Show me the money: the inside story of brands and cricket stars8 min read . Updated: 04 Jul 2019, 04:30 PM IST
- While international sports stars have had a lot of success with their own brands over the years, the trend is slowly catching up in India
- A celebrity can provide a great push for a brand, but they can also have an adverse impact if they get embroiled in a controversy
While the army insignia on Mahendra Singh Dhoni’s gloves attracted much attention during the initial stages of the ongoing World Cup, not many would have spotted the logo on his shoes.
The logo is that of Seven, an Indian fitness and active lifestyle brand launched in 2016 by Dhoni in collaboration with Rhiti Sports Management, the firm that represents him. But Dhoni is not the only cricketer floating his brand. In the second week of June, former cricketer Virender Sehwag launched his brand “VS". Spinner Yuzvendra Chahal’s “Cheqmate" was announced just before the World Cup started. There are six Indian cricketers, former and current, who have their own fashion or lifestyle brands. The others are Virat Kohli, Yuvraj Singh and K.L. Rahul.
While international sports stars such as Michael Jordan, Cristiano Ronaldo and Venus Williams have had a lot of success with their own brands over the years, the trend is slowly catching up in India.
The number of athlete brands in India has grown from three at the end of 2016 to seven currently. But not all of them are doing well, says an official who works for a celebrity-led brand, requesting anonymity. Most brands just rely on the athlete’s personality to sell products, says the official. However, Vishal Jhunjhunwala, founding partner of Square Consulting, a sports marketing firm, believes more brands will enter this space in the near future since the market is driven by manufacturers.
PARTNERS Vs ENDORSERs
To appreciate what’s in it for sports celebrities and entrepreneurs, it’s worth looking at the two main business models of athlete-led branding. One is where the athlete is sponsored by a major label and launches his or her own line within that brand. Examples of such collaborations are Air Jordan (Nike with Jordan) and One8 (Puma with Virat Kohli).
The other model is where an athlete is the face of an independent brand, like Seven and Cheqmate. In this case, the athlete licenses his or her name to the brand and earns royalty or a percentage of sales.
Kohli has his fingers in both pies: Apart from sports lifestyle brand One8 with Puma, the Indian cricket captain has also been associated with Wrogn, a men’s casualwear brand, since November 2014. Wrogn is owned by Universal Sportsbiz Private Limited (USPL), which is backed by cricket legend Sachin Tendulkar. In addition, Kohli is the ambassador for a number of well-known brands like Manyavar, Tissot, Audi and Uber.
“Sportspersons and athletes have been brand ambassadors for various companies over the years, but at USPL we decided to take the association a step forward and evolve it into a partnership," says Anjana Reddy, CEO of the Bengaluru-based company. “We got the most stylish batsman and captain of the Indian team, Virat Kohli, on board as the curator of the brand."
What do brands gain by having athletes on board as partners rather than endorsers? For one, they get a huge discount from the athletes. According to industry estimates, Kohli charges anywhere between ₹5-5.5 crore per day as endorsement fee, and Dhoni, ₹1-2 crore. “So, instead of paying them ₹10-20 crore for three or four days a year, you can pay them, say, ₹5 crore upfront and the rest in sweat equity, where the celebrity is given a 5-10% stake in the company in exchange for their time," says the official quoted above.
This type of partnership also works because the athlete has a business interest in ensuring that the brand succeeds, says Jhunjhunwala. “They are planning for their future and need the brand to live on."
While it is often reported that the athletes have invested their own money in the brand, that is rarely the case, according to Jhunjhunwala. “Unless there is a very strong business case, I don’t see the talent putting in their own money because their name and presence itself is value enough". In the case of smaller brands, athletes may have put in money, he adds.
“In a case like Puma, the brand won’t need the investment because they are anyway big. In the case of brands like Wrogn, maybe the athletes have put in some money," he adds.
Skin in the game
Brands that Lounge spoke to said their athletes are heavily involved in their functioning. “Virat is more than just a face in our ads," says Reddy. “He is a partner working with the brand to make it an extension of his own maverick personality. He gives his feedback on the designs and helps co-create each new season’s look with his inputs. The idea is to incorporate his personal style, which is highly appreciated by the nation, into every collection of the brand."
Arjavi Marwaha, one of the proprietors of Gully Live Fast, a Mumbai-based streetwear brand that has tied up with K.L. Rahul, says that an athlete’s engagement with his own brand cannot be compared with brand endorsements. “When athletes endorse a product, they come and shoot for 4-8 hours and then they are gone," she says. “On the other hand, I know K.L. (Rahul) is thinking about Gully wherever he travels. He sends us photographs of stuff that he likes. Once, he told us he really likes long T-shirts, and this was a few months ago when the trend had not reached India. That is something we implemented. Cricketers travel a lot, so they get a lot of exposure. He loves giving his input and we love taking it."
Associating so closely with an athlete, or a celebrity, comes with its own risks. While a celebrity can provide a great push for a brand, they can also have an adverse impact if they get embroiled in a controversy. It’s a catch-22 situation. Marwaha experienced this earlier this year when Rahul, along with Hardik Pandya, was suspended by the Board of Control for Cricket in India (BCCI) for making controversial comments on a television chat show. The suspension was later lifted.
“It was a bit of a setback because we couldn’t market K.L. during that phase," she says. “But it wasn’t so bad because we have tried to ensure that Gully has its own identity, independent of the face of the brand. We have built our brand around street culture and K.L. is our additional push. We don’t show K.L. playing cricket in any of our marketing campaigns, and we don’t congratulate him for his cricketing achievements. His success or failure should not be the only factor that can take the brand to great heights or jeopardize its progress."
Keeping costs low
One major point of difference between Western and Indian athlete brands is the pricing. A simple women’s T-shirt from Venus Williams’ brand Eleven costs around $50 (around ₹3,500), while men’s Air Jordan shoes start from $70 and go up to $225.
Indian brands, however, are more pocket-friendly. The cheapest men’s T-shirt available on Seven’s website is for ₹325. Tees from Wrogn and Yuvraj Singh-owned YouWeCan start from ₹699 and ₹799, respectively. Men’s sneakers from Puma’s One8 collection start from ₹2,799 and go up to ₹6,999.
“We are still a growing market," says Marwaha. “People from our target group are still in the first jobs, or just out of college, or still studying. They can’t afford a premium brand. Your price point is key. If it doesn’t hit that sweet spot, you are not going to sell numbers."
To keep costs low, Indian athlete-centred brands tend to design their own products but outsource manufacturing and local distribution. There are exceptions like Gully, which does everything in-house. Most Indian brands also have an omnichannel sales strategy and ship overseas.
“Our products are available for sale with top online retailers such as Myntra, Flipkart, Jabong, in addition to our own website," says Reddy. “We also retail at Shoppers Stop, Central, Brand Factory, Pantaloons, exclusive brand outlets and leading multi-brand outlets. Our products are available in more than 75 cities in India, and in Sri Lanka and Nepal as well." While none of the brands were willing to share revenue figures, they all sounded upbeat about the future. “Our top-line looks good and since starting operations (in February 2016), it has been an upward journey for the brand," says Lokesh Mishra, chief operating officer of Rhiti Group, which owns Seven.
“We are available at 100 sales points across the country," says Shazmeen Kara, CEO of YouWeCan, launched in September 2016. “We have grown very fast in terms of the categories of products we offer. We started off with clothing for men and women, then we got a kids’ line, then accessories, then lifestyle jewellery, then sports equipment. There are two-three more categories which are in the sampling process and will be launched shortly."
Last December, it was reported that One8 recorded sales of ₹100 crore within the first year of its launch. In October, Wrogn’s parent company USPL raised $13.5 million from venture capital firms Accel and Alteria Capital. The company was valued at $160 million at the time, according to news reports.
“In just five years, the company has grown exponentially," says Reddy. “As on 31 March 2019, USPL had a workforce of 686 people and has reached a milestone of selling five million pieces of garments."
The official who requested anonymity, however, sounds a sobering note for certain brands that don’t do much research before launching products. “Most of the time it is just lazy marketing that they do."
The official also adds that Indian consumers don’t buy from a brand just because of its celebrity association. “If you are a Chennai Super Kings or Dhoni fan and you are paying for a match ticket, you will probably pay for a CSK or a Seven jersey. But otherwise you are buying fake replicas off the streets."
Reddy accepts that the “number of successful celebrity brands is still limited", adding that the challenge is to maintain a steady growth. She also says that ensuring access to consumers in tier 2 and tier 3 cities is important as there is a strong demand for celebrity fashion in such places.
Jhunjhunwala believes it won’t be long before a non-cricket sportsperson enters this space. “If the top 10 athletes are taken, you will have go to the next level," he says. “But you have to find an athlete who has the equity to push the product off the shelf. I think we will see a few more such brands launch but it won’t be too many. For a non-cricketer, the market will be very niche."
Jaideep Vaidya is a freelance journalist who writes on the business of sport.
This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.