2015 will present a sea of opportunity to savvy licensors and brand owners keen to capitalise on growth opportunities.
International penetration will be a key indicator of success this year and the execution of global licensing programmes will set the best licensors and brand owners apart from their competitors.
I’m sure the majority of the licensing community would agree that for a long time, licensing was seen as a business add-on; almost an ad-hoc process used to generate some revenue when the opportunity arose, with little emphasis based on any strategic direction. The past decade, however, has seen a real change in sentiment and we’ve seen it develop into a completely separate corporate function and part of a wider business strategy, in the West especially.
While the UK and USA remain key growth areas, 2015 will be a year for international growth. We’ve seen the sales of branded merchandise outside of the Western world steadily increasing over the past five years and this upward trajectory can only continue as licensed properties continue to gain traction across multiple territories. As broadcast, publishing deals and movies start to penetrate wider audiences, it’s essential that licensors look at expanding their programmes to fully capitalise.
International events including the Dubai International Brand Licensing Fair, the Hong Kong International Licensing Show, the Russian Licensing Forum and the China Licensing Expo are now attracting a high calibre of attendees, demonstrating just how much focus licensors and brands owners are putting into their international efforts. In addition, Licensing Expo and BLE are continuing to attract an increasingly international audience, all keen to learn how they can seize international growth opportunities.
The BRICs are a great example of emerging countries that have developed into more business savvy and wealthy territories, attracting a significant amount of foreign investment. Licensees and licensors alike are realising the potential of these once lesser-considered territories and they are now attracting interest from global businesses. These areas, where businesses have traditionally been reluctant to operate, are now gaining traction as misconceptions and fears are eradicated as a result of business practices becoming more sophisticated and in-line with other parts of the world.
All this is exciting news for the licensing community. However, I can’t stress the importance of a clear strategy to ensure successful penetration into wider territories. Considerations for international licensing programmes include but are not limited to:
• Cultural differences and language barriers;
• Varying appetites for licenced merchandise;
• Differentiating business practices;
• Local Government and policy issues;
• Lack of transparency in some territories.
For these reasons, it’s imperative that licensors have a solid understanding of the areas they see growth opportunities. Partnering with agents or appointing staff on the ground that are well-versed with how business is conducted in the desired expansion territory could be key factors to success.
So there you have it, if there’s one thing I’d tell the licensing community to bet on this year, it would be international growth, but not without a sound strategy in place.