Brand Licensing Consumer Electronics Industry Worth $1 Billion: LicenseWorks

  • LicenseWorks facilitates partnerships between internationally recognised brands and Indian entrepreneurs
  • This company has brought in consumer electronics brands like Thomson, Blaupunkt and Black & Decker in India

Rishabh Singla, Managing, Partner, LicenseWorks (LW) and Pranav Anand, Managing Partner, LicenseWorks, in an exclusive conversation with EFY Group’s Mukul Yudhveer Singh, shed light on the brand licensing industry in respect to global consumer electronics brands. The duo has successfully brought global brands like Black & Decker, Thomson and Blaupunkt to India through licensing partnerships with Indian entrepreneurs.

Rishabh Singla, highlighting how brand licensing works in consumer electronics industry said, “In brand licensing business, typically, a brand appoints only one partner for a particular line of business in a country, and both partners commit to it with a long-term intent. The better the brand does, the better the licensee does, the better off we are. So, everybody wins the same way. Or they lose the same way. It’s a very nice business model.”

Pranav Anand added, “What happens in a brand licensing partnership is that since you are partnering with a powerful brand, you get immediate traction and are able to scale up your business at a much faster pace.”

Here is everything about brand licensing in the consumer electronics industry

ACE – How does LicenseWorks, work in the field of consumer electronics?

LW – LicenseWorks is a brand licensing agency that facilitates partnerships between internationally recognised brands and Indian entrepreneurs, who are looking to scale up their businesses. We facilitate these partnerships, and we manage the business in terms of the ongoing activities also, on behalf of the brand owners in the Indian market.

One of the verticals that we work in is electronics and appliances. We are working with a lot of brands in this space, and helping them find the right partners in India and manage the business on-ground like their local office in India.

ACE – Can you throw some light on how many consumer electronics brands have you actually brought to India through the brand licensing route?

LW– Recently we helped Thomson re-launch televisions in India and now we have helped them expand into audio products as well and are now exploring opportunities in some other related categories. Similarly with Blaupunkt, we have helped them launch audio products and televisions in India. Black and Decker is another client and we have helped them launch their entire range of small domestic appliances in India and are now in discussions to launch their smart home solutions as well. These are some of the more recent examples.

ACE – If somebody from the consumer electronics industry is interested in reaching out to you for sourcing a brand license for a consumer electronics brand, what would be the procedure?

LW – We keep on getting inquiries from companies which are already active in the consumer electronics business. They might have their own brand or they might be running a large distribution business or a retail chain and might want to launch their own brand under a license.

So, we keep on getting such queries and depending on their needs, the profile of the company, their strengths and depending on what categories might be best for them for such a collaboration, we decide to work with them to identify the best brands that might fit their needs. And then we facilitate such partnerships.

ACE – How different is reaching out to brands as compared to reaching out to individuals?

LW – As far as the Indian market is concerned, we have been in the licensing business for almost ten years. So, we have a fairly good understanding of the market and know who the key players are. And, we know in which product category who to reach out to and what are the strengths and weaknesses of each player. We have very good relationships and network in the Indian market.

As far as reaching out to the brands is concerned, the brand licensing industry is fairly large globally but we’ve been in this business for a long time and we know most of the leading international brands. We reach out to our contacts as and when a suitable opportunity comes along and similarly these brands reach out to us when they are looking to expand their business in India.

ACE – How big do you think is the brand licensing industry in terms of consumer electronics in India? Can you also share an approximate figure as well?

LW – We believe the brand licensing business in consumer electronics segment in India helps generates revenues of around US$1 Billion annually.

ACE – Are you working on any new ACE brands that we may see in India very soon?

LW – We are in discussions with a couple of big international brands to help them expand their business in India. We should be able to share some exciting developments very soon.

ACE – Typically, when there’s a contract signed between a brand and an individual or a company, how long is that contract for? And what are the general terms and conditions?

LW – Each contract is customised to the situation but typically, the agreement term could be anywhere from three years to ten years. And these are also renewable, in most cases. if everything goes well, the contracts are usually renewed. We have seen brand licensing partnerships which have been going on for as long as 20-25 years! It all depends on the way the business is executed and if things are running smoothly, the contracts keep on getting renewed every 3-5 years and can go on for a very long time.

Once you join hands through a brand licensing partnership, then you are in it for the long term. It’s quite different from a distribution partnership, wherein we have seen brands change their partners every few years or when the business grows to a large size, they split it into 3-4 partners or more. In the corporate brand licensing business, typically, a brand appoints only one partner for a line of business for the entire country, and they commit to the partnership with a long-term intent.

ACE – If you were to suggest somebody looking to foray into consumer electronics business, what would you suggest – to go with a new brand identity or getting a brand license? Why?

LW – Building new brands requires a significant amount of time and investment and may not always be successful. Brand Licensing is a very effective strategy to enter a new market segment using the power of partnership with a strong brand. It enables you to expand distribution network at a much faster pace as retailers are keener on selling a known brand which has consumer pull.

Brand licensing also enables you to achieve higher profitability through better pricing and it helps you ramp up sales and market share much more quickly. In a cluttered and competitive market like India, brand licensing can be a far more effective way to differentiate your products and enable more consumers to discover and experience your products.

ACE – Thomson TVs are retailed by SPPL and Thomson audio products will now be retailed by Envent, what will be the service approach?

LW – The communication to consumers is very clear for each of the product lines and they know what route to take in case they experience any product issues. The brand team ensures the service processes are well structured so that the end consumer has a delightful brand experience.

ACE – How are multiple brand licenses handled by the same partner? What are the advantages?

LW – Several companies run multiple brands in the same product category, whether these are owned brands or licensed brands. Typically, they design their product portfolio strategy in such a way that different brands are positioned distinctly in terms of target consumer, pricing, communication strategy and channel strategy. For instance, a company may operate two brands of televisions with different feature packages at different price points targeted at two distinct consumer segments. This brand portfolio strategy enables companies to capture a larger pie of their target product category, enhance their clout among channel partners and build a sustainable, dominant position in the market.

Brand Licensing can be a very effective tool for companies to build a brand portfolio in quick time without large investments in brand building. These new brands, acquired through licensing, complement the existing brands in the portfolio (instead of cannibalizing them) and represent significant revenue opportunities.

ACE – According to you, what criteria a person or a company must fulfill before taking up brand licensing of any specific brand?

LW – Typically, we look for partners who, firstly can develop a strong, high-quality product range consistent with the brand image and positioning. Secondly, the partner must have a strong distribution network and service network. And thirdly, that partner should have the acumen to grow and manage a world-class brand.

So typically, product development, distribution and marketing capabilities are the 3 main things that we look for and then there are various other factors that are a part of our due diligence.

ACE – And how important are investments?

LW –A partner must be in sound financial health and should have adequate capital to be able to invest in the new business under the brand license. This is a hygiene requirement. The investments are commensurate to the ambitions and the scale that both parties desire to achieve.

Author – Mukul Yudhveer Singh. An avid reader, Mukul finds peace in books and technology. He’s as passionate about writing as he is about cricket and hitting the gym. If not writing or reading, you will most likely find him drawing tattoo designs or analyzing political campaigns.