Television

Regional market contributes 12 per cent to Cartoon Network Enterprises

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MUMBAI: It was a big deal for a 90s kid from non-metro India to get hands on a Batman or Superman figurine. A Justice League T-shirt would have bowled them over because authentic merchandise shopping was a ‘city’ thing, for the sheer lack of access. Hence, counterfeits thrived.

Since then, the merchandising industry in the country has come a long way given that consumers can now access their favourite character-driven consumer products at the click of a button online, sitting at home. As Cartoon Network Enterprises (CNE) director Anand Singh rightly pointed out, e-commerce has helped Cartoon Network expand the licensing and merchandising business to the regional and Tier I and Tier II markets as well.

CNE is the licensing and merchandising arm of Turner Broadcasting System Asia Pacific.

“Earlier, there was a restriction of location, one could have limited inventory per character, pilferage and cost of carrying inventory, and promoter cost added to very high overheads, which made the business difficult. But, e-commerce has revolutionised the process, by adding another distribution channel. The cash-on-delivery proposition has allowed the assortment of products to be exposed to potential consumers in newer markets,” Singh informed.

Singh shared that 30 per cent of the business done by CNE comes from e-commerce with double-digital growth rate. The merchandising and licensing division itself has grown three times since 2014, thereby identifying e-commerce as one of the key growth drivers.

Close to 12 per cent of CNE’s business currently comes from the emerging regional markets, including a significant chunk from the north-eastern states.

“We have recently tied up with a brand called Dukes from Hyderabad.
There is a company called Kishna Snacks from Guwahati which has done amazing work with the promotional license for Batman Vs Superman, and Tom and Jerry,” Singh said.

While ease of access through online shopping has been a major boon to the business made in regional markets, it's the willingness of local and regional brands that have augmented growth. The country’s new-found love for Hollywood superhero movies can be credited for this acceptability.

And, since CNE also represents the Warner Brothers Consumer Products IP portfolio for south Asian markets, its proposition for the regional markets has only increased. The portfolio includes hit favourites like Tom & Jerry, Looney Tunes, Scooby Doo, Superheroes from the DC portfolio such as Batman, Superman, Flash, along with various WB movie franchises such as Harry Potter series and TV shows such as F.R.I.E.N.D.S. and Big Bang Theory, etc.

“We see a lot of interest from the regional FMCG and food and beverage players. It all comes down to the resonance with these classical franchises. Brands have come to realise that buying licenses to these properties is not as expensive as they thought it was. There was a general assumption in those markets that being regional players it would be too much to go after global franchises. But, that mindset is changing and more and more regional players are opening up to the idea," he said.

According to industry guesstimates, currently, licensed merchandised market for character IPs or franchises for kids stands at Rs 5000 crore, growing from Rs 3500 crore, last year. Without sharing any figure, Singh asserted that, though CNE may not add huge numbers to the network's top line, it's a highly profitable business.

In 2012, Cartoon Network Enterprises was expecting a turnover of Rs.1,650 crore in the next three years as against a Rs.850 crore turnover previously, according to media reports (source:
licensing.org)

Of the major 500 licensees, CNE handles close to 135 across India and south Asian markets with more than 5000 SKUs on retail across mass distribution, modern trade and e-commerce. Currently, CNE South Asia looks after the territories of India, Pakistan, Bangladesh, Sri Lanka and Nepal, which will be added later this year.

CNE’s most recent tie-ups include strategic partnerships with Myntra for apparel and fashion accessories and a DTR (direct to retail) deal with Future Group across product categories.

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