IPL merchandise scores big in third season4 min read . Updated: 05 Apr 2010, 02:37 PM IST
IPL merchandise scores big in third season
IPL merchandise scores big in third season
Mumbai: Just three weeks into the Indian Premier League (IPL) cricket tournament and the Mumbai Indians have already crushed last year’s champions, the Deccan Chargers, in at least one important category: merchandise.
While experts may not have expected the Mumbai Indians to top the charts following their not-so-stellar performance in the second season of the Twenty20 tourney in South Africa—of the eight teams, it was seventh on the league table in 2009—their performance this year has made them and their merchandise popular.
“The league table is a very good indicator of how popular the team is and how well their (merchandise) sales are," said Saumitra Srivastava, director for Yog Sports Pvt. Ltd, the official distributor for all IPL merchandise.
While he refrained from commenting on how much each team had sold individually, Srivastava said on the whole the firm sold anywhere between Rs2-5 lakh worth of merchandise at each match. The amount varied due to factors such as the size of the stadium and the city in which a match was played.
After failing to launch merchandise themed after the league in a big way in the first two seasons, the Board of Control for Cricket in India was keen to set the ball rolling in time for the third season.
The deal with Yog Sports, announced on 30 March, a good two weeks after the launch of the tournament, meant that spectators would have access to products ranging from watches, apparel and accessories to toys.
The effort seems to be paying off, as audiences swathed in their favourite team colours and armed with some heavy-duty cheering equipment throng stadiums.
“Typically, merchandise sales depend a lot on how the team performs. This year Mumbai Indians has performed really well, and we’re seeing a huge increase in sales," said a spokesperson for the Mumbai team. This year the team has 31 different pieces of merchandise over the 20 items in previous seasons.
In the Chennai Super Kings camp, T-shirts bearing captain M.S. Dhoni’s name and his number seven team number are flying off the shelves. The team currently has 28 branded items, which include T-shirts, binoculars, caps, wallets and belts, among other things.
“We’ve sold nearly 30,000 to 40,000 units of all items, except clothes and apparel, which could be more," said Rakesh Singh, head of marketing at Chennai Super Kings. The team had clocked in over Rs1 crore in merchandising during the first IPL season and over Rs2.5 crore last year. “This time we expect an increase over Rs2.5 crore because the series is being held in India and it’s a much more concerted effort," he said.
Some teams are actively looking to tap into a wider and more lucrative segment of consumers in the next season. “While we’ve already launched turbans, flip-flops and tees (for kids) this year, we need to launch something more for this segment," said Raghu Iyer, chief marketing officer at Rajasthan Royals.
Beyond this, the team will also look to engage with fans in other regions. “We were really surprised to see that we had a fair amount of support from audiences in Punjab as well," Iyer said, adding that the team expected merchandise sales to be in “excess of $1 million (Rs4.5 crore today)" it made in season 2.
For manufacturers, too, this season has been a bit of a relief after last year. Some of them were burdened with large quantities of unsold goods as the league moved to South Africa last year. “There is a visible increase in footfalls in Puma outlets, by 25%, due to the association (with IPL)," said Rajiv Mehta, managing director for Puma.
Value for money is key to successful IPL merchandising. “Everyone wants cheap and cheerful cheering equipment," said Srivastava of Yog Sports.
Trumpets, branded team flags and glow horns—a headband with devil horns that glow—are selling well.
“I always thought that these glow horns were restricted to bachelorette parties," he said. “But their popularity is unbelievable. We’ve even had some 60-year-olds who bought them for themselves. A consumer is a child in that environment."
Products need to be priced right to make them impulse purchases. “In a Twenty20 match, there is just no time. You really don’t have 30 minutes to sell them a piece of merchandise. Consumers just want to make that impulse purchase and get back to the action," he said. “The Rs300 and below is the meaty price band to churn out the sales required."
No surprise then that practically all the teams have flooded the stadiums with branded items that come at affordable price points, from the simple trumpets and flags at Rs50 to caps at Rs75 and T-shirts at Rs200 onwards.
While it has the potential to become a huge business, merchandising still occupies only a small part of franchisees’ overall revenue. “We get margins of only 10-12% of overall sales on merchandise," said Singh of Chennai Super Kings.
IPL’s recent deal with Google Inc. to screen matches live on the YouTube website has meant that the event is reaching out to more audiences across the globe, many of whom may want to access branded merchandise through the online IPL shop.
“It’s not just international customers (who log on), but also local customers who may want to buy their merchandise before they go to the venue," said Vishal Mehta, chief executive for Infibeam.com, an e-commerce company that manages the sale of branded merchandise on www.infibeam.com/ipl
Mehta said the initial inventory of merchandise, which was “in the thousands", had been sold out.
One thorn in the side for manufacturers and distributors are the knock-offs. “While we haven’t put a number on it, it would be safe to assume that we would have lost 15% of our revenues to counterfeit products," said Srivastava of Yog Sports.