, primarily a healthcare product firm, is expanding its association with the Disney characters.

“Closer to Children’s Day (14 November), we have plans to launch Fast-Aid Medicated Adhesive Plaster in association with others Disney characters," said Gauri Sapte, the firm’s business development head. “We will also use these characters for products to cater to teenagers."

In the licensing model, the owner of the character is paid a royalty on total sales. According to Sangri of Spacetoon, the average royalty on the wholesale price is about 10%.

“It also depends on the popularity of the character; royalty may even go up to 12% in some cases," he said. Since the licensees pay royalty on the products sold, the products also bear premium price tags. “They are more expensive than the unlicensed products and companies very comfortably increase the product prices by about 25%," added Sangri.

Licensing is becoming popular in the food and beverage space as well. Dabur has joined hands with Walt Disney to put Mickey Mouse on 200ml Real-Mickey juice packs.

“The brand aims to create higher demand among kids with this branding exercise and also communicate more effectively the message of ‘nutritional power of fruit juices’ to the mother," said a Dabur spokesperson. “By end-October, the company expects approximately 18 lakh Real-Mickey packs to be rolled out for sale in the north zone alone," the spokesperson added.

Dabur also has a partnership with Disney for Winnie the Pooh character on its honey packs.

The initiatives being undertaken by the companies indicate that the licensing of entertainment characters is set to play a more significant role.

“As modern retail becomes big and consumers, especially kids, become more choosy, the companies are looking at differentiating their products," said Sally Barnes, business head, License India—a division of Franchise India Holdings Ltd. There have been many instances of licensing of entertainment characters in apparel, stationery and toys but there would be a lot of action in the personal and home care space, she said.

According to ACNielsen, the overall toothpaste category is currently estimated at about Rs3,241 crore, and shampoo and soaps at Rs2,605 crore and Rs7,967 crore, respectively.

Dahiya said, however, that brand licensers will be careful about lending their characters to companies.

“We licence the characters only to established and respectable companies, especially in the personal care and food products categories. You cannot take a chance and have to ensure quality," he said.

Some of the established companies prefer developing their own brands for children.

“The decision of using characters to sell a brand or create a new brand depends on the business strategy," said Sameer Satpathy, head of marketing at Marico Ltd. “Marico has a long-term strategy to build children’s affinity towards the Parachute brand. Many companies borrow brand equity from characters to get short-term benefits."