Hasbro has become the No.1 toy exporter from India: Claire Gilchrist
Present in India for over 30 years, global play and entertainment company Hasbro is now upping its game in India as it plans to boost the licensing program of its iconic brands such as Nerf, My Little Pony, Transformers, Play-Doh, Monopoly, Power Rangers and Baby Alive.
Earlier this week, Hasbro announced the appointment of Black White Orange Brands, one of India’s leading brand licensing agencies, as their licensing agent for India. Black White Orange will now look to expand the licensing program for Hasbro with an initial focus on the apparel, accessories, back-to-school, promotional licensing, sporting goods and publishing categories. The agency is also planning a major push for the brands throughout the upcoming festive and back-to-school seasons.
Adgully caught up with Claire Gilchrist, Vice President of APAC Consumer Products, Hasbro, Inc., during her recent visit to know more about the growth strategy and business plans for India. Excerpts:
Please take us through the journey of Hasbro in India.
Hasbro has been in India for over 30 years. Our business was looked after for us by our agents. It was mainly done by Funskool, who is our agent and distributer for toys and games. Also, because of the importance of India as a market for growth and expansion, a few years ago the board of directors decided to go direct. So in April 2017, we opened Hasbro India and we started to make a team with whom we went direct to the retailers in India. We still maintain a relationship with Funskool, but it is on a small scale. The business has had fantastic growth. It has grown to almost 10 times in the last couple of years. We felt the time was absolutely perfect to then build on the toy and game business and also now to expand and extend brands into consumer products, into promotions and location based entertainment which is run by the consumer products organisation.
Could you tell us about your relationship with Black White Orange Brands?
Given the consumer products business that we have, we first had to decide whether to go direct or go with an agent. We thought the best way to build a consumer products organisation is through an agent who has deep rich insight of the market and lives in the market. We have been in talks for the last 2-3 years and I did an extensive search to find the right agent in India.
It has been building for 3-4 years, but now it is official. We have signed a 3-year deal together, hoping we have a stronger term partnership too. Black White Orange (BWO) will be our agent in India and they will be leading our consumer products. All of the products manufactured in India will be supported by them. They will also handle the promotions are. Our 3rd section of business, which is location-based entertainment like theme parks, live shows, etc., will also be partnered by them. We chose BWO because it is a cultural fit for us. We are thrilled to have them on board with us.
What is the growth and size of the toy industry in India?
As per the Euro Monitor report, which is the only study that tracks the toy industry in India, this industry is between $450 million and $500 million in terms of size and retail value; but what we believe is that it significantly under-reports the segment. We have interacted with all the associations and after triangulating the data we believe that the size of the industry is anywhere between $800 million and $900 million. Of course, a large portion of it is unbranded and Chinese imports, which are not necessarily very well regulated.
What has India’s total contribution been to the revenues of Hasbro?
Unfortunately, we are not allowed to share revenues. However, I’ll share one comment, India and China are two primary markets for Hasbro. We have huge expectations for both. We’ve had 10 times the growth in the last few years and we will definitely accelerate further.
What would be your investment plan in a market like India?
The first thing will be to create an on-ground team in India for Hasbro. So, establishing our business entity, we have almost a 100 people now in India across all the key functions of supply chain, operations, marketing, sales, etc. Our No.1 priority now is to create a big organisation.
Investment number two will be to understand which of our brands we should bring to India. Deep consumer insights will play a key role. We need to become experts about the market and then invest for content of our brands in platforms like TV and Digital.
Do you have any plans to set up plants in India?
We are expanding our footprint in India from a manufacturing perspective. There’s immense opportunity here and also Hasbro has become the No.1 toy exporter from India. We have set up a lot of manufacturing facilities and they are not only manufacturing for India but also exporting the products as well. We have become the number one player in that segment.
You’ve said that e-commerce is a great platform for you to grow. How does it compare with actual retailing evaluation?
Our e-commerce business is about 25-30 per cent of our total business. We have a huge foothold in traditional brick and mortar, but it is the primary focus for the organization to drive e-comm and m-comm.
Hasbro has been creating content across platforms. What are the key properties and what are the plans for India?
Storytelling is very essential to our strategy at Hasbro. Our Chairman and CEO, Brian Goldner, profoundly believes that successful and sustainable brands must be anchored in rich and relevant story telling. We’ve invested a huge amount of money in our own studio. We have an arm of our business based in Hollywood in LA and we have built rich partnerships within Hollywood with organisations like Paramount for a 5-year deal. We have a content partnership with them. Content is absolutely everything to our brands. We have about 1,500 brands in our portfolio. In any given time we are focusing on about 8 of them for who we are really building meaningful content around. We have brands like GI Joe and Dungeons and Dragons for whom we build content in theatres, TV, digital, etc.
Another aspect of content that we focus on is consumer generated content. Eighty per cent of the content generated for Nerf, which is our co-franchise brand, is consumer generated content. Therefore, we are looking at ways to directly connect with the consumer.
Will you be tying up with any media or OTT platforms in India for this content?
We do have partnerships with broadcasters like Nickelodeon. We have additional partnerships that will be announced shortly and it is really important for us to have these partnerships. These partnerships will help us get out our content most effectively to the consumer.
There is a huge problem of piracy and counterfeit products. How are you tackling that in India?
We take piracy very seriously. We have a group of lawyers plus also an IP protection lawyer based in Hong Kong who does nothing but reach out and look for piracy and take action. The other thing we do is warn the market place we have entered and if we find the source, we cease and desist it. We have the responsibility of a lot of brands and hence, we have to proactive when it comes to abolishing piracy. It definitely impacts growth and revenues and hence, we absolutely take action.