Pester power kindles kid’s wellness licensing in Indian market

Kids mean big business opportunity to marketers.  About 40 crore kids under the age group of 10-12 are the most conspicuous consumers’ lot, lapping up not only in the apparel, toys, eatables, gadgets, accessories and shoes market, but also counseling their parents on big-ticket purchases.

Pegged at Rs.380 crore in 2012, the baby toiletries market is growing at 20 per cent annually. Out of which, the skin care market for babies was valued at Rs.400 crore in 2012, growing at a CAGR of 15 per cent. Similarly, the hair care market has seen growth of Rs. 40 crore in 2012, growing at a CAGR of 5 per cent.

Worth mentioning here is the size of the cosmetics market for kids, which was valued at Rs. 7.9 billion in 2013, growing at a CAGR of 12 per cent. While, the baby hygiene products market was valued at Rs.1.9 billion in 2012 and is expected to grow at a CAGR of 18 per cent.

Significantly, licensors are playing a pivotal role in fuelling the demand of kids product, by stamping their favourite super heroes like Chhota Bheem, Spiderman, Doraemon and others on the personal care range, with big companies like HUL, Future Group and even Dabur India, which has entered into the kid’s space with Pooh Bear honey and Chhota Bheem Odomos mosquito repellent wristband. In fact, Johnsons & Johnsons Band-aid has signed a promo licensing deal with Chhota Bheem recently for an undisclosed amount.

Notably, not only national players, but international brands are also taking licensing route to encourage kid’s wellness products’ demand. Leading international brand L’Oréal had entered into the kids shampoo category in 1998 and has signed a licensing deal with Walt Disney. At present, L’Oréal is offering wide range of kid’s Disney shampoos not through any brick and mortar shop, but through online retailers like Amazon, Flipkart and its official website at a price point of $3.19 onwards.

Likewise, some other foreign brands are in conversation with upcoming licensors to feature Minions Movie, Jurassic Park, Rovio (Angry Birds, Star Wars, Stella) and others, to capture the wellness products’ shelves.

Need for licensing in wellness
Wellness in licensing has helped established companies to foray into kids’ product space, as they were otherwise challenged to position their products in the kids’ category. Here, not only customers, but licensors are also helping them to come out with products which are ready to penetrate sensitive little consumers, making them kids ready. They also charge a premium price for a product category, which is otherwise very competitive due to the strong position of existing brands.

“Dabur India operates in the personal application products. Since this product is targeting kids, the brand has entered into an agreement with Green Gold animation under which Odomos will use the image of ‘Chhota Bheem’ to adorn the wristband and mosquito repellent patches,” said Ajay Motwani, Marketing Head-Home Care, Dabur India Ltd.

Voicing the same, another licensee of Chhota Bheem, Navdeep Mehta, Director, Novateor Sales & Marketing Pvt. Ltd, said, “In India, I believe, awareness and significance of kids’ specific personal care products is increasing day-by-day, considering the fact that kids need slightly milder products compared to adults. With a vision to encourage kids towards better oral care and personal care, we have developed innovative products with kids’ favourite cartoon characters. So far, we have received very good response from each and every region where we’ve launched our product.”

Likewise, Alok Kamat, Managing Director, Alkam Licence Products Pvt Ltd., revealed that kid’s wellness product does attract attention of its target consumers, but other essential factors like product positioning, product placement and marketing also play a pivotal role, which a wellness licensee should not ignore. 

“We deal with good child footfall outlets like departmental stores, toy stores, apparel stores, LFOs and the adult cosmetic outlets where kids accompany their mothers. We have got the big learning that ‘what looks best, sells best’ concept works well with kids so we keep our products at such cosmetic outlets where it catches the attention of those parents who are accompanied by their pestering children,” noted Kamat.

Licensors open to sign wellness products

The loyalty of kids towards a favourite superhero or cartoon character on wellness products is enough to give a tough competition to wellness product manufacturers. Thus, licensors are betting high on wellness products’ licensing, which is slowly picking up and showcasing high growth potential.

“As increasing number of Indians cutting across demographics gets exposed to content-rich storytelling, we will see the licensing business grow,” said Abhishek Maheshwari, Vice President (consumer products) at Disney India, one of the biggest licensors in the subcontinent.

Meanwhile, Jiggy George- Founder & CEO Dream Theatre Pvt. Ltd., who has recently entered into the world of licensing, bringing a much promising mobile game ‘Candy Crush’ on offer, said, “Dream Theatre has three verticals-Entertainment, Sports and Fashion. There are brands in each of these that have licensing potential for personal care: Hello Kitty, Real Madrid, Miss Diva, WWE, Candy Crush- all have potential for extension. FMCG has the much needed distribution to reach fans in India and it’s a core category that we are always looking for licensing opportunities.”

Challenges pertaining to licensing
Apparently, like any other business strategy, licensing also has certain setbacks like - licensors keep a constant tab over the product quality, which at times, creates issues.

“For my products, not only I have to go and pitch to the retailers, but also, I have to convince the retailers that yes, there will be consumers coming to their outlet and asking for Barbie products and that’s the biggest challenge we have been facing since 2009,” said Kamat, one of the biggest licensees of kid’s wellness products in India.

According to some niche wellness players in the category, licensing might affect the soul of their products and shift consumer’s focus towards the animation character.

Highlighting another essential point, Rajesh Vohra, CEO, Artsana India Pvt. Ltd., who had taken a plunge of licensing with Walt Disney, said, “We didn’t face any particular issue so far, but we do find the same franchise offered to so many product categories, which at times dilute the particular licensed products’ existence on stalls. In our case, we have carefully chosen the characters and have developed apt product in line with the story,” noted Vohra.

Outcome
Like the two sides of a coin, licensing also holds certain hiccups, but that really doesn’t mean one should ignore the opportunities it is offering to the wellness products’ promotion. After all, our small consumers also deserve acute wellness